25/04/2008 - 14:13

Merrill Lynch in "unauthorised" sale of $20m Equinox shares

25/04/2008 - 14:13

Bookmark

Upgrade your subscription to use this feature.

Equinox Minerals Ltd chief executive Craig Williams has become the third Perth company director to have a big parcel of shares sold by Merrill Lynch as a result of links to failed margin lender Lift Capital Partners.

Equinox Minerals Ltd chief executive Craig Williams has become the third Perth company director to have a big parcel of shares sold by Merrill Lynch as a result of links to failed margin lender Lift Capital Partners.

Equinox announced that Merrill Lynch has sold 4.1 million Equinox shares, worth $20.8 million at Friday's closing price of $5.00.

It is understood the shares were those used by Mr Williams to secure a Lift Capital margin loan.

Merrill Lynch, which was the main funder of Lift Capital, holds a further 1.1 million Equinox shares, which had also been used by Mr Williams to secure a margin loan.

Mr Williams advised that notice was given to the administrator of Lift Capital and Merrill Lynch that he did not authorise or consent to the sale of the relevant shares.

"It now appears that Merrill Lynch ignored such notice," Equinox said in a statement.

Paladin Energy chairman Rick Crabb has suffered a similar fate; Merrill Lynch has sold 6.4 million Paladin shares worth $29 million that Mr Crabb had used to secure a margin loan.

"The shares were disposed of without Mr Crabb's consent or authority and Mr Crabb is currently pursuing legal action to recover these shares," Paladin said in a statement this week.

Paladin company secretary and Deep Yellow director Gillian Swaby also has a big portion of her personal wealth caught up in the Lift collapse.

Merrill Lynch has already sold 2.1 million Deep Yellow shares that she had used to secure a margin loan.

 

An Equinox statement is pasted below:

 

Unauthorised sale of shares by Merrill Lynch

Equinox Minerals Limited has been informed by the administrators of Lift Capital Partners Pty Ltd that Merrill Lynch (or an entity or entities associated with Merrill Lynch) held 5,262,799 Equinox shares under a securities lending arrangement associated with Lift Capital.

The Company has been informed that Merrill Lynch disposed of about 4,155,199 of those shares such that Merrill Lynch now holds 1,107,608 Equinox shares in the name of Lift Capital. Mr Williams has informed the Company that it is assumed that all of these shares still held by Merrill Lynch are his shares.

As announced by the Company on 16 April 2008, Mr Williams mortgaged 5,239,799 Equinox shares to Lift Capital as security for certain lending facilities entered into between Lift Capital and entities associated with Mr Williams.

On 11 April 2008 Lift Capital appointed a voluntary administrator, and as a result the relevant shares owned by Mr Williams and his associated entities were advised to be under the effective control of Merrill Lynch, who we understand is a third party creditor to Lift Capital.

Mr Williams advised the Company that notice was given to the administrator of Lift Capital and Merrill Lynch that he did not authorise or consent to the sale of the relevant shares. It now appears that Merrill Lynch ignored such notice and has sold a substantial portion of the shares, without the consent or authority of Mr Williams.

Mr Williams has advised the Company that no margin call had been made under the facilities and that he had advised Lift Capital of his willingness and ability to repay the full amount owing under the facilities.

Mr Williams maintains that he has retained beneficial ownership of the relevant shares at all times, there was no
default under the Lift Capital facilities and that the sale of the shares by Merrill Lynch was unauthorized.

Mr Williams has advised the Company that he is pursuing actions to recover any remaining shares and will seek to
recover the shares disposed of without his consent or authority.

 

 

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

Subscription Options