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SCHEDULE 14A INFORMATION
Securities Exchange Act of 1934
(Amendment No. 5)
Filed by a Party other than the Registranto
þ | Preliminary Proxy Statement |
o | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
o | Definitive Proxy Statement |
o | Definitive Additional Materials |
o | Soliciting Material Pursuant to §240.14a-12 |
o | No fee required. | |
þ | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
1) | Title of each class of securities to which transaction applies: |
2) | Aggregate number of securities to which transaction applies: |
3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
4) | Proposed maximum aggregate value of transaction: $100,745,000 |
5) | Total fee paid: $ 3,092.88 |
þ | Fee paid previously with preliminary materials. | |
o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. |
1) | Amount Previously Paid: |
2) | Form, Schedule or Registration Statement No.: |
3) | Filing Party: |
4) | Date Filed: |
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260 South Los Robles, Suite 217
Pasadena, California 91101
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260 South Los Robles, Suite 217
Pasadena, California 91101
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 29, 2007
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Pasadena, California 91101
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• | Pursuant to an acquisition agreement, General Finance Corporation (referred to below as “we” or “our”) will acquire RWA Holdings Pty Limited and its subsidiaries (collectively referred to as “Royal Wolf”). For more information about the acquisition, see the section entitled “The Acquisition Agreement” beginning on page 55 and the acquisition agreement, itself (referred to in Australia as a share sale deed), that is attached as ANNEX A to this proxy statement. |
• | At the special meeting of stockholders to be held on May 29, 2007, you will be asked to approve the acquisition. For more information about the special meeting, see the section entitled “The Special Meeting” beginning on page 30. |
• | We are a special-purpose acquisition company organized under the laws of Delaware on October 14, 2005. We were formed to effect an acquisition, capital stock exchange, asset acquisition or other similar business combination with an operating business. For more information about us, see the section entitled “Other Information About Us” beginning on page 72. |
• | Royal Wolf is an Australian company that leases and sells portable storage containers, portable container buildings and freight containers in Australia. Based upon its own internal analysis, Royal Wolf’s management believes Royal Wolf is the market leader in Australia for container-based storage and accommodation products. For more information about Royal Wolf, see the sections entitled “Unaudited Pro Forma Condensed Combined Financial Statements,” “Information About Royal Wolf,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Royal Wolf” beginning on pages 65, 77, and 89, respectively. Also see Royal Wolf’s financial statements beginning onpage F-2. |
• | At the closing of the acquisition, we will purchase all of the outstanding shares of Royal Wolf from its shareholders. We will acquire the RWA shares through GFN Australasia Finance Pty Limited, or GFN Australasia, an indirect wholly owned Australian subsidiary formed by us for this purpose. The purchase price for the RWA shares will be $58.4 million, plus $876,500 per month from March 29, 2007 until the closing. The purchase price includes deposits of $1,005,000 previously paid by us in connection with the acquisition. If the acquisition is not completed for any reason, we will forfeit the deposits. We will pay the purchase price of the RWA shares, less the deposits, by a combination of cash and issuance of shares of capital stock of GFN Australasia constituting 13.8% of the outstanding capital stock of GFN Australasia immediately following the acquisition. Assuming the closing occurs on May 31, 2007, the aggregate acquisition consideration will be approximately $101.2 million, including a total of $2.4 million in cash payable by us in two equal installments on the first and second anniversaries of the closing in exchange for a non-compete covenant. The aggregate consideration for Royal Wolf also includes the indebtedness under Royal Wolf’s existing credit facilities with New Zealand Banking Group, which we refer to in this proxy statement as ANZ. There was $37.9 million, including accrued interest, of indebtedness outstanding under these facilities of February 28, 2007. The actual amount outstanding as of the closing will be different, but will in no event exceed $39.4 million of principal. For more information about the acquisition consideration, see the section entitled “The Acquisition Agreement — Acquisition Consideration; Payment of Consideration” beginning on page 57. |
• | Under the acquisition agreement, $5.5 million of the cash consideration payable to the sellers will be deposited in a separate bank account requiring signatures of us and the sellers for withdrawals. The purpose of this account is to provide a source of funds to pay the sellers’ indemnification obligations. The acquisition agreement provides that 25% of these funds will be released to the sellers on September 1, 2007 and the balance will be released to the sellers on March 31, 2008. For more information about these escrow provisions, see the section entitled “The Acquisition Agreement — Indemnification and Escrow Provisions” beginning on page 61. |
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• | After we complete the acquisition of Royal Wolf, our management and board of directors will continue as before the acquisition. Royal Wolf also will continue to be managed largely by its existing officers. For more information about management, see the section entitled “Directors and Management Following the Acquisition” on page 104. |
• | Our management considered various factors in determining to acquire Royal Wolf and to sign the acquisition agreement. For more information about our management’s decision-making process, see the section entitled “Consideration of the Acquisition” beginning on page 35. |
• | Our acquisition of Royal Wolf involves numerous risks. For more information about these risks, see the section entitled “Risk Factors” beginning on page 20. |
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AND THE SPECIAL MEETING
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Q. | Why am I receiving this proxy statement? | |
A. | We have agreed to acquire RWA in a “business combination” within the meaning of our certificate of incorporation. Under our certificate of incorporation, the acquisition must be approved by our stockholders, which is the purpose of the special meeting. This proxy statement contains important information about the acquisition and the special meeting of our stockholders. | |
Q. | What vote is required in order to approve the acquisition? | |
A. | Under our certificate of incorporation, we can complete the acquisition only if it is approved by the affirmative vote of the holders of a majority of the shares of our common stock present and entitled to vote with respect to the acquisition, as well as the holders of a majority of the shares of our common stock that were originally issued in our initial public offering, or IPO, that are voted with respect to the acquisition. Notwithstanding these approvals, our certificate of incorporation provides that we cannot complete the acquisition if the holders of 20% or more of our IPO shares (1,725,000 or more shares) vote against it and demand that their shares be converted into a pro rata portion of the net proceeds of our IPO presently held in the trust account established for this purpose at the time of our IPO. These rights of holders of our IPO shares to vote against the acquisition and demand conversion of their shares are referred to in this proxy statement as “conversion rights” and described elsewhere in this proxy statement. If the acquisition is completed, the foregoing provisions of our certificate of incorporation will no longer apply. | |
Q. | Are we being asked to consider any other matter? | |
A. | Yes. We are asking our stockholders to grant our board of directors discretionary authority to adjourn the special meeting to solicit additional votes for approval of the acquisition in the event that there are insufficient votes for its approval present at the special meeting. | |
Q. | What will happen in the proposed acquisition? |
A. | GFN Australasia will acquire all of the capital stock of RWA, and we will own indirectly through GFN Australia 86.2% of Royal Wolf and carry on Royal Wolf’s business and operations following the acquisition. |
Q. | What is the consideration for the Royal Wolf acquisition? |
A. | We will acquire the RWA shares through GFN Australasia Finance Pty Limited, or GFN Australasia, an indirect wholly owned Australian subsidiary formed by us for this purpose. The purchase price for the RWA shares will be $58.4 million, plus $876,500 per month from March 29, 2007 until the closing. The purchase price includes deposits of $1,005,000 previously paid by us in connection with the acquisition. If the acquisition is not completed for any reason, we will forfeit the deposits. We will pay the purchase price of the RWA shares, less the deposits, by a combination of cash and issuance of shares of capital stock of GFN Australasia constituting 13.8% of the outstanding capital stock of GFN Australasia immediately following the acquisition. Assuming the closing occurs on May 31, 2007, the aggregate acquisition consideration will be approximately $101.2 million, including a total of $2.4 million in cash payable by us in two equal installments on the first and second anniversaries of the closing in exchange for a non-compete covenant. The aggregate consideration for Royal Wolf also includes the indebtedness under Royal Wolf’s existing credit facilities with New Zealand Banking Group, which we refer to in this proxy statement as ANZ. There was $37.9 million, including accrued interest, of indebtedness outstanding under the ANZ facilities of February 28, 2007. The actual amount outstanding as of the closing will be different, but will in no event exceed $39.4 million of principal. |
Q. | Will financing be used to acquire Royal Wolf? |
A. | Yes. We will finance a portion of the purchase price of the RWA shares payable by us at the closing by GFN Australasia’s sale and issuance to Bison Capital or its affiliates of $15.76 million principal amount of senior subordinated promissory notes. As described above, we also will acquire Royal Wolf subject to the indebtedness under Royal Wolf’s existing credit facilities with ANZ. The material terms of the GFN Australasia senior subordinated promissory notes and of Royal Wolf’s indebtedness under the ANZ existing credit |
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facilities are described under the caption “The Acquisition Agreement — Acquisition Consideration; Payment of Consideration” beginning on page 56 of this proxy statement. |
Q. | Is the consideration subject to change? |
A. | Yes. The purchase price of the RWA shares will increase by $876,500 per month from March 29, 2007 until the closing. |
In addition, some of the financial terms and provisions of the acquisition agreement are denominated in Australian dollars, which, for convenience, have been converted throughout the text of this proxy statement into U.S. dollars based upon the currency exchange rate in effect on March 1, 2007 of 0.788 U.S. dollar for one Australian dollar. The currency exchange rate in effect as of the closing of the acquisition may differ. |
Q. | Why are you proposing the acquisition? | |
A. | We were organized to effect an acquisition, capital stock exchange, asset acquisition or other similar business combination with an operating business. Although we were not limited to a particular industry, we stated our intention to focus our efforts on the specialty finance industry and in areas where our management has significant expertise. Our management has been focused primarily on accomplishing the Royal Wolf acquisition since, until we complete our initial business combination, we can engage in no business or operations. We have not yet developed a business strategy beyond continuing to implement Royal Wolf’s own business plan and considering how Royal Wolf may serve as our platform company for possible future growth. Royal Wolf is a leading specialty finance company in Australia that we believe has a strong and deep management team and is well-positioned for significant growth domestically in Australia. We also believe Royal Wolf can serve as a both a rental services platform for expansion throughout the Asia-Pacific region and potentially the core management team for the global container leasing segment of our business. The acquisition of RWA will provide us and our stockholders the opportunity to own and operate Royal Wolf and expand upon its existing business and operations. | |
Q. | Are there risks involved in the acquisition? | |
A. | Yes. There are risks related to the acquisition, including the following: | |
• Our working capital will be reduced to the extent our stockholders exercise their conversion rights, which would reduce our cash reserves after the acquisition. | ||
• Our current directors and executive officers own shares of common stock and have interests in the acquisition that are different from yours, and if the acquisition is not approved, the shares of common stock acquired by them prior to our IPO may become worthless. |
• We will issue $15.76 million principal amount of senior subordinated promissory notes of GFN Australasia at the closing of the acquisition and will acquire Royal Wolf subject to the indebtedness under Royal Wolf’s existing credit facilities with ANZ. There was $37.9 million, including accrued interest, outstanding under the ANZ facilities as of February 28, 2007. The actual amount outstanding as of the closing will be different, but will in no event exceed $39.4 million of principal. Any adverse change in the results of operations of Royal Wolf may make it difficult for us to repay or refinance this indebtedness. |
• The aggregate consideration for the acquisition will increase if the value of the U.S. dollar compared to the Australian dollar decreases before the closing due to currency exchange rate fluctuations. | ||
• If we do not complete our acquisition, we may not be successful in identifying another suitable business combination, in which case we may be forced to liquidate. In a liquidation, our stockholders will receive less than $8.00 per share for their shares of our common stock and their warrants to purchase our common stock will become worthless. | ||
• The market price of our common stock will depend upon the operations of Royal Wolf and may, as a result, be highly volatile and subject to wide fluctuations. | ||
• Our failure to complete the acquisition could negatively impact the market price of our common stock and may make it more difficult for us to attract another acquisition candidate. |
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• The proposed acquisition of Royal Wolf may result in additional Sarbanes-Oxley Act of 2002 costs, issues and control procedures of our combined reporting company. | ||
• We may have difficulty establishing adequate management, legal and financial controls over Royal Wolf. | ||
• With some exceptions, we have not yet established the compensation that will be payable to our directors and executive officers following the acquisition, and our stockholders will not have this information in deciding how to vote their shares with respect to the acquisition. | ||
Following the acquisition, we will be subject to all of the risks related to ownership of Royal Wolf’s business and operations, including the following: | ||
• General or localized economic downturns or weakness may adversely affect Royal Wolf’s customers, which may cause the demand for Royal Wolf’s products and services to decline and therefore harm our future revenues and results of operations. | ||
• Royal Wolf faces significant competition. If Royal Wolf is unable to compete successfully, it could lose customers and our future revenues and results of operations could be adversely affected. | ||
• Royal Wolf has depended to a large extent on the sales of its containers, which sales may fluctuate significantly in the future. | ||
• Royal Wolf’s leasing revenues, which constitute approximately one-quarter of its total revenues, depend upon Royal Wolf’s ability to re-lease containers. The failure of Royal Wolf to effectively and quickly re-lease containers could materially and adversely affect our future results of operations. | ||
• Governmental regulations could impose substantial costs or restrictions on Royal Wolf’s operations that could harm our future results of operations. | ||
• We may not be able to effectively implement our growth strategy for Royal Wolf by identifying or completing transactions with attractive acquisition candidates, which could impair our growth. | ||
• Our failure to retain key Royal Wolf personnel could adversely affect our operations and could impede our ability to execute our business plan and growth strategy. | ||
• Any failure of Royal Wolf’s management information systems could disrupt our business and result in decreased rental or sale revenues and increased overhead costs. | ||
• Significant increases in Royal Wolf’s raw material costs could increase our operating costs and adversely affect our results of operations. | ||
• The failure of Royal Wolf’s Chinese manufacturers to sell and deliver products to Royal Wolf in timely fashion may harm our reputation and our financial condition. | ||
• Royal Wolf’s growth plan includes a possible expansion into markets outside of Australia, including in the Asia-Pacific, which may not prove successful. | ||
• Royal Wolf’s planned growth may strain our management resources, which could disrupt the development of new products and new applications of Royal Wolf’s existing products and Royal Wolf’s customer service centers and other facilities. | ||
• We may need additional debt or equity financing to sustain Royal Wolf’s growth, but have no commitments or arrangements to obtain such financing. | ||
Q. | Does the board of directors of General Finance Corporation recommend voting for the acquisition? |
A. | Yes. After careful consideration of the business and operations of Royal Wolf and the terms and provisions of the acquisition agreement, our board of directors has unanimously approved the acquisition of Royal Wolf and determined that it is in the best interests of us and our stockholders. Our board of directors also believes that the acquisition is fair to us and our stockholders. No fairness opinion was sought or obtained by our board of directors in making its determinations. Our board of directors unanimously recommends that our stockholders vote “FOR” approval of the acquisition. |
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Q. | Has General Finance Corporation received a valuation or fairness opinion with respect to the acquisition? |
A. | No. Our board of directors has determined that the fair market value of Royal Wolf exceeds 80% of our net assets. As set forth in the prospectus relating to our IPO, we are not required to obtain an opinion from an investment banking firm as to the fair market value if our board determines that the Royal Wolf acquisition meets the 80% threshold. The terms of the acquisition were determined based upon arm’s-length negotiations between us and the sellers, and our officers and directors, including Ronald A. Valenta, our Chief Executive Officer and a director, and John O. Johnson, our Chief Operating Officer, have extensive industry and deal-making experience in the portable storage industry. Under the circumstances, our board of directors believed that obtaining a valuation or fairness opinion was unnecessary. |
Q. | Do the directors and officers of General Finance Corporation have interests in the acquisition that are different from mine? |
A. | Yes. If the acquisition is not completed and we fail by October 5, 2007 to enter into an agreement in principle or a definitive agreement with respect to another business combination, or having done so we fail to complete the business combination by April 5, 2008, we will be required to liquidate as soon as reasonably practicable. In that event, the shares of our common stock acquired by our officers and directors prior to our IPO for an aggregate purchase price of $250,000 will become worthless, because our officers and directors have waived their rights to receive any liquidation distribution with respect to these shares. As of March 23, 2007, the aggregate market value of the shares of our common stock owned by our officers and directors was $14,306,250. |
Ronald F. Valenta, our Chief Executive Officer and a director, and John O. Johnson, our Chief Operating Officer, hold warrants to purchase an aggregate of 1,477,833 shares of our common stock that they acquired for an aggregate purchase price of $1,400,000, which also will become worthless upon our liquidation. As of March 23, 2007, the aggregate market value of these warrants was $1,921,183. |
Mr. Valenta has made available to us a line of credit under which we may borrow from him from time to time up to $3,000,000 at an annual interest rate equal to 8%. Our borrowings under the line of credit have been and will continue to be used by us to pay operating expenses, including deposits of $1,005,000 and expenses relating to the acquisition. At February 28, 2007, the outstanding amount of principal and accrued interest under the line of credit was $1,317,050. We will continue to borrow funds under the line of credit to pay expenses through the closing of the acquisition. If the acquisition is completed, Mr. Valenta will be repaid all outstanding principal and accrued interest under the line of credit. If, on the other hand, the acquisition is not completed and we are required to liquidate as described above, Mr. Valenta will have no recourse against the funds held in the trust account for repayment of any amounts outstanding under the line of credit. |
All of our current officers and directors will continue to serve as such following the acquisition. In addition, Robert Allan, the Chief Executive Officer of Royal Wolf, will be deemed to be one of our executive officers following the acquisition. At present, we do not compensate our officers or directors other than Charles E. Barrantes, our Executive Vice President and Chief Financial Officer, whose employment commenced on September 11, 2006. We will have employment agreements with only Messrs. Barrantes and Allan. Mr. Barrantes receives a base annual salary of $200,000 and is eligible to receive an annual bonus each fiscal year of up to 35% of his base salary, provided that he is employed on the last day of such year. Mr. Allan receives a base annual salary of $236,400 and is eligible to receive an annual performance bonus not to exceed $78,800 based upon the achievement of specified performance indicators. Ronald F. Valenta, our Chief Executive Officer and Secretary, John O. Johnson, our Chief Operating Officer, and Marc Perez, our Controller, are not currently compensated for their services; and both Mr. Valenta and Mr. Johnson have advised our board of directors that they will continue to serve in these capacities without compensation until at least the earliest of June 30, 2008 or such time as Royal Wolf achieves annualized EBITDA of $20 million or we achieve a company-wide total annualized EBITDA of $40 million. If the acquisition is completed, we may compensate our officers and adopt a plan of compensation for directors based upon the advice and recommendations of the Compensation Committee of our board of directors. Except as described above, there are no present commitments or understandings, regarding our future compensation of officers or directors, so our stockholders will not have this information deciding how to vote their shares with respect to the acquisition. |
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As an inducement to Bison-GE and the management shareholders to enter into the acquisition agreement, Mr. Valenta has entered into a backup purchase agreement with Bison-GE and the management shareholders under which he agrees that, if the acquisition agreement is terminated for any reason, he will purchase from Bison-GE and the management shareholders all of the RWA shares at a purchase price equivalent to the purchase price payable by us under the acquisition agreement. The terms of the backup purchase agreement were determined by arm’s-length negotiations among Mr. Valenta, Bison-GE and the management shareholders. Mr. Valenta will not be entitled to a fee or other compensation for the agreeing to the backup purchase agreement. |
Q. | What is the legal structure of the acquisition? |
A. | The acquisition will be accomplished by GFN Australasia’s purchase of all of the capital stock of RWA under the acquisition agreement. In connection with the acquisition, we will issue to Bison-GE 13.8% of the capital stock of GFN Australasia. As a result, RWA will become a direct, wholly owned subsidiary of GFN Australasia, and RWA and its subsidiaries will become our indirect 86.2% owned subsidiaries. |
A copy of the acquisition agreement, which is referred to in Australia as a share sale deed, is attached to this proxy statement as ANNEX A. We encourage you to read the acquisition agreement in its entirety, because it, and not this proxy statement, is the legal contract that governs the acquisition. |
Q. | Does the acquisition require any change in the certificate of incorporation of General Finance Corporation? | |
A. | No. Our certificate of incorporation need not be amended and will remain in effect, without change, following the acquisition. If the acquisition is completed, however, the provisions of our certificate of incorporation relating to our initial business combination and related matters such as conversion rights will no longer apply. | |
Q. | Are there contractual conditions to completion of the acquisition? | |
A. | Yes. The respective obligations of us and sellers to complete the acquisition are subject to the satisfaction or waiver of a number of conditions. These include, among others, the following: |
• The approval of the acquisition by our stockholders; |
• No occurrence of events that would have a material adverse effect on Royal Wolf’s EBITDA over any12-month period; |
• ANZ and Bison Capital entering into a subordination agreement with respect to the senior subordinated promissory notes of GFN Australasia to be issued to Bison Capital at the closing of the acquisition; and |
• ANZ consenting to the transactions contemplated under the acquisition agreement to the extent required in order to maintain Royal Wolf’s existing ANZ credit facilities in place following the acquisition, or the existence of another credit facility acceptable to Bison-GE. |
Q. | Can the acquisition agreement be terminated? | |
A. | Yes. The acquisition agreement can be terminated prior to completion of the acquisition in some circumstances, including the following: |
• By us orBison-GE if the acquisition is not approved by our stockholders at the special meeting, or otherwise by September 1, 2007; and |
• By any party after March 29, 2008 if any of the other conditions to the closing of the acquisition has not been satisfied and the terminating party has used reasonable efforts to satisfy the conditions. |
Q. | Will any finder’s fee be paid in connection with the acquisition? |
A. | No. |
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Q. | Could payment of termination fees be required? |
A. | No. There is no termination or breakup fee payable in connection with the termination of the acquisition agreement; however, we have paid deposits of $1,005,000 in connection with the acquisition. If the closing does not occur for any reason, we will forfeit the deposits. |
Q. | Is the acquisition subject to any regulatory requirements? |
A. | Yes. It is subject to review by the Treasurer of the Commonwealth of Australia. The acquisition is not subject to any regulatory approvals in the U.S. |
Q. | How do the General Finance Corporation insiders intend to vote their shares? | |
A. | Our officers and directors hold shares of our common stock acquired prior to our IPO that represent approximately 17.9% of our outstanding shares. They have agreed to vote these shares with respect to the acquisition as the holders of a majority of our IPO shares that are voted at the special meeting. Our officers and directors own no IPO shares. | |
Q. | How will the acquisition affect my securities of General Finance Corporation? |
A. | Following the acquisition, you will continue to hold the shares of our common stock that you owned prior to the acquisition, except to the extent that you exercise your conversion rights. The number of shares of our common stock outstanding immediately after the acquisition will be less, depending upon the extent to which our stockholders exercise their conversion rights. |
If the acquisition is completed, our outstanding warrants to purchase common stock will become exercisable upon the closing of the acquisition. Otherwise, the acquisition will have no affect on any of our warrants that you may own. |
Q. | If I object to the proposed acquisition, do I have appraisal rights? | |
A. | No. You have no appraisal rights in connection with the acquisition under applicable Delaware corporation law or otherwise. | |
Q. | What will happen to the funds held in the trust account after the acquisition? |
A. | If the acquisition is completed, a portion of the funds held in the trust account established at the time of our IPO will be used to pay the cash portion of the purchase price of the RWA shares and costs of the acquisition. Assuming the closing occurs on May 31, 2007, the cash payable at the closing will be approximately $43.0 million. The actual cash payable at the closing will be different to the extent the closing occurs before or after May 31, 2007. We also will use the funds held in the trust account to repay the outstanding principal balance, which we estimate will be $3,000,000 (including our deposits of $1,005,000 in connection with the acquisition), plus accrued interest, under our line of credit with Mr. Valenta. Based upon the amount of funds held in the trust account as of February 28, 2007, this would leave available in the trust account after the acquisition a maximum of approximately $22.0 million, assuming no exercise of conversion rights, and a minimum of approximately $8.8 million, assuming the maximum conversion rights are exercised. Following the acquisition, the trust account will be closed and our stockholders who properly exercise their conversion rights will receive their pro rata portion of the funds held in the trust account; including a pro rata share of the contingent underwriting discount and a pro rata share of any interest earned, net of taxes. Any remaining funds in the trust account, less payment of the contingent underwriting discount payable to the underwriters of our initial IPO, will be released to us. We intend to use a portion of the remaining funds to repay Mr. Valenta for all amounts owing to him under our line of credit and for working capital and general corporate purposes. Following the acquisition, there will be no further restrictions on our use of these funds. |
Q. | Who will manage General Finance Corporation and Royal Wolf after the acquisition? | |
A. | After the acquisition, all of our current directors and officers will continue to serve in the capacities described under “Directors and Management Following the Acquisition.” | |
Royal Wolf also will continue to be managed largely by its existing officers, including Robert Allan, its Chief Executive Officer, Peter McCann, its Chief Financial Officer, and James Warren, its Chief Operating Officer. Each of Messrs. Allan, McCann and Warren is party to an employment agreement which is terminable upon |
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advance notice by either party. In connection with the acquisition, Ronald F. Valenta and John O. Johnson will be appointed as directors of RWA, and Michael Baxter, a founder and Executive Director of RWA, will become a consultant to Royal Wolf under a consulting agreement under which he will agree to provide consulting services relating to the transition of ownership of Royal Wolf until March 31, 2008. A copy of Mr. Baxter’s consulting agreement is included as part of ANNEX A to this proxy statement. |
Q. | Will our business plan change as a result of the acquisition of Royal Wolf? |
A. | No. Our business plan and strategy disclosed in our IPO prospectus is to seek to identify, acquire and consolidate under our holding company specialty finance businesses in the U.S., Europe and Asia. Ronald F. Valenta, our Chief Executive Officer, has successfully executed a similar strategy as the Chief Executive Officer and later the Chairman of the Board of Mobile Storage Group. Royal Wolf is a leading specialty finance company in Australia that we believe has a strong and deep management team and is well-positioned for significant growth domestically in Australia. We also believe Royal Wolf can serve as a both a rental services platform for expansion throughout the Asia-Pacific region and potentially the core management team for the global container leasing segment of our business. If we complete the Royal Wolf acquisition, our present strategy is to seek to acquire other equipment leasing companies in North America, Asia and Europe and to consider acquisitions of other companies in the special finance business. We also will continue Royal Wolf’s strategy of consolidating small equipment leasing companies in the region. Before we entered into the acquisition agreement, we entered into confidentiality agreements and conducted preliminary due diligence with respect to a number of other possible initial business combinations. We and Royal Wolf also previously entered into a confidentiality agreement and conducted preliminary due diligence with respect to one smaller Australian equipment leasing company that Royal Wolf considered to be a suitable acquisition for it. We are not in current discussions or negotiations, or currently conducting due diligence, regarding any of the entities with which we signed confidentiality agreements prior to entering into the Royal Wolf acquisition agreement, and neither we nor Royal Wolf has any present understandings, arrangements or commitments with respect to any possible future acquisition. There is no assurance that we or Royal Wolf will be able to identify, negotiate or complete any future acquisitions, or, if completed that any such acquisitions will be successful. |
Q. | What happens if the acquisition is not completed? |
A. | If the acquisition is not completed, we will forfeit deposits of $1,005,000 and bear substantial costs incurred in connection with the acquisition and immediately resume our search for another business combination to present to our stockholders for their approval. If we fail by October 5, 2007 to enter into an agreement in principle or a definitive agreement with respect to another business combination, or having done so we fail to complete the business combination by April 5, 2008, we will liquidate as soon as practicable. In any liquidation, the funds held in the trust account will be distributed pro rata to the holders of our IPO shares only. Our officers and directors have waived any right to any liquidation distribution with respect to shares of our common stock acquired by them prior to our IPO. In a liquidation, holders of our outstanding warrants would not receive any value for their warrants. |
We cannot liquidate the trust account unless and until our stockholders approve our plan of dissolution and liquidation in accordance with the procedures described in this proxy statement. Accordingly, there will be a delay (which may be substantial) beyond October 5, 2007 or April 5, 2008, as the case may be, in our liquidation and the distribution to our public stockholders of the funds in our trust account as part of any plan of dissolution and liquidation. | ||
Q. | When do you expect the acquisition to be completed? |
A. | We presently expect the acquisition to close on May 31, 2007, assuming the acquisition is approved at the special meeting on May 29, 2007. |
Q. | What do I need to do now? |
A. | We urge you to read carefully and consider all of the information contained in this proxy statement, including ANNEXES A, B and C, to fully understand how the acquisition will affect you as a stockholder of General Finance Corporation. You should then vote as soon as possible in accordance with the instructions provided in this proxy statement and on the enclosed proxy card. |
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Q. | How do I vote? | |
A. | If you are a holder of record of our common stock, you may vote in person at the special meeting or by submitting a proxy for the special meeting. You may submit your proxy by completing, signing, dating and returning the enclosed proxy card in the accompanying pre-addressed postage paid envelope. If you hold your shares in “street name,” which means your shares are held of record by a broker, bank or other nominee, you must provide the record holder of your shares with instructions on how to vote them. | |
Q. | Is there a deadline for submitting my proxy? | |
Yes. Proxies must be received prior to the voting at the special meeting. Any proxies or other votes received after this time will not be counted in determining whether the acquisition has been approved. Furthermore, any proxies or other demand received after the voting at the special meeting will not be effective to exercise your conversion rights. | ||
Q. | If my shares are held in “street name,” will my broker, bank or nominee automatically vote my shares for me? | |
A. | No. Your broker, bank or nominee cannot vote your shares unless you provide voting instructions in accordance with the information and procedures provided to you by your broker, bank or nominee. | |
Q. | What will happen if I abstain from voting or fail to vote? | |
A. | Under our certificate of incorporation, we are allowed to complete the Royal Wolf acquisition only if it is approved by the affirmative vote of the holders of a majority of the shares of our common stock that were issued in the IPO and that are voted on the proposal. Therefore, your abstention or failure to vote will not be counted toward the vote total on the acquisition proposal. Furthermore, your abstention or failure to vote will not be sufficient to exercise your conversion rights. | |
Q. | Can I change my vote or revoke my proxy after I have mailed my signed proxy form. | |
A. | Yes. To change your vote, you may send a later-dated, signed proxy card to our address set forth in this proxy statement so that it is received prior to the voting at the special meeting or, if you are a record holder, attend the special meeting in person and vote. You also may revoke your proxy by sending a notice of revocation to us prior to the voting at the special meeting. | |
Q. | What should I do if I receive more than one set of proxy materials? | |
A. | You may receive more than one set of proxy materials, including multiple copies of this proxy statement and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to vote all of your shares. | |
Q. | Who can help answer my questions? | |
A. | If you have questions about the acquisition, or if you need additional copies of this proxy statement or the enclosed proxy card, you should contact: |
John O. Johnson | OR | MacKenzie Partners, Inc. | ||||
Chief Operating Officer | 105 Madison Avenue | |||||
General Finance Corporation | New York, New York 10016 | |||||
260 South Robles, Suite 217 | Telephone: (800) 322-2885 | |||||
Pasadena, California 91101 | ||||||
Telephone:(626) 584-9722 |
You may also obtain additional information about us from documents filed with the Securities and Exchange Commission by following the instructions in the section entitled “Where You Can Find More Information.” |
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Q. | What are my conversion rights? | |
A. | If you hold IPO shares, you have the right to vote against the acquisition and demand that, if the acquisition is completed, your IPO shares be converted into a pro rata portion of the funds held in the trust account established at the time of our IPO. |
Q. | Can I Vote Against the Acquisition Without Electing to Convert My Shares? |
A. | Yes. You need not elect to convert your shares, even if you vote against the acquisition. |
Q. | How do I exercise my conversion rights? | |
A. | If you wish to exercise your conversion rights, you must: | |
• Affirmatively vote against approval of the acquisition; and |
• No later than 12:00, noon, New York City time, on May 29, 2007 (the time of the special meeting of stockholders): |
• present to Continental Stock Transfer Trust Company, 17 Battery Place, New York, New York 10004, Attention: Mark Zimkind, Tel. 212-845-3287, Fax 212-616-7616, your physical stock certificate (together with necessary stock powers), or request for certification of your “street name” shares as described below; and |
• provide to Continental Stock Transfer & Trust Company a written certificate addressed to us to the effect that you wish to convert your shares into your pro rata share of the trust account, that you have held the shares that you seek to convert since the record date and that you will continue to hold the shares through the closing date of the acquisition. |
Any action that does not include an affirmative vote against approval of the acquisition will be insufficient to exercise your conversion rights. |
Q. | What conversion procedures are required if my shares are held in “street name”? |
A. | If you hold your shares in “street name,” you must follow procedures that are designed to enable us to effectively match your vote against approval of the acquisition with any election to convert your shares. |
In order to convert your “street name” shares you need only to instruct the account executive at your bank or broker to withdraw the shares from your account and request that a physical stock certificate be issued in your name, which we refer to as “certification” of your shares. You should consult your account executive about any costs associated with this certification process. As described below, Continental Stock Transfer & Trust Company can greatly assist with this process and reduce the movement of physical certificates. |
We urge stockholders whose shares are held in “street name” and who you may wish to convert their shares to promptly contact the account executive at their bank or broker to accomplish these conversion procedures. If such stockholders fail to act promptly, they may be unable to timely satisfy the conversion requirements. |
Q. | Why are these procedures being required? |
A. | All of our IPO shares, representing approximately 82% of our outstanding common stock, are held in “street name.” We are asking stockholders who wish to exercise their conversion rights to have their shares certificated in order to enable us to match the stockholders who vote against the acquisition proposal with those electing also to have their shares converted, since stockholders are entitled to vote against the acquisition proposal without electing to convert their shares. We are informed by our transfer agent that other special purpose acquisition companies that did not require the tender of share certificates until after the closing of their initial business combinations experienced problems in reconciling the voting of shares with the exercise of |
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conversion rights by their stockholders. According to our transfer agent, in some cases there were many more votes cast against the proposal than there were conversion elections. Because share certificates were not submitted with the written conversion elections, including where they were held in “street name,” there was no means of confirming which of the stockholders who voted against the business combination transaction also had properly exercised their conversion rights. The problem was compounded by the fact that some stockholders who purported to exercise their conversion rights transferred their shares prior to or after the vote with respect to the transaction. Our conversion procedures require that stockholders who wish to exercise their conversion rights must tender their share certificates or obtain the “certification” of their “street name” shares by the time of the special meeting and hold their shares through the closing of the acquisition. We are aware that other issuers, including Federal Services Acquisition Corp., Fortress American Acquisition Corp., and Acquiror Technology, Inc., have successively employed substantially the same or similar certification procedures to avoid problems experienced by other special purpose acquisition companies in implementing the conversion of shares by their stockholders. |
Q. | How much time will I have to determine whether to exercise my conversion rights? |
A. | There will be at least 20 days between the first date this proxy statement is being mailed and the deadline of May 29, 2007 to exercise your conversion rights. Our transfer agent will endeavor to process requests for certification of shares and conversion elections on a same-day basis, but there is no guarantee that it will be able to do so. In order to ensure the timeliness of the exercise of your conversion rights, however, we recommend that you contact the account executive at your bank or broker promptly following receipt of this proxy statement. |
Q. | Why were these conversion procedures established? |
A. | As referred to above, the requirement to have shares certificated before the special meeting of stockholders is intended to improve the conversion election process. Without this, or some other means, we may be unable to identify the stockholders who are legitimately entitled to the conversion amount. It also is possible that, without these procedures, we may not be able to determine whether or not the Royal Wolf acquisition has been approved at the special meeting. We note that, as reported on the front page ofThe Wall Street Journal on January 26, 2007, many issuers also have experienced problems associated with voting of borrowed shares. Although avoiding these problems was not the principal reason for requiring these conversion procedures, the procedures also may serve to alleviate these sorts of potential problems. |
Q. | Is there a charge for following the conversion procedures? |
A. | Maybe. Our transfer agent charges a customary fee of approximately $35 to brokers and other custodians for reissuing “street name” shares in the name of the stockholder. The fee is a flat fee based upon each request for certification and is not based upon the number of “street name” shares involved. You should consult your broker or other custodian as to whether or not this charge will be passed on to you if you choose to exercise your conversion rights. |
Q. | What is the deadline for presenting my stock certificate or obtaining certification of my “street name” shares? |
A. | Shares that have not been presented or certificated by 12:00, noon, New York City time, on May 29, 2007 will not be converted into cash. In the event you tender your shares and later decide that you do not want to convert the shares, you may make arrangements with Continental Stock Transfer & Trust Company, at the telephone number stated above, to withdraw the tender. In order to be effective, withdrawals of previously tendered shares also must be completed by 12:00, noon, New York City time, on May 29, 2007. |
Stockholders who wish to convert their shares may contact Mark Zimkind of Continental Stock Transfer & Trust Company at (212) 845-3287, for assistance in making the necessary arrangements. Stockholders are urged to contact Mr. Zimkind as early as possible and in any event by not later than 12:00, noon, New York City time, on May 29, 2007. |
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Stockholders who have questions concerning the proposed acquisition or any other aspect of the special meeting should contact John O. Johnson at (626) 584-9722 or MacKenzie Partners, Inc. at (800) 322-2885. | ||
Q. | How can I remedy an improper exercise of my conversion rights? | |
A. | If you: | |
• Return your proxy with directions to vote for approval of the acquisition, but then wish to vote against it and demand conversion of your shares; or | ||
• Return your proxy with directions to vote against approval of the acquisition and wish to demand conversion of your shares, but do not check the appropriate box on the proxy card demanding conversion or send a written request to us to demand conversion; or | ||
• Return your proxy with directions to vote against approval of the acquisition, but later wish to vote for it; |
you may request that we send you another proxy card on which you may indicate your intended vote and, if that vote is against approval of the acquisition, demand conversion of your shares by following the conversion procedures described above and on page 32 of this proxy statement. You may request another proxy card by contacting us at the phone number or address listed in this proxy statement.Any corrected or changed proxy card or written demand to convert your shares must be submitted to us so that it is received our transfer agent prior to 12:00, noon, New York City time on May 29, 2007. |
Q. | What is the estimated conversion amount? |
A. | If you comply with the foregoing procedures and, notwithstanding your affirmative vote against the acquisition, it is completed, you will be entitled to receive a pro rata portion of the funds held in the trust account established at the time of our IPO, including any earned interest, calculated as of the date two business days prior to the closing of the acquisition. As of February 28, 2007, there was approximately $67.4 million in the trust account after deduction of the taxes on earned interest, or approximately $7.82 for each IPO share. If you exercise your conversion rights and acquisition of Royal Wolf is completed, then you will be irrevocably electing to exchange your shares of our common stock for the right to receive cash of not less than approximately $7.82 per IPO share and will no longer own these shares. |
Q. | How does the estimated conversion amount compare to the recent market price of common stock? |
A. | On March 23, 2007, the closing sale price of our common stock was $7.63 as reported on the American Stock Exchange. Our stockholders should verify the market price of our common stock prior to selling any common stock in the public market, since they may be able to receive greater proceeds from exercising their conversion rights than from selling their shares assuming that the acquisition is completed. |
Q. | When will I receive the cash amount? | |
A. | If you properly exercise your conversion rights, you will be entitled to receive cash for your shares only if: | |
• The acquisition is completed; and | ||
• You tender your stock certificates to our transfer agent as described in this proxy statement and continue to hold your shares through the closing of the acquisition. |
Q. | When do I need to present my stock certificates? |
A. | In order to exercise your conversion rights, you must present your stock certificates to our transfer agent or obtain certification of your “street name” shares as described in this proxy statement not later than 12:00, noon, New York City time, on May 29, 2007. You also must continue to hold your shares through the closing of the acquisition. |
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Q. | If I exercise my conversion rights, what will happen to my warrants? |
A. | Nothing. The exercise of your conversion rights will not affect any warrants to purchase our common stock that you may own, which will continue to be outstanding and will become exercisable following the acquisition. |
Q. | What are the federal income tax consequences of exercising my conversion rights? | |
A. | If you properly exercise your conversion rights and the acquisition is completed, you will generally be required to recognize capital gain or loss upon the conversion of your IPO shares if such shares were held as a capital asset on the date of the acquisition. Such gain or loss will be measured by the difference between the amount of cash you receive and your tax basis in your converted IPO shares. The gain or loss will be short-term gain or loss if the acquisition closes as scheduled, but may be long term gain or loss if the closing is postponed. | |
There will be no federal income tax consequences to non-converting stockholders as a result of the acquisition. |
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• | Reviewed certain internal financial information relating to the business and financial prospects of Royal Wolf, including financial projections provided by Royal Wolf’s management that were not publicly available; | |
• | Conducted discussions with members of the senior management of Royal Wolf concerning its business and financial prospects; | |
• | Reviewed drafts of the acquisition agreement and certain other agreements related thereto; and |
• | Considered industry data and analyses and such other information as they and our management deemed appropriate. |
• | Discussions with our management regarding Royal Wolf’s established business, record of growth and potential for future growth, the industry in which it competes, and current industry conditions, all of which led our board of directors to conclude that the acquisition presented an opportunity for us and our stockholders to realize value through the acquisition; | |
• | The experience of our management, in particular, Mr. Valenta, in building and consolidating similar businesses in the U.S. and Europe; | |
• | The experience of Royal Wolf’s management, including Robert Allan, Royal Wolf’s Chief Executive Officer, and James Warren, its Chief Operating Officer in building and operating Royal Wolf’s business; | |
• | Royal Wolf’s ability to execute its business plan using its own financing resources, since some of our stockholders may exercise their conversion rights in connection with the acquisition and thereby reduce the funds in the trust account available to us following the acquisition; | |
• | Royal Wolf’s financial results, including revenue growth and expanding operating margins; |
• | The aggregate consideration for the acquisition represented an approximate run-rate adjusted earnings before interest, taxes and depreciation, or EBITDA, multiple of 7.3x Royal Wolf’s projected adjusted EBITDA for the twelve months ending December 31, 2007; |
• | The financial presentations of our management to our board of directors that, based upon and subject to the assumptions made, procedures followed, factors considered and limitations upon its review as of the date of the presentation, the fair value of Royal Wolf exceeded 80% of our net assets, which is one of the requirements for our initial business combination as described under “Satisfaction of 80% Test” below; |
• | The belief by our board of directors that we had paid the fair market value and the lowest price that the sellers were willing to accept, taking into account the terms resulting from extensive negotiations between the parties; |
• | The advice of our legal advisors, Troy & Gould Professional Corporation in the U.S. and Barnes & Wenden in Australia, and our due diligence advisors, Ernst & Young LLP Australia as to tax and structuring matters, La Rue, Corrigan and McCormick LLP as to accounting matters, and Consulting Earth Scientists as to environmental matters; |
• | The terms of the acquisition agreement, including: |
• | The inclusion of a “material adverse effect” clause in our favor, which includes any effect that results or is reasonably likely to result in a decline in Royal Wolf’s EBITDA of 15% or more in any twelve-month period; and |
• | The inclusion of customary representations and warranties of the sellers, non-compete, indemnification and escrow provisions in our favor; |
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• | The need for Bison-GE to participate in the acquisition in order to avoid the possible termination of the original acquisition agreement and permit us to present the Royal Wolf acquisition to a vote of our stockholders, and the willingness of Bison-GE to participate pursuant to the acquisition agreement and related agreements; |
• | The fact that we will own indirectly 86.2%, rather than all, of the RWA shares at the closing of the acquisition; |
• | The provisions of the shareholders agreement, including the fact that we may require Bison-GE to sell to us its 13.8% of the GFN Australasia shares in the future at a price specified in the shareholders agreement to be entered into between us and Bison-GE; |
• | The costs and other potential disadvantages to us and our stockholders of abandoning the proposed acquisition, including the forfeiture of our deposits of $1,005,000, and seeking to identify and negotiate an alternative initial business combination; and |
• | The willingness of Ronald F. Valenta to facilitate our acquisition of Royal Wolf by agreeing to the backup purchase agreement, and the fact that Mr. Valenta will not be compensated for agreeing to the backup purchase agreement. |
• | The risks relating to Royal Wolf’s business set out in this proxy statement in the section entitled “Risk Factors” beginning on page 20; |
• | That Royal Wolf has no current business or operations in the U.S. or outside of Australia; | |
• | That Royal Wolf only recently began generating operating income; |
• | That Royal Wolf’s portable storage sales business is maturing and is not likely to grow at the same rate as its leasing business; |
• | That the provisions of the acquisition agreement will result in our forfeiture of $1,005,000 deposits if the acquisition is not completed for any reason; |
• | That delays in meeting the deadlines set forth in the original acquisition agreement for obtaining stockholder approval and other matters made it necessary to seek Bison-GE’s participation to allow more time to present the acquisition to vote of our stockholders, and the increased acquisition consideration and additional transaction costs associated with the amended acquisition agreement as compared to the original acquisition agreement; and |
• | The provisions of the shareholders agreement, including the fact that Bison-GE may require us to purchase its 13.8% of the GFN Australasia shares in the future at a price specified in the shareholders agreement. |
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• | If the acquisition is not completed and we fail by October 5, 2007 to enter into an agreement in principle or a definitive agreement with respect to another business combination, or having done so we fail to complete the business combination by April 5, 2008, we will be required to liquidate. In that event, the 1,875,000 shares of common stock held by our officers and directors that were acquired prior to the IPO for an aggregate purchase price of $250,000 will be worthless, because our officers and directors have waived all rights to receive any liquidation proceeds with respect to such shares. As of March 23, 2007, the aggregate market value of the shares of our common stock owned by our officers and directors was $14,306,250. |
• | Ronald F. Valenta, our Chief Executive Officer and a director, and John O. Johnson, our Chief Operating Officer, own warrants to purchase an aggregate of 1,477,833 shares of our common stock that they acquired for an aggregate purchase price of $1,400,000, which also will become worthless upon our liquidation. As of March 23, 2007, the aggregate market value of these warrants was $1,921,183. |
• | Mr. Valenta has made available to us a line of credit under which we may borrow from him from time to time up to $3,000,000 at an annual interest rate equal to 8%. Our borrowings under the line of credit have been and will continue to be used by us to pay operating expenses, including deposits and expenses relating to the acquisition. At February 28, 2007, the outstanding amount of principal and accrued interest under the line of credit was $1,317,050. We will continue to borrow funds under the line of credit to pay expenses through the completion of the acquisition. If the acquisition is completed, Mr. Valenta will be repaid all outstanding principal and accrued interest under the line of credit. If, on the other hand, the acquisition or other business combination is not completed and we are required to liquidate as described above, Mr. Valenta will have no recourse against the funds held in the trust account for repayment of any amount owed to him under the line of credit. |
• | All of our current officers and directors will continue to serve as such following the acquisition. In addition, Robert Allan, the Chief Executive Officer of Royal Wolf, will be deemed to be one of our officers following the acquisition and Peter McCann and James Warren, Royal Wolf’s Chief Financial Officer and Chief Operating Officer, respectively, will be key employees. At present, we do not compensate our officers or directors other than Charles E. Barrantes, our Executive Vice President and Chief Financial Officer, whose employment commenced on September 11, 2006. We will have employment agreements with only Messrs. Barrantes and Allan. Mr. Barrantes receives a base annual salary of $200,000 and is eligible to receive an annual bonus each fiscal year of up to 35% of his base salary, provided that he is employed on the last day of such year. Mr. Allan receives a base annual salary of $236,400 and is eligible to receive an performance annual bonus not to exceed $78,800 |
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based upon the achievement of specified performance indicators. Ronald F. Valenta, our Chief Executive Officer and Secretary, John O. Johnson, our Chief Operating Officer, and Marc Perez, our Controller, are not currently compensated for their services; and both Mr. Valenta and Mr. Johnson have advised our board of directors that they will continue to serve in these capacities without compensation until at least the earliest of June 30, 2008 or such time as Royal Wolf achieves a annualized EBITDA of $20 million or we achieve a company-wide total annualized EBITDA of $40 million. If the acquisition is completed, we may modify the compensation to our officers and directors based upon the advice and recommendations of the Compensation Committee of our board of directors. Except as described above, there is no current understanding or arrangement with respect to any future compensation to our officers or directors. |
• | As an inducement to Bison-GE and the management shareholders to enter into the acquisition agreement, Mr. Valenta has entered into a backup purchase agreement with Bison-GE and the management shareholders under which he agrees that, if the acquisition agreement is terminated for any reason, he will purchase from Bison-GE and the management shareholders all of the RWA shares at a purchase price equivalent to the purchase price payable by us under the acquisition agreement. The terms of the backup purchase agreement were determined by arm’s-length negotiations among Mr. Valenta, Bison-GE and the management shareholders. Mr. Valenta will not be entitled to a fee or other compensation for the agreeing to the backup purchase agreement. |
• | The absence of any event that has a material adverse effect on Royal Wolf’s EBITDA over any 12-month period; |
• | ANZ and Bison Capital entering into a subordination agreement with respect to the senior subordinated promissory notes of GFN Australasia to be issued to Bison Capital at the closing of the acquisition; and |
• | ANZ consenting to the transactions contemplated under the acquisition agreement to the extent required in order to maintain Royal Wolf’s existing ANZ credit facilities in place following the acquisition, or the existence of another credit facility acceptable to Bison-GE. |
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• | By us or Bison-GE if the acquisition is not approved by our stockholders at the special meeting, or otherwise by September 1, 2007; and |
• | By Bison-GE or the management sellers if any other closing condition is not satisfied within 20 business days after approval of the acquisition by our stockholders (which termination right will be deemed to be waived unless Bison-GE or the management shareholders give us notice of the termination within 10 business days following expiration of such 20 business day period); and |
• | By any party after March 29, 2008 if any of the other conditions to the closing of the acquisition has not been satisfied and the terminating party has used reasonable efforts to satisfy the conditions. |
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October 14, 2005 | ||||||||
Year Ended | (inception) to | |||||||
December 31, | December 31, | |||||||
2006 | 2006 | |||||||
(In thousands except share information) | ||||||||
General and administrative expenses | $ | 1,171 | $ | 1,175 | ||||
Operating (loss) | (1,171 | ) | (1,175 | ) | ||||
Other income: | ||||||||
Interest expense | (21 | ) | (21 | ) | ||||
Interest income | 1,889 | 1,889 | ||||||
Net income | 457 | 453 | ||||||
Net income per share: | ||||||||
Basic | $ | 0.06 | ||||||
Diluted | 0.05 | |||||||
Weighted average shares outstanding: | ||||||||
Basic | 8,151,000 | |||||||
Diluted | 9,637,000 | |||||||
December 31, 2006 | ||||
(In thousands) | ||||
Cash | $ | 38 | ||
Cash equivalents held in trust | 68,055 | |||
Total assets | 69,128 | |||
Deferred underwriting fees | 1,380 | |||
Total liabilities | 3,797 | |||
Common stock subject to possible conversion | 13,168 | |||
Stockholders’ equity | 52,163 |
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Year Ended | Six Months Ended | ||||||||||||||||||||||||
June 30, | June 30, | Year Ended December 31, | |||||||||||||||||||||||
2006 | 2005 | 2004 | 2003 | 2002 | 2001 | ||||||||||||||||||||
(Restated) | (Restated) | (Restated) | (Restated) | (Unaudited) | (Unaudited) | ||||||||||||||||||||
(In thousands of Australian dollars) | |||||||||||||||||||||||||
Sale and modification of containers | $ | 46,097 | $ | 17,534 | $ | 35,463 | $ | 25,973 | $ | 22,526 | $ | 16,358 | |||||||||||||
Hire of containers | 21,290 | 9,339 | 16,756 | 13,089 | 10,574 | 9,653 | |||||||||||||||||||
Total revenues | 67,387 | 26,873 | 52,219 | 39,062 | 33,100 | 26,011 | |||||||||||||||||||
Results from operating activities | 2,656 | 613 | 3,517 | 2,176 | 2,867 | 1,701 | |||||||||||||||||||
Other income (expense), net | (3,512 | ) | (856 | ) | (3,042 | ) | 747 | (4,482 | ) | (2,769 | ) | ||||||||||||||
Income tax (benefit) | (525 | ) | (30 | ) | (4 | ) | 312 | 203 | (4 | ) | |||||||||||||||
Net income (loss) | (331 | ) | (213 | ) | 479 | 2,611 | (1,412 | ) | (1,697 | ) |
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June 30, | December 31, | ||||||||||||||||||||||||
2006 | 2005 | 2004 | 2003 | 2002 | 2001 | ||||||||||||||||||||
(Restated) | (Restated) | (Restated) | (Restated) | (Unaudited) | (Unaudited) | ||||||||||||||||||||
(In thousands of Australian dollars) | |||||||||||||||||||||||||
Cash and cash equivalents | $ | 777 | $ | 695 | $ | 3 | $ | 1,788 | $ | 788 | $ | 942 | |||||||||||||
Trade and other receivables | 10,206 | 7,876 | 7,024 | 5,205 | 5,339 | 3,831 | |||||||||||||||||||
Inventories | 7,498 | 4,023 | 2,140 | 3,880 | 2,487 | 1,576 | |||||||||||||||||||
Total assets | 66,406 | 47,152 | 39,390 | 34,917 | 24,696 | 21,171 | |||||||||||||||||||
Total current liabilities | 22,710 | 11,807 | 14,190 | 12,015 | 14,296 | 11,069 | |||||||||||||||||||
Non-current interest bearing loans and borrowings | 37,194 | 30,175 | 20,614 | 15,438 | 5,409 | 7,785 | |||||||||||||||||||
Equity | 4,829 | 4,816 | 4,151 | 6,388 | 3,777 | 2,265 |
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Pro Forma | ||||||||
Twelve Months Ended | ||||||||
December 31, 2006 | ||||||||
Assuming No | Assuming Maximum | |||||||
Conversions(1) | Conversions(2) | |||||||
(In thousands except per share data) | ||||||||
Statement of Operations Data: | ||||||||
Revenues and other operating income | $ | 59,489 | $ | 59,489 | ||||
Net loss | (2,987 | ) | (3,351 | ) | ||||
Net income (loss) per share: | ||||||||
Basic | (0.28 | ) | (0.38 | ) | ||||
Diluted | (0.28 | ) | (0.38 | ) |
Pro Forma | ||||||||
December 31, 2006 | ||||||||
Assuming No | Assuming Maximum | |||||||
Conversions(1) | Conversions(2) | |||||||
(In thousands) | ||||||||
Balance Sheet Data: | ||||||||
Cash and cash equivalents | $ | 24,839 | $ | 11,671 | ||||
Total assets | 91,146 | 77,978 | ||||||
Long-term debt | 49,756 | 49,756 | ||||||
Other long-term liabilities | 1,609 | 1,609 | ||||||
Minority interest | 6,771 | 6,771 | ||||||
Stockholders’ equity | 7,082 | (6,086 | ) |
(1) | Assumes that none of our stockholders exercises conversion rights. | |
(2) | Assumes that 19.99% of our IPO shares, or 1,724,138 shares, are converted into their pro rata share of the funds held in the trust account. |
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Year Ended | ||||
December 31, 2006 | ||||
Historical: | ||||
Basic income per share | $ | 0.06 | ||
Diluted income per share | 0.05 |
Twelve Months Ended | ||||
December 31, 2006 | ||||
Pro Forma Consolidated: | ||||
Basic loss per share assuming no conversions(1) | $ | (0.28 | ) | |
Diluted loss per share assuming no conversions(1) | (0.28 | ) | ||
Basic loss per share assuming maximum conversions(2) | (0.38 | ) | ||
Diluted loss per share assuming maximum conversions(2) | (0.38 | ) | ||
Shares Used to Compute Basic Per Share Data: | ||||
Assuming no conversions(1) | 10,500,000 | |||
Assuming maximum conversions(2) | 8,776,000 | |||
Shares Used to Compute Diluted Per Share Data: | ||||
Assuming no conversions(1) | 10,500,000 | |||
Assuming maximum conversions(2) | 8,776,000 |
December 31, 2006 | ||||||||
Historical Book Value of Stockholders’ Equity Per Share | $ | 4.97 | ||||||
Pro Forma Book Value of Stockholders’ Equity Per Share: | ||||||||
Assuming no conversions(1) | $ | 0.66 | ||||||
Assuming maximum conversions(2) | $ | (0.68 | ) |
(1) | Assumes that none of our stockholders exercises conversion rights. | |
(2) | Assumes that 19.99% of our IPO shares, or 1,724,138 shares, are converted into their pro rata share of the funds held in the trust account. |
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Units | Common Stock | Warrants | ||||||||||||||||||||||
High | Low | High | Low | High | Low | |||||||||||||||||||
2007: | ||||||||||||||||||||||||
First Quarter (through March 23) | $ | 9.60 | $ | 8.50 | $ | 7.95 | $ | 7.46 | $ | 1.80 | $ | 1.10 | ||||||||||||
2006: | ||||||||||||||||||||||||
Fourth Quarter | $ | 8.00 | $ | 7.81 | $ | 7.70 | $ | 7.25 | $ | 1.15 | $ | 0.62 | ||||||||||||
Third Quarter | $ | 8.45 | $ | 7.75 | $ | 7.36 | $ | 7.22 | $ | 0.85 | $ | 0.63 | ||||||||||||
Second Quarter | $ | 8.06 | $ | 7.75 | $ | 7.35 | $ | 7.24 | $ | 0.80 | $ | 0.63 |
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• | Approve our acquisition of Royal Wolf; and | |
• | Grant our board of directors discretionary authority to adjourn the special meeting to solicit additional votes for approval of the acquisition if that there are insufficient votes present at the meeting for its approval. |
• | Has unanimously approved the acquisition and determined that it is in the best interests of us and our stockholders; and | |
• | Unanimously recommends that our common stockholders vote “FOR” approval of the acquisition. |
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• | You can vote by completing, dating, signing and returning the enclosed proxy card. If you vote by proxy card, the proxy holders whose names are listed on the proxy card, will vote your shares as you instruct on the proxy card. If you sign and return the proxy card but do not give instructions on how to vote your shares, your shares will be voted as recommended by our board of directors “FOR” the approval of the acquisition and the other proposal described in this proxy statement; and | |
• | You can attend the special meeting and vote in person. We will give you a ballot when you arrive. However, if your shares are held in the name of your broker, bank or another nominee, you must get a proxy from the broker, bank or other nominee. That is the only way we can be sure that the broker, bank or nominee has not already voted your shares. |
• | You may send us another proxy card with a later date; | |
• | You may notify John O. Johnson, our Chief Operating Officer, in writing before the special meeting that you revoke your proxy; or | |
• | You may attend the special meeting, revoke your proxy and vote in person, as indicated above. |
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• | Affirmatively vote against approval of the acquisition; and |
• | No later than 12:00, noon, New York City time, on May 29, 2007 (the time of the special meeting of stockholders; |
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• | present the Continental Stock Transfer & Trust Company, or transfer agent, at the following address: Continent Stock Transfer & Trust Company, 17 Battery Place, New York, New York 10004, Attention: Mark Zimkind, Tel. 212-845-3287, Fax 212-616-7616, your physical stock certificate (together with necessary stock powers) or request for certification of your “street name” shares as described below; and |
• | provide to Continental Stock Transfer & Trust Company a certificate addressed to us to the effects that you wish to convert your shares into your pro rata share of the trust account, that you have held the shares that you seek to convert since the record date and that you will continue to hold the shares through the closing date of the acquisition. The form of this certificate may be obtained from Continental Stock Transfer & Trust Company. |
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• | In May 2006, we approached the owner of and commenced discussions with a California provider of modular buildings that had revenue in excess of $6 million in its most recent fiscal year. We were provided summary financial information, along with a management presentation. Although we furnished the company with a written indication of interest, the parties were unable to agree upon the value of the company and discussions terminated in June 2006. | |
• | In May 2006, we were contacted by an investment bank representingthree German providers of portable storage containers and offices. We were provided with a summary information memorandum that led to discussions of value. The three companies had combined revenues in excess of $20 million in the most recent fiscal year. We determined that the German providers were either too small or too heavily reliant upon sales rather than leasing, which led to the termination of the negotiations in June 2006. |
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Year Ending June 30, 2007(1) | Year Ending June 30, 2006(1) | |||||||
(In millions) | (In millions) | |||||||
Revenue | $ | 67.6 | $ | 48.8 | ||||
Revenue growth | 38.5 | % | 23.7 | % | ||||
EBITDA(2) | $ | 10.7 | $ | 5.2 | ||||
Margin | 15.8 | % | 10.7 | % | ||||
Net capital expenditures | $ | 6.2 | $ | 5.6 | ||||
Number of containers | 17,027 | 16,739 |
(1) | Translated at exchange rate of 0.7239 AUD to USD | |
(2) | Excludes transaction costs |
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• | Increased the acquisition consideration payable by us in cash at the closing by approximately $2.36 million; |
• | Required us to pay approximately $591,000 of the additional cash consideration as a nonrefundable deposit in addition to our prior $1,005,000 deposits; and |
• | Reduced the amount of the acquisition consideration to be retained in escrow following the closing to satisfy the sellers’ indemnification obligations from $5.5 million to approximately $2.5 million. |
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Projected Dec. 31, 2007(1) | Actual TTM Dec. 31, 2006(1) | |||||||
(In millions) | (In millions) | |||||||
Revenue | $ | 79.8 | $ | 62.1 | ||||
Revenue growth | 28.5 | % | 23.7 | % | ||||
EBITDA(2) | $ | 13.8 | $ | 8.1 | ||||
Margin | 17.3 | % | 13.1 | % | ||||
Net capital expenditures | $ | 20.3 | 17.5 | |||||
Number of containers | $ | 22,288 | $ | 17,808 |
(1) | Translated at exchange rate of 0.788 AUD to USD. TTM means Trailing Twelve Months. |
(2) | Excludes transaction costs and transaction-related ESOP conversion costs. |
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• | Royal Wolf has customer service centers in each state in Australia; | |
• | Royal Wolf has average monthly lease container utilization rates of between 81% and 91%; and | |
• | Royal Wolf has over 12,000 active customers in numerous industries. |
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• | The risks relating to Royal Wolf’s business set out in this proxy statement in the section entitled “Risk Factors” beginning on page 20; |
• | The fact that Royal Wolf has no current business or operations in the U.S. or outside of Australia was perceived as more difficult to manage than a U.S. domestic operation and that Royal Wolf had operations throughout Australia but had no business presence beyond that marketplace; |
• | The fact that Royal Wolf currently is unprofitable, has experienced fluctuations in its operating income and has not been able to achieve consistent or improved operating margins even with increasingyear-over-year revenues. While revenues grew substantially, Royal Wolf experienced net losses for the last two fiscal years and a slight decline in the gross margin for the year ended June 30, 2006. The losses in the most recent fiscal year were primarily attributable to higher costs from the introduction of several new products during the fiscal year, coupled with the higher interest expense and debt load. In our directors’ view, this was offset by the strong revenue increase in those products in the later part of the fiscal year along with the interim periods. In addition, the annual revenues of the business asset purchases that were made in 2006 were not fully reflected in the previous financial statements. Our board of directors also took into consideration the view of our management that Royal Wolf’s branch infrastructure was underutilized; |
• | The fact that Royal Wolf’s container sales business is maturing and is not likely to grow at the same rate as its other businesses. Royal Wolf appears to have captured much of the market opportunity, but has been under-capitalized over the past three years. With our focus on a better capital structure, our board of directors |
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believes that we will be able to create more leasing or acquisition opportunities, which is historically a higher margin business, thereby increasing gross margins; |
• | The fact that we will own indirectly 86.2%, rather than all, of the RWA shares at the closing of the acquisition; |
• | The fact that the deposit and termination provisions of the acquisition agreement will result in our forfeiture of deposits totaling $1,005,000 if the acquisition is not completed for any reason; |
• | That delays in meeting the deadlines set forth in the original acquisition agreement for obtaining stockholder approval and other matters made it necessary to seekBison-GE’s participation to allow more time to present the acquisition to vote of our stockholders, and the increased acquisition consideration and additional transaction costs associated with the amended acquisition agreement as compared to the original acquisition agreement; and |
• | The provisions of the shareholders agreement, including the fact thatBison-GE may require us to purchase its 13.8% of the GFN Australasia shares in the future at a price specified in the shareholders agreement. |
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Projected Dec. 31, 2007(1) | Actual TTM Dec. 31, 2006(1) | |||||||
(In millions) | (In millions) | |||||||
Revenue | $ | 79.8 | $ | 62.1 | ||||
Revenue growth | 28.5 | % | 23.7 | % | ||||
EBITDA(2) | $ | 13.8 | $ | 8.1 | ||||
Margin | 17.3 | % | 13.1 | % | ||||
Net capital expenditures | $ | 20.3 | 17.5 | |||||
Number of containers | $ | 22,288 | $ | 17,808 |
(1) | Translated at exchange rate of 0.788 AUD to USD and TTM is equal to Trailing Twelve Months |
(2) | Excludes transaction costs and transaction related ESOP conversion costs |
• | Continued market penetration and customer acceptance of Royal Wolf’s full product range; | |
• | Full-year benefit from Royal Wolf’s newer products introduced during the 2006 fiscal year; | |
• | Integration and full-year benefits from competitor fleet acquisitions made during January through June of 2006; and | |
• | Selling, general and administrative expense savings driven by restructuring of Royal Wolf’s facilities operations. |
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• | Discounted cash flow, or DCF, analysis; | |
• | Comparable companies analysis; and | |
• | Precedent transactions. |
• | Revenue and EBITDA for the twelve months ended December 31, 2006; |
• | Revenue and earnings before interest, taxes, depreciation and amortization, or EBITDA, with EBITDA adjusted to exclude certain non-recurring costs, including transactions costs to be incurred by Royal Wolf in connection with the acquisition, provided by Royal Wolf’s management, for the last twelve-month period, or LTM, ended December 31, 2006; |
• | December 31, 2007 calendar year projections provided to the board of directors by RWA; and |
• | Projections beyond December 31, 2007, up to and including the fiscal year ending June 30, 2010, as prepared by our management team with assistance of Royal Wolf’s management (such extended projections were used only in the DCF analysis); including revenue and adjusted EBITDA estimates. |
At $85 Million | ||||
Aggregate | ||||
Consideration | ||||
• EV to LTM December 31, 2006 — Actual revenue | 1.62x | |||
• EV to December 31, 2007 — Management projected revenue | 1.26x | |||
• EV to LTM December 31, 2006 — Actual adjusted EBITDA | 12.43x | |||
• EV to December 31, 2007 — Management projected adjusted EBITDA | 7.3x |
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• | Revenue Growth: The gross revenue grew by virtue of increased fleet spending and asset purchases, especially in the rental/hire pool, the full run rate of acquisitions made at the end of the previous fiscal year, a |
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5% rate increase in FY 2008 and the introduction of a damage waiver program in FY 2008 which had a lag affect into 2009. These assumptions produced the resulting percentage increases in revenue: |
2007 | 2008 | 2009 | 2010 | |||||||||||
37.9 | % | 10.7 | % | 20.9 | % | 12.6 | % |
• | Gross Margins: Our gross margins were changed primarily reflecting the dramatic increase in fleet inventory spending during the last 5 months that should continue and extend into 2008 as evidenced by the increased fleet spending and change of mix. The rate increase and the damage waiver will impact the margins as no new branches and only marginal direct or fixed costs will be added during the coming year. |
2007 | 2008 | 2009 | 2010 | |||||||||||
38.2 | % | 41.0 | % | 40.4 | % | 43.5 | % |
• | Costs: Input costs were inflation adjusted based on Royal Wolf management’s inflation estimates, but lower than revenue growth as a result of the impact of leveraging the sales/leasing growth against the infrastructure put into place in 2004-2006. These exclude the one-time costs incurred during the purchase to payout the ESOP and transaction expenses. |
• Mobile Mini Inc. | Nasdaq NMS — MINI | |
• Williams-Scotsman | Nasdaq NMS — WLSC | |
• McGrath Rentcorp | Nasdaq NMS — MGRC |
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Enterprise Value / | ||||||||||||||||||||||||
Last Twelve Months(1) | LTM | FRY1 | LTM | FRY1 | ||||||||||||||||||||
Company | Revenue | EBITDA | Revenue | Revenue | EBITDA | EBITDA | ||||||||||||||||||
Mobile Mini, Inc. | $ | 273.4 | $ | 119.3 | 4.7 | x | 4.0 | x | 10.7 | x | 9.2 | x | ||||||||||||
McGrath Rentcorp | $ | 267.1 | $ | 119.3 | 3.4 | x | 3.0 | x | 7.2 | x | 6.7 | x | ||||||||||||
Williams Scotsman International, Inc. | $ | 680.8 | $ | 228.74 | 2.6 | x | 2.4 | x | 7.7 | x | 7.0 | x | ||||||||||||
High | 4.7 | x | 4.0 | x | 10.7 | x | 9.2 | x | ||||||||||||||||
Mean | 3.6 | x | 3.1 | x | 8.5 | x | 7.6 | x | ||||||||||||||||
Median | 3.4 | x | 3.0 | x | 7.7 | x | 7.0 | x | ||||||||||||||||
Low | 2.6 | x | 246 | x | 7.2 | x | 6.7 | x |
(1) | Source: Company SEC filings & CapitalIQ. |
• | EV as a multiple of actual Calendar year December 31, 2006 and management projected Calendar year December 31, 2007 revenue; and |
• | EV as a multiple of actual Calendar year December 31, 2006 and management projected Calendar year December 31, 2007 EBITDA. |
Mean | Median | Range | Valuation Range(2) | Transaction | ||||||||||||||||
(In Millions) | ||||||||||||||||||||
Selected Companies: | ||||||||||||||||||||
EV to Revenue | ||||||||||||||||||||
LTM12/31/07(x) | 3.6 | 3.4 | 2.6 to 4.7 | $ | 161.5 to $291.87 | 1.62x | ||||||||||||||
Projected Calendar Year 2007(1) | 3.1 | 3.0 | 2.4 to 4.0 | $ | 191.5 to $319.2 | 1.26x | ||||||||||||||
EV to EBITDA | ||||||||||||||||||||
LTM 12/31/07(x) | 8.5 | 7.7 | 7.2 to 10.7 | $ | 58.3 to $86.7 | 12.43x | ||||||||||||||
Projected Calendar Year 2007(1) | 7.6 | 7.0 | 6.7 to 9.2 | $ | 92.5 to $126.96 | 7.3x |
(1) | Projected calendar year 12/31/07 is used as a date comparison to the public companies Forward Year |
(2) | Translated at exchange rate of 0.788 AUD to USD. |
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Target | Date | Deal | Implied EV / | Implied EV / | ||||||
Acquiror | Effective | Value | Sales | EBITDA | ||||||
Mobile Storage Group, Inc. Welsh, Carson, Anderson & Stowe | 07/11/06 | $608.5 | 2.8x | 9.1x | ||||||
Royal Wolf Portable Storage Inc. Mobile Mini Inc. (NasdaqNM:MINI) | 03/13/06 | $48.5 | 2.8x | 8.5x | ||||||
Waco International Limited Asia Opportunity Fund, J.P. Morgan Partners | 01/17/06 | $893.3 | 1.5x | — | ||||||
Skanska Modul AB 3i Group plc (LSE:III) | 11/28/05 | $45.0 | 0.8x | — | ||||||
Baker Tanks, Inc. Lightyear Capital, LLC , Lightyear Fund, L.P. | 10/17/05 | $500.0 | — | 8.8x | ||||||
HIGH | 2.8x | 9.1x | ||||||||
MEAN | 2.0x | 8.8x | ||||||||
HARMONIC MEAN | 2.2x | 8.8x | ||||||||
MEDIAN | 2.2x | 8.8x | ||||||||
LOW | 0.8x | 8.5x |
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Implied | ||||
Transaction Multiple: | ||||
LTM | LTM | |||
Revenue(x) | EBITDA(x) | |||
Mean | 2.0 | 8.8 | ||
Median | 2.2 | 8.8 | ||
Range | .8 - 2.8 | 8.5 - 9.1 |
Valuation Range(2) | ||||
(In millions) | ||||
LTM | LTM | |||
Revenue | EBITDA | |||
Mean | $124.2 | $71.3 | ||
Range | $49.7 - $173.9 | $68.8-$73.7 |
Estimated 2007(1) | Estimated 2007(1) | |||
Revenue | EBITDA | |||
Mean | $159.6 | $121.4 | ||
Range | $63.8-$223.4 | $117.3-$125.6 |
(1) | Because of differences in year-end between the public companies with fiscal years ending December 31 and Royal Wolf with a June 30 fiscal year, the “Estimated 2007” date for Royal Wolf will be for the calendar year ended December 31, 2007. |
(2) | Translated at exchange rate of 0.788 AUD to USD |
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• | If the acquisition is not completed and we fail by October 5, 2007 to enter into an agreement in principle or a definitive agreement with respect to another business combination, or having done so we fail to complete the business combination by April 5, 2008, we will be required to liquidate. In that event, the 1,875,000 shares of common stock held by our officers and directors that were acquired prior to the IPO for an aggregate purchase price of $250,000 will be worthless, because our officers and directors have waived all rights to receive any liquidation proceeds with respect to such shares. As of March 23, 2007, the aggregate market value of the shares of our common stock owned by our officers and directors was $14,306,250. |
• | Ronald F. Valenta, our Chief Executive Officer and a director, and John O. Johnson, our Chief Operating Officer, own warrants to purchase an aggregate of 1,477,833 shares of our common stock that they acquired for an aggregate purchase price of $1,400,000, which also will become worthless upon our liquidation. As of March 23, 2007, the aggregate market value of these warrants was $1,921,183. |
• | Mr. Valenta has made available to us a line of credit under which we may borrow from him from time to time up to $3,000,000 at an annual interest rate equal to 8%. Our borrowings under the line of credit have been and will continue to be used by us to pay operating expenses, including deposits and expenses relating to the acquisition. At February 28, 2007, the outstanding amount of principal and accrued interest under the line of credit was $1,317,050. We will continue to borrow funds under the line of credit to pay expenses through the completion of the acquisition. If the acquisition is completed, Mr. Valenta will be repaid all outstanding principal and accrued interest under the line of credit. If, on the other hand, the acquisition or other business combination is not completed and we are required to liquidate as described above, Mr. Valenta will have no recourse against the funds held in the trust account for repayment of any amount owed to him under the line of credit. | |
• | All of our current officers and directors will continue to serve as such following the acquisition. In addition, Robert Allan, the Chief Executive Officer of Royal Wolf, will be deemed to be one of our officers following the acquisition and Peter McCann and James Warren, Royal Wolf’s Chief Financial Officer and Chief Operating Officer, respectively, will be key employees. At present, we do not compensate our officers or directors other than Charles E. Barrantes, our Executive Vice President and Chief Financial Officer, whose employment commenced on September 11, 2006. We will have employment agreements |
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with only Messrs. Barrantes and Allan. Mr. Barrantes receives a base annual salary of $200,000 and is eligible to receive an annual bonus each fiscal year of up to 35% of his base salary, provided that he is employed on the last day of such year. Mr. Allan receives a base annual salary of $236,400 and is eligible to receive an performance annual bonus not to exceed $78,800 based upon the achievement of specified performance indicators. Ronald F. Valenta, our Chief Executive Officer and Secretary, John O. Johnson, our Chief Operating Officer, and Marc Perez, our Controller, are not currently compensated for their services; and both Mr. Valenta and Mr. Johnson have advised our board of directors that they will continue to serve in these capacities without compensation until at least the earliest of June 30, 2008 or such time as Royal Wolf achieves annualized EBITDA of $20 million or we achieve a company-wide total annualized EBITDA of $40 million. If the acquisition is completed, we may modify the compensation to our officers and directors based upon the advice and recommendations of a compensation committee of our board of directors to be established. Except as described above, there is no current understanding or arrangement with respect to any future compensation to our officers or directors. |
• | As an inducement toBison-GE and the management shareholders to enter into the acquisition agreement, Mr. Valenta has entered into a backup purchase agreement withBison-GE and the management shareholders under which he agrees that, if the acquisition agreement is terminated for any reason, he will purchase fromBison-GE and the management shareholders all of the RWA shares at a purchase price equivalent to the purchase price payable by us under the acquisition agreement. The terms of the backup purchase agreement were determined by arm’s-length negotiations among Mr. Valenta,Bison-GE and the management shareholders. Mr. Valenta will not be entitled to a fee or other compensation for the agreeing to the backup purchase agreement. |
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Aggregate acquisition consideration | $ | 91,802,000 | ||
Add: | ||||
Container rental equipment | 6,987,000 | |||
Less: | ||||
Net tangible assets | (935,000 | ) | ||
Other, net | (314,000 | ) | ||
Aggregate adjusted consideration | 97,540,000 | |||
Less: | ||||
Non-compete covenant | (2,364,000 | ) | ||
Assumed bank debt | (37,858,000 | ) | ||
Net acquisition consideration | $ | 57,318,000 | ||
• | Container Rental Equipment. If the gross amount of container rental equipment at the closing was greater than the specified amount, the purchase price was to be increased by the amount of such excess, and if the gross amount of container rental equipment at the closing was less than the specified amount, the purchase price was to be decreased by the amount of such deficiency. Gross container rental equipment of $43,928,000 was greater than the specified amount of $36,941,000 by $6,987,000. |
• | Net Tangible Assets. If the total assets less all intangibles and liabilities of Royal Wolf, excluding the amount required to cash out outstanding options, the bonus to the former chairman and costs and expenses of the acquisition were less than $2,128,000 at the closing, the aggregate consideration was to be decreased by the amount of the shortfall, or $935,000. |
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• | Proper corporate organization and similar corporate matters; |
• | The authorization, performance and enforceability of the acquisition agreement; and |
• | Ownership of RWA shares; |
• | No conflict or breach of any material contracts; |
• | Liquidation, insolvency or defaults of any of the sellers; and |
• | No option, right to acquire or encumbrance of or affecting the shares; |
• | Proper corporate organization and similar corporate matters of RWA and its subsidiaries; | |
• | No insolvency event; | |
• | Subsidiaries; | |
• | Shares; shares in the subsidiaries; no issuance of dividends; | |
• | Lack of any other subsidiary, partnership, joint venture or unincorporated association, or any other business entity; | |
• | Title to and ownership of properties and assets, including intellectual property rights; | |
• | Accuracy, maintenance and possession of records; | |
• | Financial information; |
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• | Compliance; required filings; | |
• | Tax matters; | |
• | Litigation; | |
• | Environmental matters; | |
• | Labor matters; | |
• | Material contracts; | |
• | Insurance; and | |
• | Leased property. |
• | Enter into, terminate or alter any term of any material contract or commitment with a value equal to or greater than $78,800; |
• | Incur any material liability of $39,400 or more outside the ordinary course of the business; |
• | Dispose of, agree to dispose of, encumber or grant an option over any of its assets outside the ordinary course of the business; |
• | Hire or terminate any senior employee or alter the terms of employment of any senior employee whose salary package is valued at $118,200 or more; |
• | Allot or issue or agree to allot or issue any share or any security convertible into any share; | |
• | Declare or pay any dividends or make any other distribution of assets or profits; | |
• | Alter or agree to alter the constitution; or | |
• | Pass any special resolution. |
• | The absence of any event that has a material adverse effect on Royal Wolf’s EBITDA over any12-month period; |
• | ANZ and Bison Capital entering into a subordination agreement with respect to the senior subordinated promissory notes of GFN Australasia to be issued to Bison Capital at the closing of the acquisition; and |
• | ANZ consenting to the transactions contemplated under the acquisition agreement to the extent required in order to maintain Royal Wolf’s existing ANZ credit facility in place following the acquisition, or the existence of another credit facility acceptable to Bison-GE. |
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• | 8.25 times EBITDA of Royal Wolf, as increased to include payments by Royal Wolf to us for expenses, less “net debt” (as defined); |
• | A specified multiple (based upon the market price of our common stock as a multiple of our consolidated EBITDA), which is referred to as the “GFC trading multiple,” multiplied by EBITDA of Royal Wolf, less “net debt”; and |
• | The purchase price that Bison-GE paid for its shares. |
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• | 8.75 multiplied by EBITDA of Royal Wolf, as increased to include payments by Royal Wolf to us for expenses, less “net debt”; and |
• | The GFC trading multiple multiplied by EBITDA of Royal Wolf, less the “net debt.” |
• | Sell or transfer material assets outside of the ordinary course of business; |
• | Appoint or remove an auditor; |
• | Enter into a related-party transaction, provided that we may pay up to $1 million per year for expenses of related parties (which amount is subject to reduction to not less than $500,000 if we make other acquisitions); |
• | Issue, pledge or redeem any shares (other than for senior debt); |
• | Pay any dividends; |
• | Change the nature of the business; or |
• | Merge or consolidate with any person. |
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• | Engage in a business that competes with Royal Wolf for a period of five years after the closing; | |
• | Solicit, canvass, approach or accept an approach from a person who was at any time during the 12 months ending on the closing a customer of Royal Wolf with a view to obtaining their business that is in competition with the business of Royal Wolf for a period of four years after the closing; | |
• | Interfere with the relationship between Royal Wolf and its customers, employees or suppliers for a period of three years after the closing; | |
• | Induce or help to induce a Royal Wolf employee to leave their employment for a period of two years after the closing; or | |
• | Disclose or use to their advantage or to Royal Wolf’s disadvantage, itself or by any of its subsidiaries, agents, or representatives, any of the trade secrets or any confidential information relating to Royal Wolf or its business at any time after the closing. |
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• | Accompanying notes to the unaudited pro forma condensed combined statements; | |
• | Separate historical financial statements of Royal Wolf for the periods ended June 30, 2006 included elsewhere in this proxy statement; and | |
• | Our separate historical financial statements for the year ended December 31, 2006, which are not included in this proxy statement but can be obtained as described in the section “Where You Can Find More Information.” |
• | Assuming No Conversions: This presentation assumes none of our stockholders exercises their conversion rights; and | |
• | Assuming Maximum Conversions: This presentation assumes that 19.99% of our stockholders exercise their conversion rights. |
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Pro Forma | Pro Forma | |||||||||||||||
GFN | Royal Wolf | Adjustments | Combined | |||||||||||||
(In thousands except share data) | ||||||||||||||||
ASSETS | ||||||||||||||||
Current assets: | ||||||||||||||||
Cash | $ | 38 | $ | 484 | $ | 68,055 | (a) | $ | 24,839 | |||||||
(42,358 | )(b) | |||||||||||||||
(1,380 | )(b) | |||||||||||||||
Cash held in trust account | 68,055 | — | (68,055 | )(a) | — | |||||||||||
Other current assets | 19 | 19,077 | — | 19,096 | ||||||||||||
Total current assets | 68,112 | 19,561 | (43,738 | ) | 43,935 | |||||||||||
Property and equipment, net | 3 | 39,447 | — | 39,450 | ||||||||||||
Intangible assets, net | — | 3,785 | 2,368 | (b) | 7,010 | |||||||||||
857 | (b) | |||||||||||||||
Other assets | 1,013 | 549 | (811 | )(b) | 751 | |||||||||||
Total assets | $ | 69,128 | $ | 63,342 | $ | (41,324 | ) | $ | 91,146 | |||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||
Current liabilities: | ||||||||||||||||
Trade accounts payable | $ | 462 | $ | 11,809 | $ | — | $ | 12,271 | ||||||||
Accrued expenses | 77 | 3,126 | 857 | (b) | 4,060 | |||||||||||
Other current liabilities | 3,258 | 7,719 | (1,380 | )(b) | 9,597 | |||||||||||
Total current liabilities | 3,797 | 22,654 | (523 | ) | 25,928 | |||||||||||
Long term liabilities: | ||||||||||||||||
Notes payable | — | 34,781 | 14,975 | (b) | 49,756 | |||||||||||
Other long term liabilities | — | 1,609 | — | 1,609 | ||||||||||||
Total long term liabilities | — | 36,390 | 14,975 | 51,365 | ||||||||||||
Common stock subject to possible conversion, 1,724,138 shares at conversion value | 13,168 | — | (13,168 | )(b) | — | |||||||||||
Minority interest | — | — | 6,771 | (b) | 6,771 | |||||||||||
Stockholders’ equity: | ||||||||||||||||
Common stock | 1 | 3,591 | (3,591 | )(b) | 1 | |||||||||||
Retained earnings | 453 | 707 | (453 | )(b) | (2,465 | ) | ||||||||||
328 | (b) | |||||||||||||||
(3,500 | )(b) | |||||||||||||||
Additional paid-in capital | 51,709 | — | (6,771 | )(b) | 9,546 | |||||||||||
(488 | )(c) | |||||||||||||||
13,168 | (b) | |||||||||||||||
447 | (b) | |||||||||||||||
3,500 | (b) | |||||||||||||||
(52,019 | )(b) | |||||||||||||||
Total stockholders’ equity | 52,163 | 4,298 | (49,379 | ) | 7,082 | |||||||||||
Total liabilities and stockholders’ equity | $ | 69,128 | $ | 63,342 | $ | (41,324 | ) | $ | 91,146 | |||||||
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Pro Forma | Pro Forma | |||||||||||||||
GFN | Royal Wolf | Adjustments | Combined | |||||||||||||
(In thousands except share data) | ||||||||||||||||
ASSETS | ||||||||||||||||
Current assets: | ||||||||||||||||
Cash | $ | 38 | $ | 484 | $ | 68,055 | (a) | $ | 11,671 | |||||||
(42,358 | )(b) | |||||||||||||||
(1,380 | )(b) | |||||||||||||||
(13,168 | )(b) | |||||||||||||||
Cash held in trust account | 68,055 | — | (68,055 | )(a) | — | |||||||||||
Other current assets | 19 | 19,077 | — | 19,096 | ||||||||||||
Total current assets | 68,112 | 19,561 | (56,906 | ) | 30,767 | |||||||||||
Property and equipment, net | 3 | 39,447 | — | 39,450 | ||||||||||||
Intangible assets, net | — | 3,785 | 2,368 | (b) | 7,010 | |||||||||||
857 | (b) | |||||||||||||||
Other assets | 1,013 | 549 | (811 | )(b) | 751 | |||||||||||
Total assets | $ | 69,128 | $ | 63,342 | $ | (54,492 | ) | $ | 77,978 | |||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||
Current liabilities: | ||||||||||||||||
Trade accounts payable | $ | 462 | $ | 11,809 | $ | — | $ | 12,271 | ||||||||
Accrued expenses | 77 | 3,126 | 857 | (b) | 4,060 | |||||||||||
Other current liabilities | 3,258 | 7,719 | (1,380 | )(b) | 9,597 | |||||||||||
Total current liabilities | 3,797 | 22,654 | (523 | ) | 25,928 | |||||||||||
Long term liabilities: | ||||||||||||||||
Notes payable | — | 34,781 | 14,975 | (b) | 49,756 | |||||||||||
Other long term liabilities | — | 1,609 | — | 1,609 | ||||||||||||
Total long term liabilities | — | 36,390 | 14,975 | 51,365 | ||||||||||||
Common stock subject to possible conversion, 1,724,138 shares at conversion value | 13,168 | — | (13,168 | )(b) | — | |||||||||||
Minority interest | — | — | 6,771 | (b) | 6,771 | |||||||||||
Stockholders’ equity: | ||||||||||||||||
Common stock | 1 | 3,591 | (3,591 | )(b) | 1 | |||||||||||
Retained earnings | 453 | 707 | (453 | )(b) | (2,465 | ) | ||||||||||
328 | (b) | |||||||||||||||
(3,500 | )(b) | |||||||||||||||
Additional paid-in capital | 51,709 | — | (6,771 | )(b) | (3,622 | ) | ||||||||||
(488 | )(c) | |||||||||||||||
447 | (b) | |||||||||||||||
3,500 | (b) | |||||||||||||||
(52,019 | )(b) | |||||||||||||||
Total stockholders’ equity | 52,163 | 4,298 | (62,547 | ) | (6,086 | ) | ||||||||||
Total liabilities and stockholders’ equity | $ | 69,128 | $ | 63,342 | $ | (54,492 | ) | $ | 77,978 | |||||||
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Pro Forma | Pro Forma | |||||||||||||||
GFN | Royal Wolf | Adjustments | Combined | |||||||||||||
(In thousands except share and per share data) | ||||||||||||||||
Revenue | $ | — | $ | 59,489 | $ | — | $ | 59,489 | ||||||||
Cost of sales | — | 36,792 | — | 36,792 | ||||||||||||
Gross margin | — | 22,697 | — | 22,697 | ||||||||||||
Operating expenses | 1,171 | 14,663 | 3,250 | (h) | 19,084 | |||||||||||
Depreciation and amortization | — | 3,158 | 1,134 | (e) | 4,292 | |||||||||||
Operating (loss)/income | (1,171 | ) | 4,876 | (4,384 | ) | (679 | ) | |||||||||
Interest income | (1,889 | ) | — | 672 | (g) | (1,217 | ) | |||||||||
Interest expense | 21 | 3,292 | 1,519 | (d) | 5,029 | |||||||||||
197 | (f) | |||||||||||||||
Other expenses | — | 39 | — | 39 | ||||||||||||
Total other expenses/(income) | (1,868 | ) | 3,331 | 2,388 | 3,851 | |||||||||||
Income/(loss) before provision for income taxes and minority interest | 697 | 1,545 | (6,772 | ) | (4,530 | ) | ||||||||||
Provision/(credit) for income taxes | 240 | 757 | (2,062 | )(i) | (1,065 | ) | ||||||||||
Minority interest | — | — | 478 | (j) | 478 | |||||||||||
Net income/(loss) | $ | 457 | $ | 788 | $ | (4,232 | ) | $ | (2,987 | ) | ||||||
Net loss per share: | ||||||||||||||||
Basic | $ | (0.28 | ) | |||||||||||||
Diluted | $ | (0.28 | ) | |||||||||||||
Weighted average shares outstanding: | ||||||||||||||||
Basic | 10,500,000 | (k) | ||||||||||||||
Diluted | 10,500,000 | (k) | ||||||||||||||
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Pro Forma | Pro Forma | |||||||||||||||
GFN | Royal Wolf | Adjustments | Combined | |||||||||||||
(In thousands except share and per share data) | ||||||||||||||||
Revenue | $ | — | $ | 59,489 | $ | — | $ | 59,489 | ||||||||
Cost of sales | — | 36,792 | — | 36,792 | ||||||||||||
Gross margin | — | 22,697 | — | 22,697 | ||||||||||||
Operating expenses | 1,171 | 14,663 | 3,250 | (h) | 19,084 | |||||||||||
Depreciation and amortization | — | 3,158 | 1,134 | (e) | 4,292 | |||||||||||
Operating (loss)/income | (1,171 | ) | 4,876 | (4,384 | ) | (679 | ) | |||||||||
Interest income | (1,889 | ) | — | 1,317 | (g) | (572 | ) | |||||||||
Interest expense | 21 | 3,292 | 1,519 | (d) | 5,029 | |||||||||||
197 | (f) | |||||||||||||||
Other expenses | — | 39 | — | 39 | ||||||||||||
Total other expenses/(income) | (1,868 | ) | 3,331 | 3,033 | 4,496 | |||||||||||
Income/(loss) before provision for income taxes and minority interest | 697 | 1,545 | (7,417 | ) | (5,175 | ) | ||||||||||
Provision/(credit) for income taxes | 240 | 757 | (2,284 | )(i) | (1,287 | ) | ||||||||||
Minority interest | — | — | 537 | (j) | 537 | |||||||||||
Net income/(loss) | $ | 457 | $ | 788 | $ | (4,596 | ) | $ | (3,351 | ) | ||||||
Net loss per share: | ||||||||||||||||
Basic | $ | (0.38 | ) | |||||||||||||
Diluted | $ | (0.38 | ) | |||||||||||||
Weighted average shares outstanding: | ||||||||||||||||
Basic | 8,776,000 | (k) | ||||||||||||||
Diluted | 8,776,000 | (k) | ||||||||||||||
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FINANCIAL STATEMENTS
(Amounts in thousands, except share data)
Acquisition consideration(1) | $ | 100,911 | ||
Transaction costs | 1,600 | |||
Total acquisition consideration | $ | 102,511 | ||
(1) | Assumes that the business combination closed in sixty days as of December 31, 2006 |
Cash from trust account | $ | 42,358 | ||
Deposit paid to Royal Wolf sellers | 811 | |||
Contemplated financing: | ||||
Amended revolver | 34,417 | |||
Mezzanine financing (including 500,000 warrants with an estimated value of $447) | 15,786 | |||
50,203 | ||||
Non-compete agreement | 2,368 | |||
Issuance of shares of capital stock of GFN Australasia, resulting in minority interest of 13.8% | 6,771 | |||
$ | 102,511 | |||
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FINANCIAL STATEMENTS — (Continued)
Twelve months ended December 31, 2006 | ||||||||
No Conversions | Maximum Conversions | |||||||
Estimated interest on contemplated financing: | ||||||||
Amended revolver | $ | 2,637 | $ | 2,637 | ||||
Mezzanine financing | 2,119 | 2,119 | ||||||
4,756 | 4,756 | |||||||
Other interest — financing leases | 55 | 55 | ||||||
Estimated interest related to Royal Wolf | 4,811 | 4,811 | ||||||
Interest expense recorded | 3,292 | 3,292 | ||||||
Pro forma adjustment | $ | 1,519 | $ | 1,519 | ||||
For the twelve months ended December 31, 2006 | ||||||||
No Conversion | Maximum Conversion | |||||||
Common stock issued to initial stockholder | 1,875,000 | 1,875,000 | ||||||
Common stock issued in connection with the IPO | 7,500,000 | 7,500,000 | ||||||
Common stock issued in connection with underwriters’ over-allotment option | 1,125,000 | 1,125,000 | ||||||
Common stock converted to cash | — | (1,724,000 | ) | |||||
10,500,000 | 8,776,000 | |||||||
As a result of the net loss reflected in the unaudited pro forma condensed combined statements of income, basic and diluted shares used are the same. |
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• Legal fees and expenses | $ | 331,650 | ||
• Printing and engraving expenses | 96,059 | |||
• Accounting fees and expenses | 30,600 | |||
• SEC registration fee | 23,928 | |||
• NASD filing fee | 20,850 | |||
• AMEX filing fee | 78,125 | |||
• Initial Trustee’s fee | 1,000 | |||
• Miscellaneous expenses | 12,505 | |||
Total other offering expenses | $ | 594,717 | ||
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• | Our board of directors will convene and adopt a specific plan of dissolution and liquidation, which it will then vote to recommend to our stockholders; at such time it will also cause to be prepared a preliminary proxy statement setting out our plan of dissolution and liquidation as well as the board’s recommendation of the plan; | |
• | We will then promptly file our preliminary proxy statement with the Securities and Exchange Commission; | |
• | If the Securities and Exchange Commission does not review the preliminary proxy statement, then, approximately ten days following the filing of the preliminary proxy statement, we will mail the definitive proxy statement to our stockholders, and approximately thirty days following the mailing of such definitive proxy statement, we will convene a meeting of our stockholders, at which they will vote on our plan of dissolution and liquidation; and | |
• | If the Securities and Exchange Commission does review the preliminary proxy statement, we currently estimate that we will receive their comments approximately thirty days after the filing of the proxy statement; we will then mail the definitive proxy statement to our stockholders following the conclusion of the comment and review process (the length of which we cannot predict with any certainty and which may be substantial) and we will convene a meeting of our stockholders at which they will vote on our plan of dissolution and liquidation. |
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Creditor | Amount Owed | |||
Ernst & Young LLP | $ | 62,800 | ||
Bowne & Co. | 56,400 | |||
Royal Wolf (reimbursable fees and expenses) | 42,600 | |||
Barnes & Wenden | 28,900 | |||
American Stock Exchange | 21,500 | |||
Continental Stock Transfer & Trust Company | 2,100 | |||
Vintage Filings, Inc. | 1,300 | |||
AT&T | 1,000 | |||
LaRue, Corrigan & McCormick LLP | 400 | |||
Intercall | 100 | |||
$ | 217,100 | |||
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U.S.$ | Percent | |||||||
(In millions) | ||||||||
Sales revenues | $ | 21.6 | 42 | % | ||||
Leasing revenues | $ | 7.6 | 15 | % | ||||
Containers in lease fleet | 8,988 | 66 | % |
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U.S.$ | Percent | |||||||
(In millions) | ||||||||
Sales revenues | $ | 3.7 | 7 | % | ||||
Leasing revenues | $ | 5.5 | 11 | % | ||||
Containers in lease fleet | 4,205 | 31 | % |
U.S.$ | Percent | |||||||
(In millions) | ||||||||
Sales revenues | $ | 3.9 | 8 | % | ||||
Leasing revenues | $ | 0.3 | 1 | % | ||||
Containers in lease fleet | 400 | 3 | % |
• | In December 2005, Royal Wolf acquired the assets of Cairns-based Cape Containers for a purchase price of $647,000. This purchase resulted in the acquisition of 173 portable storage units and the related customer base; |
• | In March 2006, Royal Wolf purchased the remaining shares of Royal Wolf-Hi Tech, a Newcastle-based joint venture, for $660,000, which added a further 676 portable storage units to the Royal Wolf lease fleet; |
• | In April 2006, Royal Wolf acquired the assets of Melbourne-based Australian Container Network, or ACN, for $4.3 million. This acquisition added a further 891 units to Royal Wolf’s lease fleet and eliminated the second-largest portable storage supplier in Melbourne (next to Royal Wolf) from the market; and |
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• | In August 2006, Royal Wolf purchased container units from Townsville-based Bohle Containers for $156,000. This was a small but strategically important transaction that added a further 57 units to Royal Wolf’s lease fleet. |
• | As rapid deployment storage for the military, emergency services, and disaster relief; | |
• | As portable work camps for the mining and resources industry, including accommodations, ablution and kitchen containers; |
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• | As low-cost accommodations for remote communities and caravan parks; | |
• | As offices, workshops or storerooms in a growing range of sizes and configurations; | |
• | As an economical alternative to fixed-site mini storage; and | |
• | As cost-effective farm storage for cattle feed, farm equipment, fertilizers, and other items. |
• | Senior management informal estimates and internal surveys (see tables below) of competitor rental fleet size and annual sales volumes involving the regional Royal Wolf General Managers, senior marketing management, and, where possible, external information such as competitor newsletters, information memoranda on buy-side opportunities, placement of advertising in the approximately 40 regional yellow pages, and discussions with corporate customers and suppliers of used boxes such as wholesalers, shipping lines, and container fleet lessors; and | |
• | Informal estimates of competitor rental fleet and sale volumes were converted into annual revenue numbers using the following formula: |
• | Rental revenues: number of containers in rental fleet at an assumed industry-wide utilization rate of 75% times the average standard 20’ container rental rate for the region times 365 days. Management’s estimate of the 75% industry-wide container utilization rate was determined by discounting Royal Wolf’s actual historical utilization rate, which management believes is higher than the average utilization rate in the industry based upon its informal observations and its own ability to efficiently distribute and rehire fleet due to its national branch infrastructure. The competitor utilization rate was internally generated by conversations with corporate customers and larger users, as well as suppliers of used boxes and conversations with competitors. The 20’ foot sales rate was determined by Royal Wolf management after discussions with wholesalers, shipping lines, and container leasing companies, as well as its own experience in selling boxes year to date. We have no independent corroboration of this information, and there is no assurance that this internally-generated information is accurate or complete; and | |
• | Sales revenues: number of containers sold annually times average standard 20’ Container retail sale price for the region. |
• | The level of knowledge among potential customers regarding the availability and benefits of containerized storage in key Australian markets, such as the construction and mining industries, is still low; | |
• | Suppliers and customers continue to develop further uses for portable containers, thereby broadening the market for portable containers; and | |
• | As the market leader in Australia, Royal Wolf has consistently achieved organic growth and based, in part, on growth in the market as a whole. |
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Estimated | ||||||||
Scope of | Lease | |||||||
Competitor | Operations | Containers | ||||||
Royal Wolf | National | 17000 | ||||||
GE Seaco | National | 7000 | ||||||
Simply Containers | Regional | 7000 | ||||||
Macfield | Regional | 7000 | ||||||
ANL CGM | Regional | 2000 |
• | Engineering, construction and resources — approximately 50%. | |
• | Non-residential building construction — approximately 35%. | |
• | Recreation and holiday market — approximately 15%. |
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Estimated | ||||||||
Scope of | Lease | |||||||
Competitor | Operations | Buildings | ||||||
Coates | National | 22000 | ||||||
Ausco | National | 15000 | ||||||
Nomad | National | 10000 | ||||||
Atco | National | 8500 | ||||||
Royal Wolf | National | 500 |
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Estimated | ||||||||
Scope of | Lease | |||||||
Competitor | Operations | Containers | ||||||
Macfield | National | 3500 | ||||||
Royal Wolf | National | 2400 | ||||||
Cronos | National | 1250 | ||||||
Simply Containers | National | 1250 |
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Portable storage containers: | 10’, 20’ & 40’ general purpose units | |
Mini Cube units | ||
Dangerous Goods containers | ||
Refrigerated containers | ||
Portable container buildings: | Site offices & Cabins | |
Workforce accommodation unit | ||
Luxury accommodation unit | ||
Ablutions block | ||
Freight Containers: | Curtain-side containers | |
20’ & 40’ Hi-cube containers | ||
20’ & 40’ two pallet-wide containers | ||
Side-opening door containers |
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• | Operations — 49; | |
• | Sales — 36; | |
• | Production — 35; | |
• | Management — 20; | |
• | Finance — 19; and | |
• | Support — 8. |
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Nanton CIMC | 22 | % | ||
Triton Container | 18 | % | ||
Shanghai Baoshan | 12 | % | ||
GlobeStar Shipping | 6 | % | ||
TAL International Container | 6 | % | ||
Florens Container | 5 | % |
• | Lease fleet growth through rate increases, utilization and volume growth; | |
• | Potential to implement transport services to improve service and access pick up/ drop off benefits; | |
• | In-market acquisitions; | |
• | Geographic expansion — Regional and Asia/Pacific; | |
• | Complementary products; | |
• | Further penetration of mining industry; and |
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• | Further penetration of defence industries |
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FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF ROYAL WOLF
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12 Months | 6 Months | 12 Months | ||||||||||
Ended | Ended | Ended | ||||||||||
June 30, 2006 | June 30, 2005 | December 31, 2004 | ||||||||||
(In millions of Australian dollars) | ||||||||||||
Revenues: | ||||||||||||
Leasing | $ | 17.5 | $ | 7.7 | $ | 14.2 | ||||||
Sale: | ||||||||||||
New units | 6.8 | 0.4 | — | |||||||||
Rental equipment | 30.8 | 13.3 | 29.5 | |||||||||
Other | 12.3 | 5.5 | 8.5 | |||||||||
Total revenues | 67.4 | 26.9 | 52.2 | |||||||||
Cost of Revenues: | ||||||||||||
Leasing | 4.5 | 2.4 | 4.7 | |||||||||
Sale: | ||||||||||||
New units | 5.0 | 0.3 | — | |||||||||
Rental equipment | 23.5 | 9.6 | 20.0 | |||||||||
Other | 11.4 | 4.3 | 8.9 | |||||||||
Gross profit | 23.0 | 10.3 | 18.6 | |||||||||
Operating Expenses: | ||||||||||||
Selling, general and administrative | 20.3 | 9.3 | 14.9 | |||||||||
Financial expenses (net) | 3.5 | 1.0 | 3.1 | |||||||||
Other | — | 0.2 | 0.1 | |||||||||
Profit (loss) before income taxes | (0.8 | ) | (0.2 | ) | 0.5 | |||||||
Income tax (benefit) | (0.5 | ) | — | — | ||||||||
Net profit (loss) | $ | (0.3 | ) | $ | (0.2 | ) | $ | 0.5 | ||||
12 Months | 6 Months | 12 Months | ||||||||||
Ended | Ended | Ended | ||||||||||
June 30, 2006 | June 30, 2005 | December 31, 2004 | ||||||||||
Revenues: | ||||||||||||
Leasing | 25.9 | % | 28.6 | % | 27.2 | % | ||||||
Sales: | ||||||||||||
New units | 10.2 | % | 1.5 | % | 0.0 | % | ||||||
Rental equipment | 45.6 | % | 49.4 | % | 56.5 | % | ||||||
Delivery, installation and other | 18.3 | % | 20.5 | % | 16.3 | % | ||||||
Total revenues | 100.0 | % | 100.0 | % | 100.0 | % | ||||||
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12 Months | 6 Months | 12 Months | ||||||||||
Ended | Ended | Ended | ||||||||||
June 30, 2006 | June 30, 2005 | December 31, 2004 | ||||||||||
Cost of sales and services: | ||||||||||||
Leasing | 6.5 | % | 8.9 | % | 9.0 | % | ||||||
Sales: | ||||||||||||
New units | 7.4 | % | 1.1 | % | 0.0 | % | ||||||
Rental equipment | 34.8 | % | 35.7 | % | 38.3 | % | ||||||
Other | 17.1 | % | 16.0 | % | 17.1 | % | ||||||
Gross profit | 34.0 | % | 38.3 | % | 35.6 | % | ||||||
Selling, general and administrative expenses | 30.1 | % | 34.6 | % | 28.5 | % | ||||||
Financial expenses (net) | 5.2 | % | 3.8 | % | 5.9 | % | ||||||
Other operating expenses | 0.0 | % | 0.6 | % | 0.3 | % | ||||||
Profit (loss) before income taxes | (1.3 | )% | (0.7 | )% | 0.9 | % | ||||||
Income tax (benefit) | (0.8 | )% | (0.0 | )% | 0.0 | % | ||||||
Net profit (loss) | (0.5 | )% | (0.7 | )% | 0.9 | % | ||||||
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12 Months Ended | 12 Months Ended | |||||||||||
June 30, | June 30, | Increase | ||||||||||
2006 | 2005 | (Decrease) | ||||||||||
Manpower | $ | 9.9 | $ | 9.6 | $ | 0.3 | ||||||
Rent | 0.3 | 0.1 | 0.2 | |||||||||
CSC operating costs | 3.1 | 3.9 | (0.8 | ) | ||||||||
Business promotion | 1.1 | 0.7 | 0.4 | |||||||||
Travel and meals | 0.9 | 0.8 | 0.1 | |||||||||
IT and Telco | 0.6 | 0.5 | 0.1 | |||||||||
Professional costs | 1.0 | 1.0 | 0.0 | |||||||||
Other | 0.9 | 0.5 | 0.4 | |||||||||
Other depreciation and amortization | 2.5 | 1.5 | 1.0 | |||||||||
�� | ||||||||||||
$ | 20.3 | $ | 18.6 | $ | 1.7 | |||||||
Corporate Division — National Mining & Defense | 2 | |||
Customer Service Centers | ||||
NSW | 4 | (acquisitions) | ||
Victoria | 8 | (acquisitions) | ||
Western Australia | 5 | |||
Queensland | 9 | |||
Northern Territory | 2 | |||
30 | ||||
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12 Months Ended | 12 Months Ended | |||||||||||
June 30, | December 31, | Increase | ||||||||||
2006 | 2004 | (Decrease) | ||||||||||
Manpower | $ | 9.6 | $ | 7.5 | $ | 2.1 | ||||||
Rent | 0.1 | 0.1 | 0.0 | |||||||||
CSC operating costs | 3.9 | 2.6 | 1.3 | |||||||||
Business promotion | 0.7 | 0.5 | 0.2 | |||||||||
Travel and meals | 0.8 | 0.7 | 0.1 | |||||||||
IT and Telco | 0.5 | 0.7 | (0.2 | ) | ||||||||
Professional costs | 1.0 | 0.7 | 0.3 | |||||||||
Other | 0.5 | 0.0 | 0.5 | |||||||||
Other depreciation and amortization | 1.5 | 2.1 | (0.6 | ) | ||||||||
$ | 18.6 | $ | 14.9 | $ | 3.7 | |||||||
Corporate Division | ||||
Road & Rail | 3 | |||
Removalist | 1 | |||
National Mining & Defense | 2 | |||
6 | ||||
Customer Service Centers | ||||
NSW | 8 | |||
Victoria | 13 | |||
Western Australia | 3 | |||
South Australia | 1 | |||
Queensland | 5 | |||
Northern Territory | 5 | |||
35 | ||||
Operations | 2 | |||
43 | ||||
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• | The consolidated audited financial statements as soon as they are available, but not later than 120 days after the end of each financial year. | |
• | The consolidated annual projected balance sheet, profit and loss and cash flow forecast at the start of each financial year for the ensuing 12 months. |
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• | The annual certificate signed by two Directors certifying compliance with consolidated financial undertakings as soon as it is available, but not later than 120 days after the end of each financial year. | |
• | The consolidated CAPEX (Capital Expenditure) budget detailing non-discretionary and discretionary CAPEX at the start of each financial year for the ensuing 12 months. | |
• | Board approved business plan/budget for the ensuing 12 months, as soon as they are available but no later than 15 days before June 30 each year for consolidated entities. |
• | The consolidated management accounts (balance sheet and profit and loss accounts) within 30 days after the end of each financial quarter (i.e., March, June, September, December). | |
• | The consolidated aged debtor, creditor and stock listings to be provided as soon as they are available but not later than 30 days after the end of each financial quarter (i.e., March, June, September, and December). |
• | 1.75:1 as at March 31, 2006. | |
• | 2.00:1 as at June 30, 2006, and thereafter. |
• | 2.50:1 as at June 30, 2006, and thereafter. |
• | 01.75:1 as at March 31, 2006, and thereafter. |
• | Dividend payments are not to be made without prior written consent from ANZ. | |
• | All containers are to be restricted within the shores of Australia and the company’s Lease/Rental documentation should include this limitation. Any movement of containers outside the shores of Australia will require ANZ’s prior written consent. | |
• | Any additional off or on balance sheet liabilities are not to be made without prior written consent from ANZ. | |
• | Detailed schedule of containers with following information as soon as they are available, but no later than 30 days after the end of each financial month: |
• | Held for hire/lease outlining type, number, acquisition cost and book value. | |
• | Held for sale outlining type, number, acquisition cost and book value. |
• | A review of Royal Wolf’s inventory management systems to be conducted as at June 30 each year as part of the general audit. a copy of the report to be provided within 120 days. | |
• | Provision of loans or advances to directors, shareholders, related or associated companies is not to be made without prior written consent from ANZ. | |
• | Fair market value of orderly liquidated value of leased/hire containers is to be undertaken by a valuer appointed by and acceptable to Australia and New Zealand Banking Group as at June 30 of each year. |
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• | No interest or repayments to be paid to Equity Partners and ANZ Private Equity without written consent from ANZ. |
Quarter ended: | Covenant value: | |||
December 2005 | 0 | .85:1 | ||
March 2006 | 1 | .25:1 | ||
June 2006 | 1 | .5:1 | ||
September 2006, and thereafter | 2 | .00 |
• | Consolidated Reworked Adjusted Gearing Ratio: The consolidated reworked adjusted gearing ratio for each financial year will not, as at the compliance date, exceed 2.00:1 as at June 30, 2006: and 1.50:1 as at June 30, 2007. | |
• | Consolidated Debt Service Cover Ratio: The consolidated debt service cover ratio for each financial quarter on a rolling12-month basis, as shown below, will not, as at the compliance date, fall below: |
Quarter ended: | Covenant value: | |||
December 2005 | 1 | .75 | ||
March 2006, and thereafter | 2 | .00 |
• | Consolidated actual revenue at the end of each financial quarter (i.e., March, June, September and December) will be within 90% of the budgeted consolidated revenue. |
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Payment Due by Fiscal Year Ending June 30, | ||||||||||||||||||||
2008- | 2011- | |||||||||||||||||||
Contractual Obligations | Total | 2007 | 2010 | 2013 | 2014 and Thereafter | |||||||||||||||
(In thousands) | ||||||||||||||||||||
Facility leases | $ | 2,126 | $ | 2,126 | $ | — | $ | — | $ | — | ||||||||||
Finance leases/arrangements, including interest | 2,736 | 1,096 | 1,640 | — | — | |||||||||||||||
Bank indebtedness and term loans — principal | 23,930 | 5,831 | 18,099 | — | — | |||||||||||||||
Bank indebtedness and term loans — interest | 4,168 | 1,860 | 2,308 | — | — | |||||||||||||||
28,098 | 7,691 | 20,407 | — | — | ||||||||||||||||
Total | $ | 32,960 | $ | 10,913 | $ | 22,047 | $ | — | $ | — | ||||||||||
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• | persuasive evidence of an arrangement exists; | |
• | delivery has occurred; | |
• | the seller’s price to the customer is fixed or determinable; and | |
• | collectability is reasonable assured. |
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2005 | 2006 | |||
Property, plant and equipment | ||||
Plant and equipment | 3 - 10 years | 3 - 10 years | ||
Motor vehicles | 3 - 10 years | 3 - 10 years | ||
Furniture and fittings | 5 - 10 years | 5 - 10 years | ||
Container hire fleet | ||||
Containers for hire | 10 years (20% residual) | 10 - 25 years (20% residual) | ||
Leased containers for hire (used) | 10 years (20% residual) | 10 - 25 years (20% residual) | ||
Leased containers for hire (new) | 25 years (20% residual) | 10 - 30 years (20-30% residual) |
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• | AASB 7Financial instruments: Disclosure(August 2005) replacing the presentation requirements of financial instruments in AASB 132. AASB 7 is applicable for annual reporting periods beginning on or after January 1, 2007; | |
• | AASB 2005-9Amendments to Australian Accounting Standards (September 2005) requires that liabilities arising from the issue of financial guarantee contracts are recognized in the balance sheet. AASB 2005-9 is applicable for annual reporting periods beginning on or after January 1, 2006; | |
• | AASB 2005-10Amendments to Australian Accounting Standards (September 2005) makes consequential amendments to AASB 132Financial Instruments: Disclosures and Presentation, AASB 101Presentation of Financial Statements, AASB 114Segment Reporting, AASB 117Leases, AASB 139Financial Instruments: Recognition and Measurement, AASB 1First-time Adoption of Australian Equivalents to International Financial Reporting Standards, arising from the release of AASB 7. AASB 2005-10 is applicable for annual reporting periods beginning on or after January 1, 2007. |
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Name | Age | Position | ||||
Ronald F. Valenta | 48 | Chief Executive Officer, Secretary and Director | ||||
John O. Johnson | 45 | Chief Operating Officer | ||||
Charles E. Barrantes | 54 | Executive Vice President and Chief Financial Officer | ||||
Marc Perez | 42 | Controller | ||||
Robert Allan | 50 | Chief Executive Officer, Royal Wolf Trading Australia Pty Limited | ||||
Lawrence Glascott | 72 | Chairman of the Board of Directors | ||||
David M. Connell | 62 | Director | ||||
Manuel Marrero | 49 | Director | ||||
James B. Roszak | 65 | Director |
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• | Neither our directors nor Mr. Valenta or Mr. Johnson is required to commit their full time to our affairs and, accordingly, they may have conflicts of interest in allocating their time among various business activities. | |
• | In the course of their other business activities, our officers and directors may become aware of investment and business opportunities that may be appropriate for presentation to us and the other entities with which they are affiliated. Our management may have conflicts of interest in determining to which entity a particular business opportunity should be presented. | |
• | Our officers and directors may in the future become affiliated with entities, including other blank check companies, engaged in business activities similar to those in which our company intends to engage. | |
• | Ronald F. Valenta, our Chief Executive Officer and Secretary, is the non-executive Chairman of the Board of Directors of Mobile Services Group, Inc. and Chairman of the Board of Directors of Port-O-Shred LLC and the managing member of Portosan, LLC. While none of our other existing stockholders has any affiliation with a specialty finance company, they may have such an affiliation in the future. |
• | As an inducement to Bison-GE and the management shareholders to enter into the acquisition agreement, Mr. Valenta has entered into a backup purchase agreement with Bison-GE and the management shareholders under which he agrees that, if the Royal Wolf acquisition is not approved at the special meeting, or otherwise is not completed by April 3, 2008, he will purchase from Bison-GE and the management shareholders all of the RWA shares at a purchase price equivalent to the purchase price payable by us under the acquisition agreement. The terms of the backup purchase agreement were determined by arm’s-length negotiations among Mr. Valenta, Bison-GE and the management shareholders. Mr. Valenta will not be entitled to a fee or other compensation for the agreeing to the backup purchase agreement. Mr. Valenta entered into the backup purchase agreement as an accommodation to us in order to facilitate our acquisition of Royal Wolf, and we believe that it presents no current conflict of interest on Mr. Valenta’s part. In the event, however, that the Royal Wolf acquisition is not completed and Mr. Valenta acquires Royal Wolf pursuant to the backup purchase agreement, it is possible that Royal Wolf could compete in Australia or other geographic markets with another specialty finance company that we might acquire pursuant to a possible alternative initial business combination. |
• | the corporation could financially undertake the opportunity; | |
• | the opportunity is within the corporation’s line of business; and | |
• | it would not be fair to the corporation and its stockholders for the opportunity not to be brought to the attention of the corporation. |
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Name | Title | Year | Salary | Bonus | ||||||||||
Charles E. Barrantes | Chief Financial Officer | 2006 | (1) | $ | 65,482 | (2) | $ | — | ||||||
Robert Allan | Chief Executive Officer, | 2006 | $ | 177,568 | $ | 7,486 | ||||||||
Royal Wolf Trading Australia Pty | 2005 | $ | 152,188 | $ | 19,974 | |||||||||
Limited | 2004 | (3) | $ | 6,859 | $ | — | ||||||||
Peter McCann | Chief Financial Officer, Royal Wolf | 2006 | $ | 204,880 | $ | 26,540 | ||||||||
Trading Australia Pty Limited | 2005 | $ | 197,000 | $ | 7,486 | |||||||||
2004 | (4) | $ | 24,750 | $ | — | |||||||||
James Warren | Chief Operating Officer, Royal Wolf | 2006 | $ | 191,484 | $ | 39,400 | ||||||||
Trading Australia Pty Limited | 2006 | $ | 185,180 | $ | 106,380 | |||||||||
2004 | $ | 177,300 | $ | 66,682 |
(1) | Mr. Barrantes joined us in September 2006. |
(2) | Includes $3,361 of reimbursed medical premiums. |
(3) | Mr. Allan joined Royal Wolf in April 2004. |
(4) | Mr. McCann joined Royal Wolf in May 2004. |
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• | Each person known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock; | |
• | Each of our current executive officers and directors; and | |
• | All of our current executive officers and directors as a group; and |
Number | Percent | |||||||||||
Name | of Shares | of Class | ||||||||||
Ronald F. Valenta(2) | 1,410,000 | 13.4 | % | |||||||||
John O. Johnson(3) | 356,250 | 3.4 | % | |||||||||
James B. Roszak | 22,500 | (* | ) | |||||||||
Lawrence Glascott | 22,500 | (* | ) | |||||||||
Manuel Marrero | 22,500 | (* | ) | |||||||||
David M. Connell | 22,500 | (* | ) | |||||||||
Marc Perez | 18,750 | (* | ) | |||||||||
Fir Tree, Inc.(4) | 898,525 | 8.6 | % | |||||||||
535 Fifth Avenue, 31st Floor New York, NY 10017 | ||||||||||||
Gilder, Gagnon, Howe & Co. LLC(5) | 1,076,540 | 10.3 | % | |||||||||
1775 Broadway, 25th Floor | ||||||||||||
New York, New York 10019 | ||||||||||||
The Baupost Group, L.L.C.(6) | 538,700 | 5.1 | % | |||||||||
10 St. James Avenue, Suite 2000 | ||||||||||||
Boston, Massachusetts 02116 | ||||||||||||
Olawalu Holdings, LLC(7) | 642,000 | 6.11 | % | |||||||||
2863 S. Western Avenue | ||||||||||||
Palos Verdes, California 90275 | ||||||||||||
All officers and directors as a group (eight persons)(8) | 1,875,000 | 17.9 | % |
(1) | Based upon 10,500,000 shares of our common stock outstanding on April 20, 2007. |
(2) | Mr. Valenta’s business address is c/o General Finance Corporation, 260 South Los Robles, Suite 217, Pasadena, California 91101. The shares shown exclude the shares referred to in note (7), below, as well as 1,168,466 shares subject to our warrants held by Mr. Valenta. |
(3) | The shares shown exclude 309,367 shares subject to our warrants held by Mr. Johnson. |
(4) | Fir Tree, Inc. is the investment manager of both Fir Tree Recovery Master Fund, L.P., a Cayman Islands exempted limited partnership, and Sapling, LLC, a Delaware limited liability company. Fir Tree Recovery may direct the vote and disposition of 271,894 of the shares shown. Fir Tree Value Master Fund, LP, a Cayman Islands exempted limited partnership, as the sole member of Sapling, LLC, may direct the vote and disposition of the 626,631 of the shares shown. Information is based upon a Schedule 13G filed with respect to our company with the Securities Exchange Commission on April 11, 2006. Based upon a review of other filings with the Securities and Exchange Commission, we have reason to believe that Jeffrey Tannenbaum, the President of Fir Tree, Inc., may be deemed to be a control person of Sapling, LLC and Fir Tree Recovery Master Fund, L.P. |
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(5) | Information is based upon a Schedule 13G filed with respect to our company filed with the Securities and Exchange Commission on March 12, 2007. Gilder, Gagnon, Howe & Co. LLC is a New York limited liability and broker or dealer registered under the Securities Exchange Act of 1934. The shares shown include 23,720 shares as to which Gilder, Gagnon, Howe & Co. LLC has sole voting power and 1,076,540 shares as to which it shares voting and investment power. Of these 1,076,540 shares, 930,380 shares are held in customer accounts under which partners or employees of Gilder, Gagnon, Howe & Co. LLC have discretionary authority to dispose or direct the disposition of the shares, 102,440 shares are held in accounts of its partners and 33,720 shares are held in its profit-sharing plan. |
(6) | Information is based upon a Schedule 13G with respect to our company filed with the Securities and Exchange Commission on February 13, 2007. The Baupost Group, L.L.C. is a registered investment advisor, of which SAK Corporation, a Massachusetts corporation, is the Manager. Seth A. Klarman is the sole director of SAK Corporation and a control person of The Baupost Group, L.L.C., and as such may be deemed to beneficially own the shares shown. The shares shown include shares purchased on behalf of various investment limited partnerships. |
(7) | Information is based upon a Schedule 13G with respect to our company filed on February 27, 2007 with the Securities and Exchange Commission. Olawalu Holdings, LLC, or Olawalu, is a Hawaiian limited liability company, of which Mr. Rick Pielago is the manager. Olawalu shares voting and investment power as to all of the shares shown with Lighthouse Capital Insurance Company, a Cayman Islands exempted limited company, and the Ronald Valenta Irrevocable Life Insurance Trust No. 1, a California trust, of which Mr. Pielago is trustee. The Ronald Valenta Irrevocable Life Insurance Trust No. 1 is an irrevocable family trust established by Mr. Valenta in December 1999 for the benefit of his wife at the time, any future wife, and their descendants. Mr. Valenta, himself, is not a beneficiary of the Trust, and has no voting or investment power, or any other legal authority, with respect to the shares shown. Mr. Valenta disclaims beneficial ownership of our shares held by the Trust. |
(8) | Excludes Robert Allan, the Chief Executive Officer of Royal Wolf, who will be deemed to be one of our executive officers after the acquisition, and Peter McCann and James Warren, the Chief Financial Officer and the Chief Operating Officer, respectively, of Royal Wolf, who may be deemed to be key employees following the acquisition. Mr. Allan owns 400 shares of our common stock. None of the other individuals owns beneficially any shares of our common stock. The shares shown exclude a total of 1,477,833 shares subject to our warrants held by our directors and executive officers. |
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John O. Johnson | OR | MacKenzie Partners, Inc. | ||
Chief Operating Officer | 105 Madison Avenue | |||
General Finance Corporation | New York, New York 10016 | |||
260 South Robles, Suite 217 | Telephone: (800)322-2885 | |||
Pasadena, California 91101 | ||||
Telephone:(626) 584-9722 |
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Page | ||||
RWA HOLDINGS PTY LIMITED | ||||
As of and for the year ended June 30, 2006, the six months ended June 30, 2005, and the year ended December 31, 2004: | ||||
F-2 | ||||
F-3 | ||||
F-4 | ||||
F-5 | ||||
F-6 | ||||
F-7 | ||||
ROYAL WOLF TRADING AUSTRALIA PTY LIMITED | ||||
As of and for the year ended December 31, 2003: | ||||
F-58 | ||||
F-59 | ||||
F-60 | ||||
F-61 | ||||
F-62 | ||||
AUSTRALIAN CONTAINER NETWORK PTY LTD AS NOMINEE FOR ACN PARTNERSHIP | ||||
As of and for the year ended June 30, 2005 and the nine months ended March 31, 2006 and 2005 (unaudited): | ||||
F-81 | ||||
F-82 | ||||
F-83 | ||||
F-85 |
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For the year ended 30 June 2006
Restated | Restated | Restated | ||||||||||||||
30 June | 30 June | 31 December | ||||||||||||||
2006 | 2005 | 2004 | ||||||||||||||
Note | 12 Months | 6 Months | 12 Months | |||||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||||||
Revenue | ||||||||||||||||
Sale and modification of containers | 46,097 | 17,534 | 35,463 | |||||||||||||
Hire of containers | 21,290 | 9,339 | 16,756 | |||||||||||||
Total revenue | 67,387 | 26,873 | 52,219 | |||||||||||||
Other income | 3 | 35 | 18 | 31 | ||||||||||||
Changes in inventories of finished goods and WIP | (3,475 | ) | (1,936 | ) | 1,740 | |||||||||||
Purchases of finished goods and consumables used | (40,243 | ) | (14,687 | ) | (34,437 | ) | ||||||||||
Employee benefits expense | (10,157 | ) | (4,794 | ) | (7,525 | ) | ||||||||||
Depreciation and amortisation expense | (4,480 | ) | (2,041 | ) | (3,943 | ) | ||||||||||
Other expenses | 4 | (6,411 | ) | (2,820 | ) | (4,568 | ) | |||||||||
Results from operating activities | 2,656 | 613 | 3,517 | |||||||||||||
Financial income | 6 | 552 | 429 | 118 | ||||||||||||
Financial expenses | 6 | (4,064 | ) | (1,457 | ) | (3,252 | ) | |||||||||
Net financing costs | (3,512 | ) | (1,028 | ) | (3,134 | ) | ||||||||||
Share of profit of associate | 11 | — | 172 | 92 | ||||||||||||
Profit/(loss) before tax | (856 | ) | (243 | ) | 475 | |||||||||||
Income tax benefit | 7 | 525 | 30 | 4 | ||||||||||||
Profit/(loss) after tax | (331 | ) | (213 | ) | 479 | |||||||||||
Attributable to: | ||||||||||||||||
Equity holders of the parent | (331 | ) | (213 | ) | 479 | |||||||||||
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Restated | Restated | Restated | ||||||||||||||
30 June | 30 June | 31 December | ||||||||||||||
2006 | 2005 | 2004 | ||||||||||||||
Note | 12 Months | 6 Months | 12 Months | |||||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||||||
Net income/(loss) recognised directly in equity | — | — | — | |||||||||||||
Profit/(loss) for the period | (331 | ) | (213 | ) | 479 | |||||||||||
Total recognised income and expense for the period | 19 | (331 | ) | (213 | ) | 479 | ||||||||||
Attributable to: | ||||||||||||||||
Equity holders of the parent | (331 | ) | (213 | ) | 479 | |||||||||||
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As at 30 June 2006
Restated | Restated | Restated | ||||||||||||||
Note | 30 June 2006 | 30 June 2005 | 31 December 2004 | |||||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||||||
ASSETS | ||||||||||||||||
Cash and cash equivalents | 8 | 777 | 695 | 3 | ||||||||||||
Trade and other receivables | 9 | 10,206 | 7,876 | 7,024 | ||||||||||||
Inventories | 10 | 7,498 | 4,023 | 2,140 | ||||||||||||
Total current assets | 18,481 | 12,594 | 9,167 | |||||||||||||
Receivables | 9 | 775 | 839 | 1,194 | ||||||||||||
Investments accounted for using the equity method | 11 | — | 427 | 255 | ||||||||||||
Property, plant and equipment | 12 | 3,599 | 3,306 | 1,812 | ||||||||||||
Container hire fleet | 13 | 38,491 | 25,779 | 22,447 | ||||||||||||
Intangible assets | 14 | 5,060 | 4,207 | 4,515 | ||||||||||||
Total non-current assets | 47,925 | 34,558 | 30,223 | |||||||||||||
Total assets | 66,406 | 47,152 | 39,390 | |||||||||||||
LIABILITIES | ||||||||||||||||
Trade and other payables | 15 | 12,509 | 8,228 | 11,530 | ||||||||||||
Interest-bearing loans and borrowings | 16 | 8,939 | 2,778 | 1,425 | ||||||||||||
Current tax liability | — | — | 791 | |||||||||||||
Employee benefits | 17 | 962 | 801 | 444 | ||||||||||||
Provisions | 18 | 300 | — | — | ||||||||||||
Total current liabilities | 22,710 | 11,807 | 14,190 | |||||||||||||
Non-current liabilities | ||||||||||||||||
Interest bearing loans and borrowings | 16 | 37,194 | 30,175 | 20,614 | ||||||||||||
Deferred tax liabilities | 7 | 824 | 119 | 119 | ||||||||||||
Employee benefits | 17 | 567 | 227 | 308 | ||||||||||||
Provisions | 18 | 282 | 8 | 8 | ||||||||||||
Total non-current liabilities | 38,867 | 30,529 | 21,049 | |||||||||||||
Total liabilities | 61,577 | 42,336 | 35,239 | |||||||||||||
Net assets | 4,829 | 4,816 | 4,151 | |||||||||||||
Equity | ||||||||||||||||
Issued capital | 19 | 4,550 | 4,550 | 3,672 | ||||||||||||
Retained earnings/(accumulated losses) | 19 | (65 | ) | 266 | 479 | |||||||||||
Reserves | 19 | 344 | — | — | ||||||||||||
Total equity attributable to equity holders of the parent | 4,829 | 4,816 | 4,151 | |||||||||||||
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Restated | Restated | Restated | ||||||||||||||
30 June 2006 | 30 June 2005 | 31 December 2004 | ||||||||||||||
Note | 12 Months | 6 Months | 12 Months | |||||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||||||
Cash flows from operating activities | ||||||||||||||||
Cash receipts from customers | 71,375 | 29,238 | 56,324 | |||||||||||||
Cash paid to suppliers and employees | (54,343 | ) | (25,334 | ) | (49,584 | ) | ||||||||||
Cash generated from operations | 17,032 | 3,904 | 6,740 | |||||||||||||
Interest paid | (3,041 | ) | (1,270 | ) | (1,721 | ) | ||||||||||
Income taxes received/(paid) | — | (759 | ) | 781 | ||||||||||||
Net cash from operating activities | 25 | 13,991 | 1,875 | 5,800 | ||||||||||||
Cash flows from investing activities | ||||||||||||||||
Proceeds from sale of property, plant and equipment | 70 | 24 | 74 | |||||||||||||
Interest received | 209 | 104 | 118 | |||||||||||||
Acquisition of subsidiary, net of cash acquired | 24 | (6,490 | ) | — | — | |||||||||||
Acquisition of property, plant and equipment | 12 | (1,119 | ) | (1,937 | ) | (1,254 | ) | |||||||||
Acquisition of container hire fleet | 13 | (18,073 | ) | (7,725 | ) | (12,003 | ) | |||||||||
Acquisition of intangible assets | 14 | (496 | ) | (25 | ) | (70 | ) | |||||||||
Payment of deferred purchase consideration | — | (3,500 | ) | — | ||||||||||||
Net cash from investing activities | (25,899 | ) | (13,059 | ) | (13,135 | ) | ||||||||||
Cash flows from financing activities | ||||||||||||||||
Payment of finance lease liabilities | (756 | ) | (385 | ) | (1,910 | ) | ||||||||||
Proceeds from borrowings | 24,736 | 12,987 | 19,682 | |||||||||||||
Repayment of borrowings | (14,116 | ) | (1,071 | ) | (12,755 | ) | ||||||||||
Proceeds from calls made on shares | — | 878 | — | |||||||||||||
Net cash from financing activities | 9,864 | 12,409 | 5,017 | |||||||||||||
Net increase / (decrease) in cash and cash equivalents | (2,044 | ) | 1,225 | (2,318 | ) | |||||||||||
Cash and cash equivalents at beginning of period | 695 | (530 | ) | 1,788 | ||||||||||||
Cash and cash equivalents at 30 June | 8 | (1,349 | ) | 695 | (530 | ) | ||||||||||
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1. | Significant accounting policies |
(a) | Statement of compliance |
(b) | Basis of preparation |
• | AASB 7Financial instruments: Disclosure(August 2005) replacing the presentation requirements of financial instruments in AASB 132. AASB 7 is applicable for annual reporting periods beginning on or after 1 January 2007; | |
• | AASB 2005-9Amendments to Australian Accounting Standards(September 2005) requires that liabilities arising from the issue of financial guarantee contracts are recognised in the balance sheet. AASB 2005-9 is applicable for annual reporting periods beginning on or after 1 January 2006; | |
• | AASB 2005-10Amendments to Australian Accounting Standards(September 2005) makes consequential amendments to AASB 132Financial Instruments: Disclosures and Presentation, AASB 101Presentation of Financial Statements, AASB 114Segment Reporting, AASB 117Leases, AASB 139Financial Instruments: Recognition and Measurement, AASB 1First-time Adoption of Australian Equivalents to International Financial Reporting Standards, arising from the release of AASB 7. AASB 2005-10 is applicable for annual reporting periods beginning on or after 1 January 2007. |
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(c) | Basis of consolidation |
F-8
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(d) | Foreign currency transactions |
(e) | Derivative financial instruments |
F-9
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(f) | Property, plant and equipment |
F-10
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2004-2005 | 2006 | |||
Property, plant and equipment | ||||
Plant and equipment | 3 - 10 years | 3 - 10 years | ||
Motor vehicles | 3 - 10 years | 3 - 10 years | ||
Furniture and fittings | 5 - 10 years | 5 - 10 years | ||
Container hire fleet | ||||
Containers for hire | 10 years (20% residual) | 10 - 25 years (20% residual) | ||
Leased containers for hire (used) | 10 years (20% residual) | 10 - 25 years (20% residual) | ||
Leased containers for hire (new) | 25 years (20% residual) | 10 - 30 years (20-30% residual) |
(g) | Container hire fleet |
(h) | Intangible assets |
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• Goodwill | indefinite | |
• Software | 3 years | |
• Development assets | 5 years or the products expected life cycle, as appropriate |
(i) | Trade and other receivables |
(j) | Inventories |
(k) | Cash and cash equivalents |
F-12
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(l) | Impairment |
(m) | Interest bearing borrowings |
F-13
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(n) | Employee benefits |
(o) | Provisions |
F-14
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(p) | Trade and other payables |
(q) | Revenue |
• | persuasive evidence of an arrangement exists; | |
• | delivery has occurred; | |
• | the seller’s price to the customer is fixed or determinable; and | |
• | collectability is reasonable assured. |
(r) | Net financing costs |
F-15
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(s) | Income tax |
F-16
Table of Contents
(t) | Goods and services tax |
(u) | Segment reporting |
(v) | Accounting estimates and judgments |
F-17
Table of Contents
(w) | Correction of prior period errors |
F-18
Table of Contents
Restated | ||||||||||||||||
30 June | 30 June | |||||||||||||||
Note | 2006 | Restatement | 2006 | |||||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||||||
Current assets | 18,481 | — | 18,481 | |||||||||||||
Other non-current assets | 42,865 | — | 42,865 | |||||||||||||
Deferred tax assets | 127 | (127 | ) | — | ||||||||||||
Intangible assets | 7,246 | (2,186 | ) | 5,060 | ||||||||||||
Total non current assets | 50,238 | (2,313 | ) | 47,925 | ||||||||||||
Total assets | 68,719 | (2,313 | ) | 66,406 | ||||||||||||
Total current liabilities | 22,710 | — | 22,710 | |||||||||||||
Deferred tax liability | — | 824 | 824 | |||||||||||||
Other non-current liabilities | 38,043 | — | 38,043 | |||||||||||||
Total non-current liabilities | 38,043 | 824 | 38,867 | |||||||||||||
Total liabilities | 60,753 | 824 | 61,577 | |||||||||||||
Net assets | 7,966 | (3,137 | ) | 4,829 | ||||||||||||
Total equity | 7,966 | (3,137 | ) | 4,829 | ||||||||||||
Restated | ||||||||||||||||
30 June | 30 June | |||||||||||||||
Note | 2006 | Restatement | 2006 | |||||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||||||
Results from operating activities | 3,563 | (907 | ) | 2,656 | ||||||||||||
Net financing costs | (3,512 | ) | — | (3,512 | ) | |||||||||||
Profit/(loss) before tax | 51 | (907 | ) | (856 | ) | |||||||||||
Income tax benefit | 2,571 | (2,046 | ) | 525 | ||||||||||||
Profit/(loss) after tax | 2,622 | (2,953 | ) | (331 | ) | |||||||||||
F-19
Table of Contents
Restated | ||||||||||||||||
30 June | 30 June | |||||||||||||||
Note | 2005 | Restatement | 2005 | |||||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||||||
Current assets | 12,594 | — | 12,594 | |||||||||||||
Other non-current assets | 30,351 | — | 30,351 | |||||||||||||
Deferred tax assets | — | — | — | |||||||||||||
Intangible assets | 5,486 | (1,279 | ) | 4,207 | ||||||||||||
Total non current assets | 35,837 | (1,279 | ) | 34,558 | ||||||||||||
Total assets | 48,431 | (1,279 | ) | 47,152 | ||||||||||||
Total current liabilities | 11,807 | — | 11,807 | |||||||||||||
Deferred tax liability | 1,214 | (1,095 | ) | 119 | ||||||||||||
Other non-current liabilities | 30,410 | — | 30,410 | |||||||||||||
Total non-current liabilities | 31,624 | (1,095 | ) | 30,529 | ||||||||||||
Total liabilities | 43,431 | (1,095 | ) | 42,336 | ||||||||||||
Net assets | 5,000 | (184 | ) | 4,816 | ||||||||||||
Total equity | 5,000 | (184 | ) | 4,816 | ||||||||||||
Restated | ||||||||||||||||
30 June | 30 June | |||||||||||||||
Note | 2005 | Restatement | 2005 | |||||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||||||
Results from operating activities | 740 | (127 | ) | 613 | ||||||||||||
Net financing costs | (1,028 | ) | — | (1,028 | ) | |||||||||||
Share of profit of associate | 172 | — | 172 | |||||||||||||
Loss before tax | (116 | ) | (127 | ) | (243 | ) | ||||||||||
Income tax benefit | 59 | (29 | ) | 30 | ||||||||||||
Loss after tax | (57 | ) | (156 | ) | (213 | ) | ||||||||||
F-20
Table of Contents
Restated | ||||||||||||||||
31 December | 31 December | |||||||||||||||
Note | 2004 | Restatement | 2004 | |||||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||||||
Current assets | 9,167 | — | 9,167 | |||||||||||||
Other non-current assets | 25,708 | — | 25,708 | |||||||||||||
Deferred tax assets | 625 | (625 | ) | — | ||||||||||||
Intangible assets | 5,667 | (1,152 | ) | 4,515 | ||||||||||||
Total non current assets | 32,000 | (1,777 | ) | 30,223 | ||||||||||||
Total assets | 41,167 | (1,777 | ) | 39,390 | ||||||||||||
Total current liabilities | 14,190 | — | 14,190 | |||||||||||||
Deferred tax liability | 1,868 | (1,749 | ) | 119 | ||||||||||||
Other non-current liabilities | 20,894 | 36 | 20,930 | |||||||||||||
Total non-current liabilities | 22,762 | (1,713 | ) | 21,049 | ||||||||||||
Total liabilities | 36,952 | (1,713 | ) | 35,239 | ||||||||||||
Net assets | 4,215 | (64 | ) | 4,151 | ||||||||||||
Total equity | 4,215 | (64 | ) | 4,151 | ||||||||||||
Restated | ||||||||||||||||
31 December | 31 December | |||||||||||||||
Note | 2004 | Restatement | 2004 | |||||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||||||
Results from operating activities | 4,064 | (547 | ) | 3,517 | ||||||||||||
Net financing costs | (3,134 | ) | (3,134 | ) | ||||||||||||
Share of profit of associate | 92 | — | 92 | |||||||||||||
Profit before tax | 1,022 | (547 | ) | 475 | ||||||||||||
Income tax benefit/(expense) | (515 | ) | 519 | 4 | ||||||||||||
Profit after tax | 507 | (28 | ) | 479 | ||||||||||||
2. | Segment information |
3. | Other income |
Restated | Restated | Restated | ||||||||||
30 June | 30 June | 31 December | ||||||||||
2006 | 2005 | 2004 | ||||||||||
12 Months | 6 Months | 12 Months | ||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||
Net gain on disposal of property, plant and equipment | 28 | 17 | 28 | |||||||||
Bad debts recovered | 7 | 1 | 3 | |||||||||
35 | 18 | 31 | ||||||||||
F-21
Table of Contents
4. | Expenses |
Restated | Restated | Restated | ||||||||||
30 June | 30 June | 31 December | ||||||||||
2006 | 2005 | 2004 | ||||||||||
12 Months | 6 Months | 12 Months | ||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||
Cost of sales | 43,718 | 16,623 | 32,697 | |||||||||
Other expenses | ||||||||||||
Operating lease payments | 1,174 | 464 | 793 | |||||||||
Sundry occupancy costs | 143 | 48 | 77 | |||||||||
Business promotion expenses | 1,148 | 329 | 495 | |||||||||
Travel & accommodation | 859 | 416 | 676 | |||||||||
IT & telecommunications | 559 | 269 | 662 | |||||||||
Bad & doubtful debts | 234 | 91 | 55 | |||||||||
Office supplies | 435 | 208 | 321 | |||||||||
Inventory write-down | 146 | 97 | 34 | |||||||||
Other | 1,713 | 898 | 1,455 | |||||||||
�� | 6,411 | 2,820 | 4,568 | |||||||||
5. | Auditors’ remuneration |
30 June | 30 June | 31 December | ||||||||||
2006 | 2005 | 2004 | ||||||||||
12 Months | 6 Months | 12 Months | ||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||
Audit services | ||||||||||||
Auditors of the Company | ||||||||||||
KPMG Australia | ||||||||||||
Audit and review of financial reports | 99 | 95 | 73 | |||||||||
Other services | ||||||||||||
Auditors of the Company | ||||||||||||
KPMG Australia | ||||||||||||
Other assurance services | — | 18 | — | |||||||||
Taxation services | 20 | — | 35 | |||||||||
20 | 18 | 35 | ||||||||||
F-22
Table of Contents
6. | Net financing costs |
Restated | Restated | Restated | ||||||||||
30 June | 30 June | 31 December | ||||||||||
2006 | 2005 | 2004 | ||||||||||
12 Months | 6 Months | 12 Months | ||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||
Interest income | 209 | 104 | 118 | |||||||||
Net gain on remeasurement of interest rate swap at fair value through profit or loss | 293 | — | — | |||||||||
Net foreign exchange gain | 50 | 325 | — | |||||||||
Financial income | 552 | 429 | 118 | |||||||||
Interest expense | 4,034 | 1,296 | 2,862 | |||||||||
Net foreign exchange loss | — | — | 390 | |||||||||
Net loss on remeasurement of forward exchange contracts at fair value through profit or loss | 30 | — | — | |||||||||
Net loss on remeasurement of interest rate swap at fair value through profit or loss | — | 161 | — | |||||||||
Financial expenses | 4,064 | 1,457 | 3,252 | |||||||||
Net financing costs | 3,512 | 1,028 | 3,134 | |||||||||
7. | Income tax expense |
Restated | Restated | Restated | ||||||||||
30 June | 30 June | 31 December | ||||||||||
2006 | 2005 | 2004 | ||||||||||
Recognised in the Income Statement | 12 Months | 6 Months | 12 Months | |||||||||
A$’000 | A$’000 | A$’000 | ||||||||||
Current tax benefit | ||||||||||||
Current year | — | (30 | ) | (4 | ) | |||||||
Adjustments for prior years | — | — | — | |||||||||
— | (30 | ) | (4 | ) | ||||||||
Deferred tax expense | ||||||||||||
Origination and reversal of temporary differences | 382 | 127 | 547 | |||||||||
Benefit from utilisation of unrecognised deferred tax assets | (907 | ) | (127 | ) | (547 | ) | ||||||
(525 | ) | — | — | |||||||||
Total income tax benefit in income statement | (525 | ) | (30 | ) | (4 | ) | ||||||
Numerical reconciliation between tax expense and pre-tax net profit | ||||||||||||
Profit / (loss) before tax | (856 | ) | (243 | ) | 479 | |||||||
Income tax using the domestic corporation tax rate of 30% | (256 | ) | (73 | ) | 144 | |||||||
Increase in income tax expense due to: | ||||||||||||
Goodwill write off arising from benefit from deferred tax assets not recognized at date of previous business combinations | 272 | 38 | 164 | |||||||||
Non-deductible expenses | 366 | 132 | 235 | |||||||||
Decrease in income tax expense due to: | ||||||||||||
Benefit from utilisation of unrecognised deferred tax asset | (907 | ) | (127 | ) | (547 | ) | ||||||
Income tax benefit on pre-tax net profit | (525 | ) | (30 | ) | (4 | ) | ||||||
F-23
Table of Contents
Assets | Liabilities | Net | ||||||||||||||||||||||||||||||||||
Restated | Restated | Restated | Restated | Restated | Restated | Restated | Restated | Restated | ||||||||||||||||||||||||||||
2006 | 2005 | 2004 | 2006 | 2005 | 2004 | 2006 | 2005 | 2004 | ||||||||||||||||||||||||||||
A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | ||||||||||||||||||||||||||||
Property, plant and equipment | — | — | (1,997 | ) | (572 | ) | (321 | ) | (1,997 | ) | (572 | ) | (321 | ) | ||||||||||||||||||||||
Interest bearing loans and borrowings | 125 | 48 | — | — | — | — | 125 | 48 | — | |||||||||||||||||||||||||||
Employee benefits | 368 | 276 | 214 | — | — | — | 368 | 276 | 214 | |||||||||||||||||||||||||||
Other items | 65 | 270 | 410 | (119 | ) | (119 | ) | (119 | ) | (54 | ) | 151 | 291 | |||||||||||||||||||||||
Tax value of loss carry-forwards | 734 | 885 | 731 | — | — | — | 734 | 885 | 731 | |||||||||||||||||||||||||||
Deferred tax valuation allowance | — | (907 | ) | (1,034 | ) | — | — | — | — | (907 | ) | (1,034 | ) | |||||||||||||||||||||||
Tax assets / (liabilities) | 1,292 | 572 | 321 | (2,116 | ) | (691 | ) | (440 | ) | (824 | ) | (119 | ) | (119 | ) | |||||||||||||||||||||
Restated | Restated | Restated | ||||||||||
30 June | 30 June | 31 December | ||||||||||
2006 | 2005 | 2004 | ||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||
Tax losses | — | 885 | 731 | |||||||||
Temporary differences | — | 22 | 303 | |||||||||
— | 907 | 1,034 | ||||||||||
8. | Cash and cash equivalents |
Restated | Restated | Restated | ||||||||||||||
30 June | 30 June | 31 December | ||||||||||||||
Note | 2006 | 2005 | 2004 | |||||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||||||
Bank balances | 20 | 777 | 695 | 3 | ||||||||||||
Cash and cash equivalents | 777 | 695 | 3 | |||||||||||||
Bank overdrafts repayable on demand | 16 | (2,126 | ) | — | (533 | ) | ||||||||||
Cash and cash equivalents in the statement of cash flows | (1,349 | ) | 695 | (530 | ) | |||||||||||
F-24
Table of Contents
9. | Trade and other receivables |
Restated | Restated | Restated | ||||||||||||||
30 June | 30 June | 31 December | ||||||||||||||
Note | 2006 | 2005 | 2004 | |||||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||||||
Current | ||||||||||||||||
Trade receivables | 9,298 | 6,637 | 6,136 | |||||||||||||
Less: Impairment losses | (177 | ) | (102 | ) | (85 | ) | ||||||||||
9,121 | 6,535 | 6,051 | ||||||||||||||
Receivables from related parties | — | 74 | 89 | |||||||||||||
Lease receivable | 20 | 335 | 180 | 165 | ||||||||||||
Loan to related entity | — | 260 | — | |||||||||||||
Fair value derivatives | 132 | — | — | |||||||||||||
Other receivables and prepayments | 618 | 827 | 719 | |||||||||||||
10,206 | 7,876 | 7,024 | ||||||||||||||
Non-current | ||||||||||||||||
Lease receivable | 20 | 775 | 839 | 934 | ||||||||||||
Loan to related entity | — | — | 260 | |||||||||||||
775 | 839 | 1,194 | ||||||||||||||
10. | Inventories |
Restated | Restated | Restated | ||||||||||
30 June | 30 June | 31 December | ||||||||||
2006 | 2005 | 2004 | ||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||
Finished goods | 6,979 | 3,740 | 2,140 | |||||||||
Work in progress | 519 | 283 | — | |||||||||
7,498 | 4,023 | 2,140 | ||||||||||
11. | Investments accounted for using the equity method |
(a) | Investments in associates |
Name of associate company: | Royal Wolf Hi-Tech Pty Limited | |
Principal activities: | Sale, hire and modification of containers | |
Reporting date: | 30 June | |
Ownership interest: | 100% (2005: 50%; 2004: 50%) On 30 March 2006, the remaining 50% in Royal Wolf Hi-Tech Pty Limited was acquired by Royal Wolf Trading Australia Pty Limited — refer to the acquisitions of subsidiaries note 24. |
F-25
Table of Contents
Restated | Restated | |||||||
30 June | 31 December | |||||||
2005 | 2004 | |||||||
A$’000 | A$’000 | |||||||
Revenues (100%) | 1,506 | 1,558 | ||||||
Gross profit (100%) | 1,342 | 1,092 | ||||||
Pretax profit (100%) | 491 | 262 | ||||||
Profit (100%) | 344 | 184 | ||||||
Share of associates net profit recognised | 172 | 92 | ||||||
Current assets (100%) | 492 | 502 | ||||||
Noncurrent assets (100%) | 1,180 | 938 | ||||||
Total assets (100%) | 1,672 | 1,440 | ||||||
Current liabilities (100%) | 644 | 852 | ||||||
Noncurrent liabilities (100%) | 174 | 78 | ||||||
Total liabilities (100%) | 818 | 930 | ||||||
Net assets as reported by associate (100%) | 854 | 510 | ||||||
Share of associate’s net assets equity accounted | 427 | 255 | ||||||
Results of associates | ||||||||
Carrying value of investment in associate at beginning of year | 255 | 163 | ||||||
Share of associate profit before income tax | 246 | 131 | ||||||
Share of income tax expense | (74 | ) | (39 | ) | ||||
Carrying value of investment in associate at end of year | 427 | 255 | ||||||
F-26
Table of Contents
12. | Property, plant and equipment |
Plant and | ||||||||
Equipment, | ||||||||
Fixtures | ||||||||
Note | and Fittings | |||||||
A$’000 | ||||||||
Cost | ||||||||
Balance at 1 January 2004 (restated) | 1,151 | |||||||
Acquisitions | 1,254 | |||||||
Disposals | (69 | ) | ||||||
Balance at 31 December 2004 (restated) | 2,336 | |||||||
Balance at 1 January 2005 (restated) | 2,336 | |||||||
Acquisitions | 1,937 | |||||||
Disposals | (35 | ) | ||||||
Balance at 30 June 2005 (restated) | 4,238 | |||||||
Balance at 1 July 2005 (restated) | 4,238 | |||||||
Acquisitions | 1,119 | |||||||
Acquisitions through business combinations | 24 | 326 | ||||||
Disposals | (107 | ) | ||||||
Balance at 30 June 2006 (restated) | 5,576 | |||||||
F-27
Table of Contents
Plant and | ||||
Equipment, | ||||
Fixtures and | ||||
Fittings | ||||
A$’000 | ||||
Depreciation and impairment losses | ||||
Balance at 1 January 2004 (restated) | — | |||
Depreciation charge for the period | (557 | ) | ||
Disposals | 33 | |||
Balance at 31 December 2004 (restated) | (524 | ) | ||
Balance at 1 January 2005 (restated) | (524 | ) | ||
Depreciation charge for the period | (436 | ) | ||
Disposals | 28 | |||
Balance at 30 June 2005 (restated) | (932 | ) | ||
Balance at 1 July 2005 (restated) | (932 | ) | ||
Depreciation charge for the period | (1,110 | ) | ||
Disposals | 65 | |||
Balance at 30 June 2006 (restated) | (1,977 | ) | ||
Carrying amounts | ||||
At 1 January 2004 (restated) | 1,151 | |||
At 31 December 2004 (restated) | 1,812 | |||
At 1 January 2005 (restated) | 1,812 | |||
At 30 June 2005 (restated) | 3,306 | |||
At 1 July 2005 (restated) | 3,306 | |||
At 30 June 2006 (restated) | 3,599 | |||
F-28
Table of Contents
13. | Container for hire fleet |
Note | A$’000 | |||||||
Cost | ||||||||
Balance at 1 January 2004 (restated) | 17,451 | |||||||
Acquisitions | 12,003 | |||||||
Transfers to inventory | (5,448 | ) | ||||||
Balance at 31 December 2004 (restated) | 24,006 | |||||||
Balance at 1 January 2005 (restated) | 24,006 | |||||||
Acquisitions | 7,725 | |||||||
Transfers to inventory | (3,826 | ) | ||||||
Balance at 30 June 2005 (restated) | 27,905 | |||||||
Balance at 1 July 2005 (restated) | 27,905 | |||||||
Acquisitions | 18,073 | |||||||
Acquisitions through business combinations | 24 | 6,829 | ||||||
Transfers to inventory | (11,337 | ) | ||||||
Balance at 30 June 2006 (restated) | 41,470 | |||||||
Depreciation and impairment losses | ||||||||
Balance at 1 January 2004 (restated) | — | |||||||
Depreciation charge for the period | (2,408 | ) | ||||||
Transfers to inventory | 849 | |||||||
Balance at 31 December 2004 (restated) | (1,559 | ) | ||||||
Balance at 1 January 2005 (restated) | (1,559 | ) | ||||||
Depreciation charge for the period | (1,272 | ) | ||||||
Transfers to inventory | 705 | |||||||
Balance at 30 June 2005 (restated) | (2,126 | ) | ||||||
Balance at 1 July 2005 (restated) | (2,126 | ) | ||||||
Depreciation charge for the period | (1,978 | ) | ||||||
Transfers to inventory | 1,125 | |||||||
Balance at 30 June 2006 (restated) | 2,979 | |||||||
Carrying amounts | ||||||||
At 1 January 2004 (restated) | 17,451 | |||||||
At 31 December 2004 (restated) | 22,447 | |||||||
At 1 January 2005 (restated) | 22,447 | |||||||
At 30 June 2005 (restated) | 25,779 | |||||||
At 1 July 2005 (restated) | 25,779 | |||||||
At 30 June 2006 (restated) | 38,491 | |||||||
F-29
Table of Contents
14. | Intangible assets |
Software | Goodwill | Trademarks | Other | Total | ||||||||||||||||
A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | ||||||||||||||||
Cost | ||||||||||||||||||||
Balance at 1 January 2004 (restated) | 944 | 581 | 398 | — | 1,923 | |||||||||||||||
Acquisitions through business combinations | — | 3,500 | — | — | 3,500 | |||||||||||||||
Other acquisitions | 70 | — | — | — | 70 | |||||||||||||||
Balance at 31 December 2004 (restated) | 1,014 | 4,081 | 398 | — | 5,493 | |||||||||||||||
Balance at 1 January 2005 (restated) | 1,014 | 4,081 | 398 | — | 5,493 | |||||||||||||||
Acquisitions | 25 | — | — | — | 25 | |||||||||||||||
Balance at 30 June 2005 (restated) | 1,039 | 4,081 | 398 | — | 5,518 | |||||||||||||||
Balance at 1 July 2005 (restated) | 1,039 | 4,081 | 398 | — | 5,518 | |||||||||||||||
Acquisitions through business combinations | — | 1,749 | — | — | 1,749 | |||||||||||||||
Other acquisitions | 133 | — | — | 363 | 496 | |||||||||||||||
Balance at 30 June 2006 (restated) | 1,172 | 5,830 | 398 | 363 | 7,763 | |||||||||||||||
Amortisation and impairment losses | ||||||||||||||||||||
Balance at 1 January 2004 (restated) | — | — | — | — | — | |||||||||||||||
Amortisation for the period | (431 | ) | — | — | — | (431 | ) | |||||||||||||
Write off on utilisation of unrecognised tax assets arising from business combinations prior to transition to AIFRS | — | (547 | ) | — | — | (547 | ) | |||||||||||||
Balance at 31 December 2004 (restated) | (431 | ) | (547 | ) | — | — | (978 | ) | ||||||||||||
Balance at 1 January 2005 (restated) | (431 | ) | (547 | ) | — | — | (978 | ) | ||||||||||||
Amortisation for the period | (206 | ) | — | — | — | (206 | ) | |||||||||||||
Write off on utilisation of unrecognised tax assets arising from business combinations prior to transition to AIFRS | — | (127 | ) | — | — | (127 | ) | |||||||||||||
Balance at 30 June 2005 (restated) | (637 | ) | (674 | ) | — | — | (1,311 | ) | ||||||||||||
Balance at 1 July 2005 (restated) | (637 | ) | (674 | ) | — | — | (1,311 | ) | ||||||||||||
Amortisation for the period | (464 | ) | — | — | (21 | ) | (485 | ) | ||||||||||||
Write off on utilisation of unrecognised tax assets arising from business combinations prior to transition to AIFRS | — | (907 | ) | — | — | (907 | ) | |||||||||||||
Balance at 30 June 2006 (restated) | (1,101 | ) | (1,581 | ) | — | (21 | ) | (2,703 | ) | |||||||||||
F-30
Table of Contents
Software | Goodwill | Trademarks | Other | Total | ||||||||||||||||
A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | ||||||||||||||||
Carrying amounts | ||||||||||||||||||||
At 1 January 2004 (restated) | 944 | 581 | 398 | — | 1,923 | |||||||||||||||
At 31 December 2004 (restated) | 583 | 3,534 | 398 | — | 4,515 | |||||||||||||||
1 January 2005 (restated) | 583 | 3,534 | 398 | — | 4,515 | |||||||||||||||
30 June 2005 (restated) | 402 | 3,407 | 398 | — | 4,207 | |||||||||||||||
1 July 2005 (restated) | 402 | 3,407 | 398 | — | 4,207 | |||||||||||||||
30 June 2006 (restated) | 71 | 4,249 | 398 | 342 | 5,060 | |||||||||||||||
F-31
Table of Contents
15. | Trade and other payables |
Restated | Restated | Restated | ||||||||||||||
30 June | 30 June | 31 December | ||||||||||||||
Note | 2006 | 2005 | 2004 | |||||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||||||
Trade payables | 10,565 | 5,870 | 4,023 | |||||||||||||
Other payables | 1,349 | 1,708 | 1,611 | |||||||||||||
Unearned revenue | 565 | 489 | 470 | |||||||||||||
Deferred consideration for controlled entity | — | — | 3,500 | |||||||||||||
Fair value derivative | 20 | 30 | 161 | — | ||||||||||||
Related party — other payable | — | — | 1,926 | |||||||||||||
12,509 | 8,228 | 11,530 | ||||||||||||||
16. | Interest bearing loans and borrowings |
Restated | Restated | Restated | ||||||||||||||
30 June | 30 June | 31 December | ||||||||||||||
Note | 2006 | 2005 | 2004 | |||||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||||||
Current liabilities | ||||||||||||||||
Bank overdraft | 8 | 2,126 | — | 533 | ||||||||||||
Current portion of bank loans | 5,831 | 1,939 | — | |||||||||||||
Other loans | 73 | 20 | 343 | |||||||||||||
Current portion of finance lease liabilities | 909 | 819 | 549 | |||||||||||||
8,939 | 2,778 | 1,425 | ||||||||||||||
Non-current liabilities | ||||||||||||||||
Bank loan | 18,099 | 22,364 | 14,489 | |||||||||||||
Non-convertible notes | 10,898 | — | — | |||||||||||||
B class notes | 6,654 | 5,422 | 4,051 | |||||||||||||
Finance lease liabilities | 1,543 | 2,389 | 2,074 | |||||||||||||
37,194 | 30,175 | 20,614 | ||||||||||||||
F-32
Table of Contents
Restated | Restated | Restated | ||||||||||
30 June | 30 June | 31 December | ||||||||||
2006 | 2005 | 2004 | ||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||
Bank overdraft | 1,020 | 2,000 | 1,000 | |||||||||
Invoice financing facility | 7,500 | — | — | |||||||||
Secured bank loans | 42,962 | 29,280 | 30,800 | |||||||||
51,482 | 31,280 | 31,800 | ||||||||||
Facilities utilised at reporting date | ||||||||||||
Bank overdraft | 934 | — | 533 | |||||||||
Invoice financing facility | 1,192 | — | — | |||||||||
Secured bank loans | 35,349 | 24,303 | 14,489 | |||||||||
37,475 | 24,303 | 15,022 | ||||||||||
Facilities not utilised at reporting date | ||||||||||||
Bank overdraft | 86 | 2,000 | 467 | |||||||||
Invoice financing facility | 6,308 | — | — | |||||||||
Secured bank loans | 7,613 | 4,977 | 16,311 | |||||||||
14,007 | 6,977 | 16,778 | ||||||||||
F-33
Table of Contents
2006 | 2005 | 2004 | ||||||||||||||||||||||||||||||||||
Restated | Restated | Restated | ||||||||||||||||||||||||||||||||||
Minimum | Minimum | Minimum | ||||||||||||||||||||||||||||||||||
Lease | Lease | Lease | ||||||||||||||||||||||||||||||||||
Payments | Interest | Principal | Payments | Interest | Principal | Payments | Interest | Principal | ||||||||||||||||||||||||||||
A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | ||||||||||||||||||||||||||||
Less than one year | 1,096 | 187 | 909 | 1,081 | 262 | 819 | 770 | 221 | 549 | |||||||||||||||||||||||||||
Between one and five years | 1,640 | 97 | 1,543 | 2,666 | 277 | 2,389 | 2,342 | 268 | 2,074 | |||||||||||||||||||||||||||
More than five years | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
2,736 | 284 | 2,452 | 3,747 | 539 | 3,208 | 3,112 | 489 | 2,623 | ||||||||||||||||||||||||||||
F-34
Table of Contents
17. | Employee benefits |
Restated | Restated | Restated | ||||||||||
30 June | 30 June | 31 December | ||||||||||
2006 | 2005 | 2004 | ||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||
Current | ||||||||||||
Liability for annual leave | 775 | 801 | 444 | |||||||||
Liability for long service leave | 187 | — | — | |||||||||
962 | 801 | 444 | ||||||||||
Non Current | ||||||||||||
Liability for long service leave | 257 | 119 | 272 | |||||||||
Cash settled transactions | 310 | 108 | 36 | |||||||||
567 | 227 | 308 | ||||||||||
Total employee benefits | 1,529 | 1,028 | 752 | |||||||||
• | the exercise price for the options is nil for most employees, with one employee having options exercisable at $0.50 per share | |
• | the options expire on the expiry date or the termination date of the employee, whichever is the earlier | |
• | upon exercise, the nil price and $0.50 options will be settled in the unissued ordinary shares of RWA Holdings Pty Limited | |
• | the nil price options can be settled in cash at the option of the company or the holder and are only exercisable on an exercising or realisation event (see below) |
F-35
Table of Contents
Weighted | Weighted | |||||||||||||||||||||||
Average | Weighted | Average | ||||||||||||||||||||||
Exercise | Number of | Average | Number of | Exercise | Number of | |||||||||||||||||||
Price | Options | Exercise Price | Options | Price | Options | |||||||||||||||||||
12 Months | 12 Months | 6 Months | 6 Months | 12 Months | 12 Months | |||||||||||||||||||
2006 | 2006 | 2005 | 2005 | 2004 | 2004 | |||||||||||||||||||
Outstanding at the beginning of the period | A$ | 0.08 | 438,582 | A$ | 0.08 | 452,982 | N/A | — | ||||||||||||||||
Granted during the period | — | 17,682 | — | — | A$ | 0.08 | 452,982 | |||||||||||||||||
Cancelled during the period | — | (17,865 | ) | — | — | — | — | |||||||||||||||||
Exercised during the period | A$ | 0.50 | (14,400 | ) | A$ | 0.50 | (14,400 | ) | — | — | ||||||||||||||
Expired during the period | — | — | — | — | — | — | ||||||||||||||||||
Outstanding at the end of the period | A$ | 0.08 | 423,999 | A$ | 0.08 | 438,582 | A$ | 0.08 | 452,982 | |||||||||||||||
Exercisable at the end of the period | — | 212,929 | — | 126,832 | — | 144,697 |
• | 363,117 options over ordinary shares with an exercise price of nil, exercisable as above until 31 August 2014, or earlier as appropriate | |
• | 43,200 options over ordinary shares with an exercise price of $0.50, exercisable as above until 17 May 2009, or earlier as appropriate | |
• | 17,682 options over ordinary shares with an exercise price of nil, exercisable as above until 19 Aug 2015, or earlier as appropriate |
F-36
Table of Contents
Key Mgmt | Key Mgmt | Key Mgmt | ||||||||||
Personnel | Personnel | Personnel | ||||||||||
30 June | 30 June | 31 December | ||||||||||
2006 | 2005 | 2004 | ||||||||||
Fair value at measurement date | A$ | 1.086 | A$ | 0.695 | A$ | 0.575 | ||||||
Share value | A$ | 1.25 | A$ | 0.77 | A$ | 0.65 | ||||||
Weighted average exercise price | A$ | 0.08 | A$ | 0.08 | A$ | 0.08 | ||||||
Expected volatility (based on volatility of similar but listed organisations) | 29.7 | % | 28.8 | % | 28.1 | % | ||||||
Option life (based on date options are expected to be exercised) | 2.25 yrs | 3.25 years | 3.75 years | |||||||||
Risk free rate (based on Australian Government Bonds) | 5.79 | % | 5.10 | % | 5.16 | % |
18. | Provisions |
Leasehold | ||||||||||||
Makegood | Deferred | |||||||||||
Costs | Consideration | Total | ||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||
Balance at 1 January 2004 (restated) | — | — | — | |||||||||
Provisions made during the year | 8 | — | 8 | |||||||||
Balance at 31 December 2004 (restated) | 8 | — | 8 | |||||||||
Balance at 1 January 2005 (restated) | 8 | — | 8 | |||||||||
Provisions made during the year | — | — | — | |||||||||
Balance at 30 June 2005 (restated) | 8 | — | 8 | |||||||||
Balance at 1 July 2005 (restated) | 8 | — | 8 | |||||||||
Provisions made during the year | — | 574 | 574 | |||||||||
Balance at 30 June 2006 (restated) | 8 | 574 | 582 | |||||||||
Balance at 30 June 2006 (restated) | ||||||||||||
Current | — | 300 | 300 | |||||||||
Non-current | 8 | 274 | 282 | |||||||||
8 | 574 | 582 | ||||||||||
F-37
Table of Contents
19. | Capital and reserves |
Retained | ||||||||||||||||
Earnings/ | Asset | |||||||||||||||
Share | Accumulated | Revaluation | Total | |||||||||||||
Capital | Losses | Reserve | Equity | |||||||||||||
A$’000 | A$’000 | A$’000 | A$’000 | |||||||||||||
Balance at 1 January 2004 (restated) | 3,672 | — | — | 3,672 | ||||||||||||
Total recognised income and expense | — | 479 | — | 479 | ||||||||||||
Balance at 31 December 2004 (restated) | 3,672 | 479 | — | 4,151 | ||||||||||||
Balance at 1 January 2005 (restated) | 3,672 | 479 | — | 4,151 | ||||||||||||
Call on issued shares | 878 | — | — | 878 | ||||||||||||
Total recognised income and expense | — | (213 | ) | — | (213 | ) | ||||||||||
Balance at 30 June 2005 (restated) | 4,550 | 266 | — | 4,816 | ||||||||||||
Balance at 1 July 2005 (restated) | 4,550 | 266 | — | 4,816 | ||||||||||||
Total recognised income and expense | — | (331 | ) | — | (331 | ) | ||||||||||
Revaluation of assets on acquisition of controlled entity | — | — | 344 | 344 | ||||||||||||
Balance at 30 June 2006 (restated) | 4,550 | (65 | ) | 344 | 4,829 | |||||||||||
Restated | Restated | Restated | ||||||||||
30 June | 30 June | 31 December | ||||||||||
2006 | 2005 | 2004 | ||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||
2,160,000 Ordinary Shares | 1,080 | 1,080 | 1,080 | |||||||||
4,322,590 A Class Shares | 3,470 | 3,470 | 2,592 | |||||||||
100 Class C Shares | — | — | — | |||||||||
4,550 | 4,550 | 3,672 | ||||||||||
Movement in A Class Shares paid up value | No. ’000 | A$ | ’000 | |||||||||
At 1 January 2005 | 4,323 | 2,592 | ||||||||||
During 2005, the consolidated entity took up a call of 20.3 cents per share | — | 878 | ||||||||||
At 30 June 2005 | 4,323 | 3,470 | ||||||||||
F-38
Table of Contents
20. | Financial instruments |
F-39
Table of Contents
Effective | ||||||||||||||||||||||||||||
Interest | ||||||||||||||||||||||||||||
Rate | < 1 | 1-2 | 2-5 | >5 | ||||||||||||||||||||||||
30 June 2006 (Restated) | Note | % | Year | Years | Years | Years | Total | |||||||||||||||||||||
A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | ||||||||||||||||||||||||
Fixed rate | ||||||||||||||||||||||||||||
Lease receivable | 9 | 18.1 | % | 335 | 380 | 395 | — | 1,110 | ||||||||||||||||||||
Finance lease liabilities | 16 | 9.0 | % | (909 | ) | (1,104 | ) | (439 | ) | — | (2,452 | ) | ||||||||||||||||
Other loans | 16 | 4.2 | % | (73 | ) | — | — | — | (73 | ) | ||||||||||||||||||
Non-convertible notes | 16 | 15.0 | % | — | — | — | (10,898 | ) | (10,898 | ) | ||||||||||||||||||
B class notes | 16 | 15.0 | % | — | — | — | (6,654 | ) | (6,654 | ) | ||||||||||||||||||
Variable rate | ||||||||||||||||||||||||||||
Cash and cash equivalents | 8 | 3.3 | % | 777 | — | — | — | 777 | ||||||||||||||||||||
Bank loans | 16 | BBSW + 1.10 | % | (4,396 | ) | (1,665 | ) | (10,737 | ) | — | (16,798 | ) | ||||||||||||||||
Interest rate swap | 9 | 6.0 | % | 132 | — | — | — | 132 | ||||||||||||||||||||
Bank overdrafts | 16 | BBSW + 1.65 | % | (2,126 | ) | — | — | — | (2,126 | ) | ||||||||||||||||||
Commercial bills | 16 | 6.9 | % | (1,367 | ) | (1,425 | ) | (4,340 | ) | — | (7,132 | ) | ||||||||||||||||
(7,627 | ) | (3,814 | ) | (15,121 | ) | (17,552 | ) | (44,114 | ) | |||||||||||||||||||
F-40
Table of Contents
Effective | ||||||||||||||||||||||||||||
Interest | ||||||||||||||||||||||||||||
Rate | < 1 | 1-2 | 2-5 | >5 | ||||||||||||||||||||||||
30 June 2005 (Restated) | Note | % | Year | Years | Years | Years | Total | |||||||||||||||||||||
A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | ||||||||||||||||||||||||
Fixed rate | ||||||||||||||||||||||||||||
Lease receivable | 9 | 18.1 | % | 180 | 216 | 623 | — | 1,019 | ||||||||||||||||||||
Finance lease liabilities | 16 | 9.2 | % | (819 | ) | (893 | ) | (1,496 | ) | — | (3,208 | ) | ||||||||||||||||
Other loans | 16 | 3.8 | % | (20 | ) | — | — | — | (20 | ) | ||||||||||||||||||
B class notes | 16 | 15.0 | % | — | — | — | (5,422 | ) | (5,422 | ) | ||||||||||||||||||
Variable rate | ||||||||||||||||||||||||||||
Cash and cash equivalents | 8 | 3.5 | % | 695 | — | — | — | 695 | ||||||||||||||||||||
Bank loans | 16 | BBSW + 1.10 | % | (859 | ) | (869 | ) | (7,336 | ) | — | (9,064 | ) | ||||||||||||||||
Commercial bills | 16 | 5.7 | % | (1,080 | ) | (3,980 | ) | (10,179 | ) | — | (15,239 | ) | ||||||||||||||||
Interest rate swap | 15 | 5.9 | % | (161 | ) | — | — | — | (161 | ) | ||||||||||||||||||
(2,064 | ) | (5,526 | ) | (18,388 | ) | (5,422 | ) | (31,400 | ) | |||||||||||||||||||
Effective | ||||||||||||||||||||||||||||
Interest | ||||||||||||||||||||||||||||
Rate | <1 | 1-2 | 2-5 | >5 | ||||||||||||||||||||||||
31 December 2004 (Restated) | Note | % | Year | Years | Years | Years | Total | |||||||||||||||||||||
A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | ||||||||||||||||||||||||
Fixed rate | ||||||||||||||||||||||||||||
Lease receivable | 9 | 18.1 | % | 165 | 197 | 737 | — | 1,099 | ||||||||||||||||||||
Finance lease liabilities | 16 | 9.2 | % | (549 | ) | (677 | ) | (1,397 | ) | — | (2,623 | ) | ||||||||||||||||
Other loans | 16 | 3.8 | % | (343 | ) | — | — | — | (343 | ) | ||||||||||||||||||
B class notes | 16 | 15.0 | % | — | — | — | (4,051 | ) | (4,051 | ) | ||||||||||||||||||
Variable rate | ||||||||||||||||||||||||||||
Cash and cash equivalent | 8 | 3.51 | % | 3 | — | — | — | 3 | ||||||||||||||||||||
Bank overdraft | 8 | ANZ Ref Rate — 1.0 | % | (533 | ) | — | — | — | (533 | ) | ||||||||||||||||||
Commercial bills | 16 | 5.7 | % | — | (3,479 | ) | (11,010 | ) | — | (14,489 | ) | |||||||||||||||||
(1,257 | ) | (3,959 | ) | (11,670 | ) | (4,051 | ) | (20,937 | ) | |||||||||||||||||||
F-41
Table of Contents
F-42
Table of Contents
Carrying | Carrying | Carrying | ||||||||||||||||||||||||||
Amount | Fair Value | Amount | Fair Value | Amount | Fair Value | |||||||||||||||||||||||
Restated | Restated | Restated | Restated | Restated | Restated | |||||||||||||||||||||||
30 June | 30 June | 30 June | 30 June | 31 December | 31 December | |||||||||||||||||||||||
Note | 2006 | 2006 | 2005 | 2005 | 2004 | 2004 | ||||||||||||||||||||||
A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | |||||||||||||||||||||||
Cash and cash equivalents | 8 | 777 | 777 | 695 | 695 | 3 | 3 | |||||||||||||||||||||
Trade and other receivables | 9 | 9,739 | 9,739 | 7,362 | 7,362 | 6,770 | 6,770 | |||||||||||||||||||||
Receivable from related party | 9 | — | — | 74 | 74 | 89 | 89 | |||||||||||||||||||||
Lease receivable | 9 | 1,110 | 1,110 | 1,019 | 1,019 | 1,099 | 1,099 | |||||||||||||||||||||
Loan to related entity | 9 | — | — | 260 | 260 | 260 | 260 | |||||||||||||||||||||
Interest rate swap | 9 | 132 | 132 | (161 | ) | (161 | ) | — | — | |||||||||||||||||||
Bank overdraft | 16 | (2,126 | ) | (2,126 | ) | — | — | (533 | ) | (533 | ) | |||||||||||||||||
Trade and other payables | 15 | (12,479 | ) | (12,479 | ) | (8,067 | ) | (8,067 | ) | (11,530 | ) | (11,530 | ) | |||||||||||||||
Other loan | 16 | (73 | ) | (73 | ) | (20 | ) | (20 | ) | (343 | ) | (343 | ) | |||||||||||||||
Finance lease liabilities | 16 | (2,452 | ) | (2,452 | ) | (3,208 | ) | (3,208 | ) | (2,623 | ) | (2,623 | ) | |||||||||||||||
Bank loans | 16 | (18,838 | ) | (18,838 | ) | (9,064 | ) | (9,064 | ) | — | — | |||||||||||||||||
Commercial bills | 16 | (5,092 | ) | (5,092 | ) | (15,239 | ) | (15,239 | ) | (14,489 | ) | (14,489 | ) | |||||||||||||||
Forward exchange contracts | 15 | (30 | ) | (30 | ) | — | — | — | — | |||||||||||||||||||
Non-convertible notes | 16 | (10,898 | ) | (10,898 | ) | — | — | — | — | |||||||||||||||||||
B class notes | 16 | (6,654 | ) | (6,654 | ) | (5,422 | ) | (5,422 | ) | (4,051 | ) | (4,051 | ) | |||||||||||||||
(46,884 | ) | (46,884 | ) | (31,771 | ) | (31,771 | ) | (25,348 | ) | (25,348 | ) | |||||||||||||||||
F-43
Table of Contents
30 June | 30 June | 31 December | ||||
2006 | 2005 | 2004 | ||||
Derivatives | 6.0% | 6.0% | N/A | |||
Loans and borrowings | 4.2% - 15.0% | 3.8% - 15.0% | 3.8% - 15.0% | |||
Leases | 9.0% | 9.2% | 9.2% | |||
Receivables | 18.1% | 18.1% | 18.1% |
21. | Operating leases |
Restated | Restated | Restated | ||||||||||
30 June | 30 June | 31 December | ||||||||||
2006 | 2005 | 2004 | ||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||
Less than one year | 2,602 | 2,323 | 2,549 | |||||||||
Between one and five years | 2,576 | 1,725 | 2,004 | |||||||||
More than five years | 452 | — | — | |||||||||
5,630 | 4,048 | 4,553 | ||||||||||
F-44
Table of Contents
30 June | 30 June | 31 December | ||||||||||
2006 | 2005 | 2004 | ||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||
Less than one year | 493 | 165 | 52 | |||||||||
Between one and five years | 917 | 1 | — | |||||||||
More than five years | — | — | — | |||||||||
1,410 | 166 | 52 | ||||||||||
22. | Capital and other commitments |
23. | Consolidated entities |
County of | Ownership Interest | |||||||||||||||
Subsidiaries | Note | Incorporation | 2006 | 2004 - 2005 | ||||||||||||
Royal Wolf Trading Australia Pty Limited | Australia | 100 | % | 100 | % | |||||||||||
Royal Wolf Hi-Tech Pty Limited | 24 | Australia | 100 | % | 50 | % |
24. | Acquisitions of subsidiaries |
• | Royal Wolf Hi-Tech Pty Limited | |
• | Australian Container Network Pty Ltd | |
• | Cape Containers Pty Limited |
F-45
Table of Contents
Royal Wolf Hi-Tech | Australian Container Network | Cape Containers | ||||||||||||||||||||||||||||||||||||||
Fair | Fair | Fair | ||||||||||||||||||||||||||||||||||||||
Recog- | Value | Recog- | Value | Recog- | value | |||||||||||||||||||||||||||||||||||
nised | Adjust- | Carrying | nised | Adjust- | Carrying | nised | Adjust- | Carrying | ||||||||||||||||||||||||||||||||
Note | Values | ments | Amounts | Values | ments | Amounts | Values | ments | Amounts | |||||||||||||||||||||||||||||||
A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | ||||||||||||||||||||||||||||||||
Property, plant and equipment | 129 | 31 | 98 | 195 | 23 | 172 | 2 | — | 2 | |||||||||||||||||||||||||||||||
Container hire fleet | 1,768 | 742 | 1,026 | 4,416 | 2,707 | 1,709 | 645 | 169 | 476 | |||||||||||||||||||||||||||||||
Inventories | 105 | 31 | 74 | 555 | 169 | 386 | — | — | — | |||||||||||||||||||||||||||||||
Trade and other receivables | 232 | — | 232 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
Cash and cash equivalents | 100 | — | 100 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
Interest-bearing loans and borrowings | (501 | ) | — | (501 | ) | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Deferred tax liability | (241 | ) | (241 | ) | — | (870 | ) | (870 | ) | — | (51 | ) | (51 | ) | — | |||||||||||||||||||||||||
Trade and other payables | (243 | ) | — | (243 | ) | — | — | — | (18 | ) | — | (18 | ) | |||||||||||||||||||||||||||
Net identifiable assets and liabilities | 1,349 | 563 | 786 | 4,296 | 2,029 | 2,267 | 578 | 118 | 460 | |||||||||||||||||||||||||||||||
Goodwill on acquisitions | 14 | 298 | 1,209 | 242 | ||||||||||||||||||||||||||||||||||||
Consideration paid, satisfied in cash* | 839 | 4,931 | 820 | |||||||||||||||||||||||||||||||||||||
Deferred consideration accrued | — | 574 | — | |||||||||||||||||||||||||||||||||||||
Cash (acquired) | (100 | ) | — | — | ||||||||||||||||||||||||||||||||||||
Net cash outflow | 739 | 4,931 | 820 | |||||||||||||||||||||||||||||||||||||
* | Includes legal fees amounting to $105,000 |
F-46
Table of Contents
25. | Reconciliation of cash flows from operating activities |
Restated | Restated | Restated | ||||||||||||||
30 June | 30 June | 31 December | ||||||||||||||
2006 | 2005 | 2004 | ||||||||||||||
Note | 12 Months | 6 Months | 12 Months | |||||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||||||
Cash flows from operating activities | ||||||||||||||||
Profit/(loss) for the period | (331 | ) | (213 | ) | 479 | |||||||||||
Adjustments for: | ||||||||||||||||
Gain on sale of property, plant and equipment | (28 | ) | (17 | ) | (28 | ) | ||||||||||
Foreign exchange (gain) / loss | (50 | ) | (325 | ) | 390 | |||||||||||
Unrealised loss on forward exchange contracts | 30 | — | — | |||||||||||||
Unrealised gain on interest rate swap | (293 | ) | — | — | ||||||||||||
Depreciation and amortisation | 4,480 | 2,041 | 3,943 | |||||||||||||
Share of associates net profit | — | (172 | ) | (92 | ) | |||||||||||
Investment income | (209 | ) | (104 | ) | (118 | ) | ||||||||||
Interest expense | 4,034 | 1,457 | 3,252 | |||||||||||||
Income tax (benefit) / expense | (525 | ) | (30 | ) | (4 | ) | ||||||||||
Cash settled share based payment expenses | 203 | 72 | 36 | |||||||||||||
Operating profit before changes in working capital and provisions | 7,311 | 2,709 | 7,858 | |||||||||||||
(Increase) / decrease in trade and other receivables | (2,377 | ) | (592 | ) | (1,325 | ) | ||||||||||
(Increase) / decrease in inventories | 6,611 | (452 | ) | 3,910 | ||||||||||||
Increase / (decrease) in trade and other payables | 4,412 | 1,963 | (3,747 | ) | ||||||||||||
Increase / (decrease) in provisions and employee benefits | 1,075 | 276 | 44 | |||||||||||||
17,032 | 3,904 | 6,740 | ||||||||||||||
Interest (paid)/received | (3,041 | ) | (1,270 | ) | (1,721 | ) | ||||||||||
Income taxes paid | — | (759 | ) | 781 | ||||||||||||
Net cash from operating activities | 13,991 | 1,875 | 5,800 | |||||||||||||
26. | Related parties |
F-47
Table of Contents
Restated | Restated | Restated | ||||||||||
30 June | 30 June | 31 December | ||||||||||
2006 | 2005 | 2004 | ||||||||||
12 Months | 6 Months | 12 Months | ||||||||||
A$ | A$ | A$ | ||||||||||
Short-term employee benefits | 1,613,765 | 932,509 | 1,342,148 | |||||||||
Other long term benefits | — | — | — | |||||||||
Post-employment benefits | 175,040 | 98,820 | 148,107 | |||||||||
Termination benefits | — | — | — | |||||||||
Share based payment | 92,675 | 31,243 | 17,643 | |||||||||
1,881,480 | 1,062,572 | 1,507,898 | ||||||||||
Key Management Person | 30 June | 30 June | 31 December | |||||||||||||||
Related Party | Transaction | Note | 2006 | 2005 | 2004 | |||||||||||||
A$ | A$ | A$ | ||||||||||||||||
RW Logistic Pty Limited | Sales revenue | (i | ) | — | 45,191 | 3,195,014 | ||||||||||||
RW Logistic Pty Limited | Inventory purchases | (i | ) | — | 2,142,536 | 1,311,593 |
(i) | While the Company itself has no interest in RW Logistic Pty Limited, this entity is related through common shareholders and directorships |
27. | Reconciliation to U.S. GAAP |
F-48
Table of Contents
30 June | 30 June | 31 Dec | ||||||||||||||
2006 | 2005 | 2004 | ||||||||||||||
Note | 12 Months | 6 Months | 12 Month | |||||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||||||
Net profit / (loss) after tax as reported in the audited financial statements under AIFRS (restated) | (331 | ) | (213 | ) | 479 | |||||||||||
Write-off of development costs | 1 | (304 | ) | — | — | |||||||||||
Share based payment expense | 3 | (47 | ) | (16 | ) | (94 | ) | |||||||||
Step-up on acquisition | 4 | 19 | — | — | ||||||||||||
Net loss according to US GAAP before tax impact of adjustments | (663 | ) | (229 | ) | 385 | |||||||||||
Tax effect on US GAAP adjustment | 2 | 91 | — | — | ||||||||||||
Net income/(loss) under US GAAP | (572 | ) | (229 | ) | 385 | |||||||||||
30 June | 30 June | 31 Dec | ||||||||||||||
Note | 2006 | 2005 | 2004 | |||||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||||||
Total equity under AIFRS (restated) | 4,829 | 4,816 | 4,151 | |||||||||||||
Writeoff of development costs | 1 | (304 | ) | — | — | |||||||||||
Tax effect on US GAAP adjustment | 2 | 91 | — | — | ||||||||||||
Share based payments expense | 3 | (157 | ) | (110 | ) | (94 | ) | |||||||||
Step-up on acquisition | 4 | (325 | ) | — | — | |||||||||||
Shareholders’ equity under U.S. GAAP | 4,134 | 4,706 | 4,057 | |||||||||||||
F-49
Table of Contents
Restated | U.S. GAAP | |||||||||||||||
Note | AIFRS | Adjustments | U.S. GAAP | |||||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||||||
Revenue | ||||||||||||||||
Sale and modification of containers | 46,097 | — | 46,097 | |||||||||||||
Hire of containers | 21,290 | — | 21,290 | |||||||||||||
Total revenue | 67,387 | — | 67,387 | |||||||||||||
Other income | 35 | — | 35 | |||||||||||||
Changes in inventories of finished goods and WIP | (3,475 | ) | — | (3,475 | ) | |||||||||||
Purchases of finished goods and consumables used | 4 | (40,243 | ) | 9 | (40,234 | ) | ||||||||||
Employee benefits expense | 3 | (10,157 | ) | (47 | ) | (10,204 | ) | |||||||||
Depreciation and amortisation expense | 4 | (4,480 | ) | 912 | (3,568 | ) | ||||||||||
Other expenses | 1 | (6,411 | ) | (304 | ) | (6,715 | ) | |||||||||
Results from operating activities | 2,656 | 570 | 3,226 | |||||||||||||
Financial income | 552 | — | 552 | |||||||||||||
Financial expenses | (4,064 | ) | — | (4,064 | ) | |||||||||||
Net financing costs | (3,512 | ) | — | (3,512 | ) | |||||||||||
Loss before tax | (856 | ) | 570 | (286 | ) | |||||||||||
Income tax benefit/(expense) | 2,4 | 525 | (811 | ) | (286 | ) | ||||||||||
Loss after tax | (331 | ) | (241 | ) | (572 | ) | ||||||||||
Attributable to: | ||||||||||||||||
Equity holders of the parent | (331 | ) | (241 | ) | (572 | ) | ||||||||||
F-50
Table of Contents
Restated | U.S. GAAP | |||||||||||||||
Note | AIFRS | Adjustments | U.S. GAAP | |||||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||||||
Revenue | ||||||||||||||||
Sale and modification of containers | 17,534 | — | 17,534 | |||||||||||||
Hire of containers | 9,339 | — | 9,339 | |||||||||||||
Total revenue | 26,873 | — | 26,873 | |||||||||||||
Other income | 18 | — | 18 | |||||||||||||
Changes in inventories of finished goods and WIP | (1,936 | ) | — | (1,936 | ) | |||||||||||
Purchases of finished goods and consumables used | (14,687 | ) | — | (14,687 | ) | |||||||||||
Employee benefits expense | 3 | (4,794 | ) | (16 | ) | (4,810 | ) | |||||||||
Depreciation and amortisation expense | (2,041 | ) | 127 | (1,914 | ) | |||||||||||
Other expenses | (2,820 | ) | — | (2,820 | ) | |||||||||||
Results from operating activities | 613 | 111 | 724 | |||||||||||||
Financial income | 429 | — | 429 | |||||||||||||
Financial expenses | (1,457 | ) | — | (1,457 | ) | |||||||||||
Net financing costs | (1,028 | ) | — | (1,028 | ) | |||||||||||
Share of profit of associate | 172 | — | 172 | |||||||||||||
Loss before tax | (243 | ) | 111 | (132 | ) | |||||||||||
Income tax benefit/(expense) | 30 | (127 | ) | (97 | ) | |||||||||||
Loss after tax | (213 | ) | (16 | ) | (229 | ) | ||||||||||
Attributable to: | ||||||||||||||||
Equity holders of the parent | (213 | ) | (16 | ) | (229 | ) | ||||||||||
F-51
Table of Contents
Restated | U.S. GAAP | |||||||||||||||
Note | AIFRS | Adjustments | U.S. GAAP | |||||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||||||
Revenue | ||||||||||||||||
Sale and modification of containers | 35,463 | — | 35,463 | |||||||||||||
Hire of containers | 16,756 | — | 16,756 | |||||||||||||
Total revenue | 52,219 | — | 52,219 | |||||||||||||
Other income | 31 | — | 31 | |||||||||||||
Changes in inventories of finished goods and WIP | 1,740 | — | 1,740 | |||||||||||||
Purchases of finished goods and consumables used | (34,437 | ) | — | (34,437 | ) | |||||||||||
Employee benefits expense | 3 | (7,525 | ) | (94 | ) | (7,619 | ) | |||||||||
Depreciation and amortisation expense | (3,943 | ) | 547 | (3,396 | ) | |||||||||||
Other expenses | (4,568 | ) | — | (4,568 | ) | |||||||||||
Results from operating activities | 3,517 | 453 | 3,970 | |||||||||||||
Financial income | 118 | — | 118 | |||||||||||||
Financial expenses | (3,252 | ) | — | (3,252 | ) | |||||||||||
Net financing costs | (3,134 | ) | — | (3,134 | ) | |||||||||||
Share of profit of associate | 92 | — | 92 | |||||||||||||
Profit before tax | 475 | 453 | 928 | |||||||||||||
Income tax benefit | 7 | 4 | (547 | ) | (543 | ) | ||||||||||
Profit/(loss) after tax | 479 | (94 | ) | 385 | ||||||||||||
Attributable to: | ||||||||||||||||
Equity holders of the parent | 479 | (94 | ) | 385 | ||||||||||||
F-52
Table of Contents
Restated | U.S. GAAP | |||||||||||||||
Note | AIFRS | Adjustments | U.S. GAAP | |||||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||||||
Assets | ||||||||||||||||
Cash and cash equivalents | 777 | — | 777 | |||||||||||||
Trade and other receivables | 10,206 | — | 10,206 | |||||||||||||
Inventories | 4 | 7,498 | (20 | ) | 7,478 | |||||||||||
Total current assets | 18,481 | (20 | ) | 18,461 | ||||||||||||
Receivables | 775 | — | 775 | |||||||||||||
Property, plant and equipment | 4 | 3,599 | (19 | ) | 3,580 | |||||||||||
Container hire fleet | 4 | 38,491 | (451 | ) | 38,040 | |||||||||||
Intangible assets | 1,6 | 5,060 | (304 | ) | 4,756 | |||||||||||
Total non-current assets | 47,925 | (774 | ) | 47,151 | ||||||||||||
Total assets | 66,406 | (794 | ) | 65,612 | ||||||||||||
Liabilities | ||||||||||||||||
Trade and other payables | 12,509 | — | 12,509 | |||||||||||||
Interest-bearing loans and borrowings | 8,939 | — | 8,939 | |||||||||||||
Employee benefits | 962 | — | 962 | |||||||||||||
Provisions | 300 | — | 300 | |||||||||||||
Total current liabilities | 22,710 | — | 22,710 | |||||||||||||
Non-current liabilities | ||||||||||||||||
Interest bearing loans and borrowings | 37,194 | — | 37,194 | |||||||||||||
Deferred tax liabilities | 4 | �� | 824 | (256 | ) | 568 | ||||||||||
Employee benefits | 3 | 567 | 157 | 724 | ||||||||||||
Provisions | 282 | — | 282 | |||||||||||||
Total non-current liabilities | 38,867 | (99 | ) | 38,768 | ||||||||||||
Total liabilities | 61,577 | (99 | ) | 61,478 | ||||||||||||
Net assets | 4,829 | (695 | ) | 4,134 | ||||||||||||
Equity | ||||||||||||||||
Issued capital | 4,550 | 4,550 | ||||||||||||||
Accumulated losses | 1-4,6 | (65 | ) | (351 | ) | (416 | ) | |||||||||
Reserves | 4 | 344 | (344 | ) | — | |||||||||||
Total equity attributable to equity holders of the parent | 4,829 | (695 | ) | 4,134 | ||||||||||||
F-53
Table of Contents
Restated | U.S. GAAP | |||||||||||||||
Note | AIFRS | Adjustments | U.S. GAAP | |||||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||||||
Assets | ||||||||||||||||
Cash and cash equivalents | 695 | — | 695 | |||||||||||||
Trade and other receivables | 7,876 | — | 7,876 | |||||||||||||
Inventories | 4,023 | — | 4,023 | |||||||||||||
Total current assets | 12,594 | — | 12,594 | |||||||||||||
Receivables | 839 | — | 839 | |||||||||||||
Investments accounted for using the equity method | 427 | — | 427 | |||||||||||||
Property, plant and equipment | 3,306 | — | 3,306 | |||||||||||||
Container hire fleet | 25,779 | — | 25,779 | |||||||||||||
Intangible assets | 6 | 4,207 | — | 4,207 | ||||||||||||
Total non-current assets | 34,558 | — | 34,558 | |||||||||||||
Total assets | 47,152 | — | 47,152 | |||||||||||||
Liabilities | ||||||||||||||||
Trade and other payables | 8,228 | — | 8,228 | |||||||||||||
Interest-bearing loans and borrowings | 2,778 | — | 2,778 | |||||||||||||
Employee benefits | 801 | — | 801 | |||||||||||||
Total current liabilities | 11,807 | — | 11,807 | |||||||||||||
Non-current liabilities | ||||||||||||||||
Interest bearing loans and borrowings | 30,175 | — | 30,175 | |||||||||||||
Deferred tax liabilities | 119 | — | 119 | |||||||||||||
Employee benefits | 3 | 227 | 110 | 337 | ||||||||||||
Provisions | 8 | — | 8 | |||||||||||||
Total non-current liabilities | 30,529 | 110 | 30,639 | |||||||||||||
Total liabilities | 42,336 | 110 | 42,446 | |||||||||||||
Net assets | 4,816 | (110 | ) | 4,706 | ||||||||||||
Equity | ||||||||||||||||
Issued capital | 4,550 | — | 4,550 | |||||||||||||
Retained profits | 3,6 | 266 | (110 | ) | 156 | |||||||||||
Total equity attributable to equity holders of the parent | 4,816 | (110 | ) | 4,706 | ||||||||||||
F-54
Table of Contents
Restated | U.S. GAAP | |||||||||||||||
Note | AIFRS | Adjustments | U.S. GAAP | |||||||||||||
A$’000 | A$’000 | A$’000 | ||||||||||||||
Assets | ||||||||||||||||
Cash and cash equivalents | 3 | — | 3 | |||||||||||||
Trade and other receivables | 7,024 | — | 7,024 | |||||||||||||
Inventories | 2,140 | — | 2,140 | |||||||||||||
Total current assets | 9,167 | — | 9,167 | |||||||||||||
Receivables | 1,194 | — | 1,194 | |||||||||||||
Investments accounted for using the equity method | 255 | — | 255 | |||||||||||||
Property, plant and equipment | 1,812 | — | 1,812 | |||||||||||||
Container hire fleet | 22,447 | — | 22,447 | |||||||||||||
Intangible assets | 6 | 4,515 | — | 4,515 | ||||||||||||
Total non-current assets | 30,223 | — | 30,223 | |||||||||||||
Total assets | 39,390 | — | 39,390 | |||||||||||||
Liabilities | ||||||||||||||||
Trade and other payables | 11,530 | — | 11,530 | |||||||||||||
Interest-bearing loans and borrowings | 1,425 | — | 1,425 | |||||||||||||
Current tax liability | 791 | — | 791 | |||||||||||||
Employee benefits | 444 | — | 444 | |||||||||||||
Total current liabilities | 14,190 | — | 14,190 | |||||||||||||
Non-current liabilities | ||||||||||||||||
Interest bearing loans and borrowings | 20,614 | — | 20,614 | |||||||||||||
Deferred tax liabilities | 119 | — | 119 | |||||||||||||
Employee benefits | 3 | 308 | 94 | 402 | ||||||||||||
Provisions | 8 | — | 8 | |||||||||||||
Total non-current liabilities | 21,049 | 94 | 21,143 | |||||||||||||
Total liabilities | 35,239 | 94 | 35,333 | |||||||||||||
Net assets | 4,151 | (94 | ) | 4,057 | ||||||||||||
Equity | ||||||||||||||||
Issued capital | 3,672 | — | 3,672 | |||||||||||||
Retained earnings | 3,6 | 479 | (94 | ) | 385 | |||||||||||
Total equity attributable to equity holders of the parent | 4,151 | (94 | ) | 4,057 | ||||||||||||
1. | Development expenditure |
F-55
Table of Contents
2. | Tax effect of U.S. GAAP adjustments |
3. | Share based payments expense |
4. | Step acquisition of Royal Wolf Hi-Tech |
5. | Reconciliation of cash flows |
F-56
Table of Contents
6. | Utilisation of deferred tax assets not recognised in a prior business combination |
28. | Subsequent events |
F-57
Table of Contents
F-58
Table of Contents
Restated | ||||||||
Note | 2003 | |||||||
AUD $ | ||||||||
Revenues from sale and rental of goods | 39,062,025 | |||||||
Other revenue | 4,579,061 | |||||||
Total Revenue | 2 | 43,641,086 | ||||||
Purchases of finished goods including movements in inventory | (14,977,167 | ) | ||||||
Employee expenses | (6,270,525 | ) | ||||||
Container repair costs | (3,742,995 | ) | ||||||
Repositioning, transport and storage costs | (3,170,501 | ) | ||||||
Leasing expenses | (1,722,047 | ) | ||||||
Borrowing costs | 3 | (2,198,074 | ) | |||||
Depreciation and amortisation expenses | 3 | (2,468,571 | ) | |||||
CSC yard costs | (1,189,385 | ) | ||||||
Office rent, supplies and training costs | (794,518 | ) | ||||||
Travel expenses | (505,581 | ) | ||||||
Advertising expenses | (514,834 | ) | ||||||
Communication expenses | (388,456 | ) | ||||||
Professional fees | (334,671 | ) | ||||||
Data processing expenses | (350,429 | ) | ||||||
Other expenses from ordinary activities | (522,016 | ) | ||||||
Correction of fundamental errors | 24 | (1,634,440 | ) | |||||
Share of net profits of investment accounted for using the equity method | 11 | 66,500 | ||||||
Profit from ordinary activities before related income tax expense | 2,923,376 | |||||||
Income tax charge relating to ordinary activities | (1,085,932 | ) | ||||||
Correction of income tax related fundamental errors | 24 | 773,077 | ||||||
Total income tax expense relating to ordinary activities | 5 | (a) | (312,855 | ) | ||||
Net profit | 2,610,521 | |||||||
F-59
Table of Contents
Restated | ||||||||
Note | 2003 | |||||||
AUD $ | ||||||||
Current assets | ||||||||
Cash assets | 6 | 1,788,171 | ||||||
Receivables | 7 | 5,204,625 | ||||||
Inventories | 8 | 3,879,561 | ||||||
Other | 9 | 1,206,013 | ||||||
Total current assets | 12,078,370 | |||||||
Non-current assets | ||||||||
Property, plant & equipment | 10 | 19,547,044 | ||||||
Deferred tax assets | 5 | (c) | 942,348 | |||||
Investments accounted for using the equity method | 11 | 162,500 | ||||||
Intangible assets | 12 | 1,475,517 | ||||||
Other non current assets | 13 | 710,849 | ||||||
Total non-current assets | 22,838,258 | |||||||
Total assets | 34,916,628 | |||||||
Current liabilities | ||||||||
Payables | 14 | 9,850,866 | ||||||
Interest bearing liabilities | 15 | 788,297 | ||||||
Current tax liabilities | 793,793 | |||||||
Provisions | 16 | 582,051 | ||||||
Total current liabilities | 12,015,007 | |||||||
Non-current liabilities | ||||||||
Interest bearing liabilities | 15 | 15,437,785 | ||||||
Deferred tax liabilities | 5 | (b) | 942,348 | |||||
Provisions | 16 | 133,522 | ||||||
Total non-current liabilities | 16,513,655 | |||||||
Total liabilities | 28,528,662 | |||||||
Net assets | 6,387,966 | |||||||
Equity | ||||||||
Contributed equity | 17 | 6,035,409 | ||||||
Retained earnings | 18 | 352,557 | ||||||
Total equity | 6,387,966 | |||||||
F-60
Table of Contents
Restated | ||||||||
Note | 2003 | |||||||
AUD $ | ||||||||
Cash flows from operating activities | ||||||||
Cash receipts in the course of operations | 38,227,988 | |||||||
Cash payments in the course of operations | (25,430,781 | ) | ||||||
Interest received | 36,774 | |||||||
Borrowing costs paid | (2,198,074 | ) | ||||||
Net cash provided by operating activities | 21 | 10,635,907 | ||||||
Cash flows from investing activities | ||||||||
Proceeds on disposal of non current assets | 87,227 | |||||||
Payments for property plant and equipment | (12,482,892 | ) | ||||||
Net cash used in investing activities | (12,395,665 | ) | ||||||
Cash flows from financing activities | ||||||||
Finance lease payments | (5,330,080 | ) | ||||||
Loan and promissory note repayments | (5,995,202 | ) | ||||||
Proceeds from new borrowings | 14,535,753 | |||||||
Loan establishment costs | (450,849 | ) | ||||||
Net cash provided by financing activities | 2,759,622 | |||||||
Net increase in cash held | 999,864 | |||||||
Cash at beginning of year | 788,307 | |||||||
Cash at end of year | 6 | 1,788,171 | ||||||
F-61
Table of Contents
1. | Statement of significant accounting policies |
F-62
Table of Contents
Life | Method | |||
Plant and equipment | 3 - 10 years | straight line | ||
Motor vehicles | 3 - 10 years | straight line | ||
Furniture and fittings | 5 - 10 years | straight line | ||
Containers on hire | 10 years | straight line (20% residual) | ||
Leased containers on hire (used) | 10 years | straight line (20% residual) | ||
Leased containers on hire (new) | 25 years | straight line (20% residual) |
F-63
Table of Contents
F-64
Table of Contents
Restated | ||||||||
Note | 2003 | |||||||
$ | ||||||||
2. Revenue from ordinary activities | ||||||||
Sale of goods revenue from operating activities | 25,972,618 | |||||||
Rental of goods revenue from operating activities | 13,089,407 | |||||||
39,062,025 | ||||||||
Other revenues: | ||||||||
From operating activities | ||||||||
Interest | 36,774 | |||||||
From outside operating activities | ||||||||
Gross proceeds from sale of non current assets | 87,227 | |||||||
Net foreign currency gain | 4,455,060 | |||||||
Total revenues from other activities | 4,579,061 | |||||||
Total revenue | 43,641,086 | |||||||
3. Profit from ordinary activities before income tax expense | ||||||||
a) Individually significant revenues / (expenses) included in profit from ordinary activities before income tax expense | ||||||||
Net foreign currency gain | 4,455,060 | |||||||
Correction of fundamental errors | 24 | (1,634,440 | ) | |||||
b) Profit from ordinary activities before income tax expense has been arrived at after charging/(crediting) the following items | ||||||||
Depreciation of property, plant and equipment | 2,361,795 | |||||||
Amortisation of goodwill | 106,776 | |||||||
Borrowing Costs | 2,198,074 | |||||||
Employee leave entitlements | 341,442 | |||||||
Movement in inventory provision | 148,444 | |||||||
Movement in provision for doubtful debts | (67,620 | ) | ||||||
Net gain on disposal of property, plant and equipment | 3,180 | |||||||
Net foreign currency gain | (4,455,060 | ) | ||||||
Correction of fundamental errors | 24 | 1,634,440 | ||||||
4. Auditor’s remuneration | ||||||||
Auditors of the company — KPMG: | ||||||||
Audit services | 60,000 | |||||||
Taxation services | 112,616 | |||||||
Other services | 4,000 | |||||||
176,616 | ||||||||
F-65
Table of Contents
Restated | ||||||||
Note | 2003 | |||||||
$ | ||||||||
5. Taxation | ||||||||
a) Income tax expense | ||||||||
Prima facie income tax expense calculated at 30% on the profit from ordinary activities | (877,013 | ) | ||||||
Decrease in income tax benefit due to: | ||||||||
Amortisation of goodwill | (32,033 | ) | ||||||
Sundry items | (158,750 | ) | ||||||
Prior year under provision | (18,136 | ) | ||||||
Income tax expense relating to ordinary activities before correction of fundamental errors | (1,085,932 | ) | ||||||
Correction of income tax related fundamental errors — current year | 24 | (ii) | (138,842 | ) | ||||
— prior year | 24 | (i) | 48,840 | |||||
— prior year | 24 | (ii) | 863,079 | |||||
773,077 | ||||||||
Total income tax expense relating to ordinary activities | (312,855 | ) | ||||||
b) Deferred tax liabilities | ||||||||
Provision for deferred income tax | ||||||||
Provision for deferred income tax comprises the estimated expense at the applicable rate of 30% on the following items: | ||||||||
Difference in depreciation and amortisation of property, plant and equipment for accounting and income tax purposes | 942,348 | |||||||
942,348 | ||||||||
c) Deferred tax assets | ||||||||
Future income tax benefit | ||||||||
Future income tax benefit comprises the estimated future benefit at the applicable rate of 30% on the following items: | ||||||||
Unrealised exchange losses not currently deductible | 36,227 | |||||||
Provisions and accrued employee entitlements not currently deductible | 449,032 | |||||||
Withholding tax accrual | 530,405 | |||||||
Sundry items | 65,526 | |||||||
Deferred tax assets not recognized | (138,842 | ) | ||||||
942,348 | ||||||||
6. Cash assets | ||||||||
Cash at bank and on hand | 1,788,171 | |||||||
F-66
Table of Contents
Restated | ||||||||
Note | 2003 | |||||||
$ | ||||||||
7. Receivables | ||||||||
Current | ||||||||
Trade debtors | 5,109,138 | |||||||
Provision for doubtful trade debtors | (129,594 | ) | ||||||
4,979,544 | ||||||||
Other debtors | 40,270 | |||||||
Receivables from related entities | 184,811 | |||||||
5,204,625 | ||||||||
8. Inventories | ||||||||
Stock on hand | 3,998,561 | |||||||
Provision for diminution in value | (119,000 | ) | ||||||
3,879,561 | ||||||||
9. Other current assets | ||||||||
Prepayments | 424,537 | |||||||
Income tax receivable | 24 | 781,476 | ||||||
1,206,013 | ||||||||
10. Property, plant and equipment | ||||||||
Plant and equipment | ||||||||
At cost | 3,055,315 | |||||||
Accumulated depreciation | (1,105,041 | ) | ||||||
1,950,274 | ||||||||
Motor Vehicles | ||||||||
At cost | 286,972 | |||||||
Accumulated depreciation | (141,920 | ) | ||||||
145,052 | ||||||||
Owned containers on hire | ||||||||
At cost | 19,517,682 | |||||||
Accumulated depreciation | (3,549,454 | ) | ||||||
15,968,228 | ||||||||
Leased containers on hire | ||||||||
At cost | 1,600,307 | |||||||
Accumulated depreciation | (116,817 | ) | ||||||
1,483,490 | ||||||||
Total property, plant and equipment | 19,547,044 | |||||||
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Restated | ||||||||
Note | 2003 | |||||||
$ | ||||||||
Reconciliations | ||||||||
Reconciliations of the carrying amounts for each class of plant and equipment are set out below: | ||||||||
Plant and equipment | ||||||||
Carrying amount at beginning of year | 893,507 | |||||||
Additions | 1,588,247 | |||||||
Disposals | (57,271 | ) | ||||||
Depreciation | (474,209 | ) | ||||||
Carrying amount at end of year | 1,950,274 | |||||||
Motor vehicles | ||||||||
Carrying amount at beginning of year | 131,985 | |||||||
Additions | 117,649 | |||||||
Disposals | (26,776 | ) | ||||||
Depreciation | (77,806 | ) | ||||||
Carrying amount at end of year | 145,052 | |||||||
Owned containers on hire | ||||||||
Carrying amount at beginning of year | 3,937,150 | |||||||
Additions | 7,461,995 | |||||||
Transfers from leased containers | 7,591,395 | |||||||
Transfers to inventory | (2,402,226 | ) | ||||||
Depreciation | (620,086 | ) | ||||||
Carrying amount at end of year | 15,968,228 | |||||||
Leased containers on hire | ||||||||
Carrying amount at beginning of year | 7,493,597 | |||||||
Additions | 3,315,001 | |||||||
Transfers to owned containers | (7,591,395 | ) | ||||||
Transfers to inventory | (544,019 | ) | ||||||
Depreciation | (1,189,694 | ) | ||||||
Carrying amount at end of year | 1,483,490 | |||||||
11. Investments accounted for using the equity method | ||||||||
The company has a 50% interest in Royal Wolf Hi-Tech Pty Limited, (the “Associate”) being a company that sells, hires and modifies shipping containers. Royal Wolf Hi-Tech Pty limited has a balance date of 30 June | ||||||||
Results of Associate | ||||||||
The company’s share of the Associate’s result consists of: | ||||||||
Revenue from ordinary activities | 1,056,578 | |||||||
Expenses from ordinary activities | (990,078 | ) | ||||||
Net profit — accounted for using the equity method | 66,500 |
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Restated | ||||||||
Note | 2003 | |||||||
$ | ||||||||
Movements in carrying amount of investment | ||||||||
Carrying amount of investments in Associates at beginning of year | 96,000 | |||||||
Share of Associates’ net profit | 66,500 | |||||||
Dividends received from Associate | — | |||||||
Carrying amount of investments in Associates at end of year | 162,500 | |||||||
The Associate has no future commitments for capital expenditure | ||||||||
12. Intangible assets | ||||||||
Goodwill: | ||||||||
At cost | 2,135,528 | |||||||
Accumulated amortization | (660,011 | ) | ||||||
1,475,517 | ||||||||
13. Other non-current assets | ||||||||
Loan to related party | 260,000 | |||||||
Loan establishment costs | ||||||||
At cost | 450,849 | |||||||
Accumulated amortisation | — | |||||||
450,849 | ||||||||
710,849 | ||||||||
14. Payables | ||||||||
Trade creditors | 6,004,574 | |||||||
Accruals | 3,441,646 | |||||||
Unearned income | 404,646 | |||||||
9,850,866 | ||||||||
15. Interest bearing liabilities | ||||||||
Current | ||||||||
Bank loan | 540,000 | |||||||
Other loan | 113,928 | |||||||
Lease liability | 134,369 | |||||||
788,297 | ||||||||
Non-current | ||||||||
Bank loan | 12,040,000 | |||||||
Other loan — parent entity | 1,955,753 | |||||||
Lease liability | 1,442,032 | |||||||
15,437,785 | ||||||||
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Restated | ||||||||
Note | 2003 | |||||||
$ | ||||||||
Financing arrangements | ||||||||
Facilities available at balance date | ||||||||
Finance leases | 4,576,401 | |||||||
Secured bank loans | 13,500,000 | |||||||
18,076,401 | ||||||||
Facilities utilised at reporting date | ||||||||
Finance leases | 1,576,401 | |||||||
Secured bank loans | 12,580,000 | |||||||
14,156,401 | ||||||||
Facilities not utilised at reporting date | ||||||||
Finance leases | 3,000,000 | |||||||
Secured bank loans | 920,000 | |||||||
3,920,000 |
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16. | Provisions |
Restated | ||||||||
Note | 2003 | |||||||
$ | ||||||||
Current | ||||||||
Employee entitlements | 582,051 | |||||||
Non current | ||||||||
Employee entitlements | 133,522 | |||||||
Employee entitlements have been calculated using the following weighted averages | ||||||||
Assumed rate of increase in wages and salary rates | 10 | % | ||||||
Settlement term (years) | 5 |
17. | Contributed equity |
Restated | ||||||||
Note | 2003 | |||||||
$ | ||||||||
Share capital | ||||||||
6,035,409 fully paid ordinary shares | 6,035,409 | |||||||
18. | Retained earnings |
Accumulated losses at beginning of year | (2,257,964 | ) | ||||||
Net profit before correction of prior year fundamental errors | 24 | 3,333,042 | ||||||
Correction of prior year fundamental errors | 24 | (722,521 | ) | |||||
Retained earnings at end of year | 352,557 | |||||||
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19. | Commitments |
Finance lease commitments are payable: | ||||||||
Within one year | 313,170 | |||||||
One year or later and no later than five years | 1,980,487 | |||||||
2,293,657 | ||||||||
Less: Future lease finance charges | (717,256 | ) | ||||||
1,576,401 | ||||||||
Lease liabilities provided for in the financial statements: | ||||||||
Current | 15 | 134,369 | ||||||
Non-current | 15 | 1,442,032 | ||||||
Total lease liability | 1,576,401 |
Future operating lease commitments not provided for in the financial statements and payable: | ||||
Within one year | 2,291,952 | |||
One year or later and no later than five years | 695,825 | |||
2,987,777 | ||||
Future operating lease rentals receivable: | ||||
Within one year | 1,221,685 | |||
One year or later and no later than five years | — | |||
1,221,685 | ||||
20. | Segment reporting |
F-72
Table of Contents
Restated | ||||
2003 | ||||
$ | ||||
21. Notes to the statement of cash flows | ||||
a) Reconciliation of cash | ||||
For the purpose of the statement of cash flows, cash includes cash on hand and at bank. Cash as at the end of the financial year is reconciled to the related items in the statement of financial position as follows: | ||||
Cash on hand and at bank | 1,788,171 | |||
b) Reconciliation of net profit from ordinary activities after income tax to net cash provided by operating activities: | ||||
Net profit | 2,610,521 | |||
Add/(less) non cash items: | ||||
Net gain on disposal of property, plant and equipment | (3,180 | ) | ||
Amortisation | 106,776 | |||
Depreciation | 2,361,795 | |||
Share of Associates’ net profit | (66,500 | ) | ||
Unrealised exchange gain | (120,755 | ) | ||
Net cash provided by operating activities before change in assets and liabilities | 4,888,657 | |||
Changes in assets and liabilities: | ||||
Decrease in current receivables | 134,818 | |||
Decrease in current inventories | 1,554,400 | |||
Increase in other assets | (232,631 | ) | ||
Increase in deferred tax assets | (229,288 | ) | ||
Increase in payables | 3,647,993 | |||
Increase in income taxes payable | 793,793 | |||
Decrease in deferred tax liabilities | (241,432 | ) | ||
Increase in provisions for employee entitlements | 319,597 | |||
Net cash provided by operating activities | 10,635,907 | |||
22. | Related parties |
Mr. Michael Baxter
Mr. Robert Carey
Mr. Norman Fricker
Mr. Randolph Gilbert
Mr. Richard Gregson
Mr. Paul Jeffery
Mr. Peter Johnson
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Mr. James Warren
2003 | ||||
No. | ||||
$ 0 - $ 9,999 | 5 | |||
$ 10,000 - $ 19,999 | 1 | |||
$ 70,000 - $ 79,999 | 1 | |||
$150,000 - $159,999 | 1 | |||
$320,000 - $329,999 | 1 | |||
$350,000 - $359,999 | 1 | |||
Total income paid or payable to all Directors from the company or any related party | $ | 908,879 | ||
Number Held | ||||
2003 | ||||
Ordinary shares | Nil |
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23. | Foreign currencies |
24. | Fundamental errors |
2003 | ||||
$ | ||||
Restated | ||||
Profit from ordinary activities before related income tax expense | 4,557,816 | |||
Total income tax expense relating to ordinary activities before effect of errors | (1,085,932 | ) | ||
Correction of fundamental error relating to current year taxation charge (see (ii) above) | (138,842 | ) | ||
Restated income tax charge relating to ordinary activities | (1,224,774 | ) | ||
Net profit from ordinary activities after income tax expense attributable to members of the company | 3,333,042 | |||
Accumulated losses at beginning of year — as previously reported | (2,257,964 | ) | ||
Correction of withholding tax on lease arrangements, net of $48,840 of tax (see (i) above) | (1,585,600 | ) | ||
Correction of opening deferred tax liability (see (ii) above) | 863,079 | |||
Correction of fundamental errors, net of tax | (722,521 | ) | ||
Restated accumulated losses at beginning of year | (2,980,485 | ) | ||
Restated net profit from ordinary activities after income tax expense | 3,333,042 | |||
Restated retained earnings at end of year | 352,557 | |||
Total equity | 6,387,966 | |||
25. | Reconciliation to U.S. GAAP |
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31 December | ||||
2003 | ||||
A$ | ||||
Net profit after tax under AGAAP (restated) | 2,610,521 | |||
Correction of prior period errors (net of tax) | 722,521 | |||
Amortisation of goodwill | 106,776 | |||
Straight lining of leases | (372 | ) | ||
Net income under U.S. GAAP | 3,439,446 | |||
31 December | ||||
2003 | ||||
A$ | ||||
Total equity under AGAAP (restated) | 6,387,966 | |||
Amortisation of goodwill | 213,553 | |||
Goodwill and intangible asset adjustments through impact of push-down accounting | (829,519 | ) | ||
Straight lining of leases | (5,310 | ) | ||
Shareholders’ equity under U.S. GAAP | 5,766,690 | |||
31 December | ||||
2003 | ||||
A$ | ||||
Opening shareholders’ equity at 1 January 2003 under U.S. GAAP | 2,327,244 | |||
Net income under U.S. GAAP | 3,439,446 | |||
Closing shareholders’ equity at 31 December 2003 | 5,766,690 | |||
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Restated | U.S. GAAP | |||||||||||||||
Note | AGAAP | Adjustments | U.S. GAAP | |||||||||||||
A$ | A$ | A$ | ||||||||||||||
Revenues from sale and rental of goods | 39,062,025 | — | 39,062,025 | |||||||||||||
Other revenue | 4,579,061 | — | 4,579,061 | |||||||||||||
Total Revenue | 43,641,086 | — | 43,641,086 | |||||||||||||
Purchases of finished goods including movements in inventory | (14,977,167 | ) | — | (14,977,167 | ) | |||||||||||
Employee expenses | (6,270,525 | ) | — | (6,270,525 | ) | |||||||||||
Container repair costs | (3,742,995 | ) | — | (3,742,995 | ) | |||||||||||
Repositioning, transport and storage costs | (3,170,501 | ) | — | (3,170,501 | ) | |||||||||||
Leasing expenses | (1,722,047 | ) | (372 | ) | (1,722,419 | ) | ||||||||||
Borrowing costs | (2,198,074 | ) | — | (2,198,074 | ) | |||||||||||
Depreciation and amortisation expenses | (2,468,571 | ) | 106,776 | (2,361,795 | ) | |||||||||||
CSC yard costs | (1,189,385 | ) | — | (1,189,385 | ) | |||||||||||
Office rent, supplies and training costs | (794,518 | ) | — | (794,518 | ) | |||||||||||
Travel expenses | (505,581 | ) | — | (505,581 | ) | |||||||||||
Advertising expenses | (514,834 | ) | — | (514,834 | ) | |||||||||||
Communication expenses | (388,456 | ) | — | (388,456 | ) | |||||||||||
Professional fees | (334,671 | ) | — | (334,671 | ) | |||||||||||
Data processing expenses | (350,429 | ) | — | (350,429 | ) | |||||||||||
Other expenses from ordinary activities | (522,016 | ) | — | (522,016 | ) | |||||||||||
Correction of fundamental errors | (1,634,440 | ) | 1,634,440 | — | ||||||||||||
Share of net profits of investment accounted for using the equity method | 66,500 | — | 66,500 | |||||||||||||
Profit from ordinary activities before related income tax expense | 2,923,376 | 1,740,844 | 4,664,220 | |||||||||||||
Income tax charge relating to ordinary activities | (1,085,932 | ) | (138,842 | ) | (1,224,774 | ) | ||||||||||
Correction of income tax related fundamental errors | 773,077 | (773,077 | ) | — | ||||||||||||
Total income tax expense relating to ordinary activities | (312,855 | ) | (911,919 | ) | (1,224,774 | ) | ||||||||||
Net profit | 2,610,521 | 828,925 | 3,439,446 | |||||||||||||
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Restated | U.S. GAAP | |||||||||||
AGAAP | Adjustments | U.S. GAAP | ||||||||||
A$ | A$ | A$ | ||||||||||
Current assets | ||||||||||||
Cash assets | 1,788,171 | — | 1,788,171 | |||||||||
Receivables | 5,204,625 | — | 5,204,625 | |||||||||
Inventories | 3,879,561 | — | 3,879,561 | |||||||||
Other | 1,206,013 | — | 1,206,013 | |||||||||
Total current assets | 12,078,370 | — | 12,078,370 | |||||||||
Non-current assets | ||||||||||||
Property, plant & equipment | 19,547,044 | — | 19,547,044 | |||||||||
Deferred tax assets | 942,348 | (942,348 | ) | — | ||||||||
Investments accounted for using the equity method | 162,500 | — | 162,500 | |||||||||
Intangible assets | 1,475,517 | (496,566 | ) | 978,951 | ||||||||
Other non current assets | 710,849 | (185,225 | ) | 525,624 | ||||||||
Total non-current assets | 22,838,258 | (1,624,139 | ) | 21,214,119 | ||||||||
Total assets | 34,916,628 | (1,624,139 | ) | 33,292,489 | ||||||||
Current liabilities | ||||||||||||
Payables | 9,850,866 | 5,310 | 9,856,176 | |||||||||
Interest bearing liabilities | 788,297 | — | 788,297 | |||||||||
Current tax liabilities | 793,793 | — | 793,793 | |||||||||
Provisions | 582,051 | — | 582,051 | |||||||||
Total current liabilities | 12,015,007 | 5,310 | 12,020,317 | |||||||||
Non-current liabilities | ||||||||||||
Interest bearing liabilities | 15,437,785 | (185,225 | ) | 15,252,560 | ||||||||
Deferred tax liabilities | 942,348 | (822,948 | ) | 119,400 | ||||||||
Provisions | 133,522 | — | 133,522 | |||||||||
Total non-current liabilities | 16,513,655 | (1,008,173 | ) | 15,505,482 | ||||||||
Total liabilities | 28,528,662 | (1,002,863 | ) | 27,525,799 | ||||||||
Net assets | 6,387,966 | (621,276 | ) | 5,766,690 | ||||||||
Equity | ||||||||||||
Contributed equity | 6,035,409 | 6,035,409 | ||||||||||
Retained profits/(accumulated losses) | 352,557 | (621,276 | ) | (268,719 | ) | |||||||
Total equity | 6,387,966 | (621,276 | ) | 5,766,690 | ||||||||
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26. | Events subsequent to balance date |
F-79
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F-80
Table of Contents
TO THE PARTNERS OF
AUSTRALIAN CONTAINER NETWORK PTY LTD AS NOMINEE FOR ACN PARTNERSHIP
A R FITZPATRICK
Partner | Melbourne | 20 February 2007 |
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Table of Contents
FOR THE YEAR ENDED 30 JUNE 2005
FOR THE NINE MONTHS ENDED | ||||||||||||||||||||
MARCH 31, | ||||||||||||||||||||
2006 | 2005 | 2005 | 2004 | |||||||||||||||||
$ | $ | Notes | $ | $ | ||||||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||||||
Revenue | ||||||||||||||||||||
Sales revenue | 2,124,550 | 1,939,861 | 2 | 2,671,720 | 2,332,870 | |||||||||||||||
Other income | 1,441,418 | 1,260,519 | 2 | 1,645,738 | 1,464,086 | |||||||||||||||
3,565,968 | 3,200,380 | 4,317,458 | 3,796,956 | |||||||||||||||||
Cost of Sales | (2,493,091 | ) | (2,329,436 | ) | (3,103,609 | ) | (2,708,745 | ) | ||||||||||||
Marketing expenses | (43,105 | ) | (32,663 | ) | (40,048 | ) | (27,206 | ) | ||||||||||||
Administrative expenses | (580,584 | ) | (494,638 | ) | (742,906 | ) | (624,211 | ) | ||||||||||||
Other expenses | (123,976 | ) | (77,155 | ) | (102,376 | ) | (136,194 | ) | ||||||||||||
(3,240,756 | ) | (2,933,892 | ) | (3,988,939 | ) | (3,496,356 | ) | |||||||||||||
Finance costs | (63,754 | ) | (36,800 | ) | 3 | (104,196 | ) | (40,065 | ) | |||||||||||
Profit before income tax expense | 261,458 | 229,688 | 224,323 | 260,535 | ||||||||||||||||
Income tax | — | — | 1 | (i) | — | — | ||||||||||||||
Profit from continuing operations | 261,458 | 229,688 | 224,323 | 260,535 | ||||||||||||||||
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AS AT 30 JUNE 2005
AS AT | ||||||||||||||||
MARCH 31, | ||||||||||||||||
2006 | 2005 | 2004 | ||||||||||||||
$ | Notes | $ | $ | |||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||
CURRENT ASSETS | ||||||||||||||||
Cash and cash equivalents | 200 | 4 | 100 | 19,379 | ||||||||||||
Trade receivables | 759,109 | 5 | 457,712 | 417,560 | ||||||||||||
Inventories | 390,529 | 6 | 754,245 | 365,248 | ||||||||||||
Other | 26,906 | 29,848 | 29,162 | |||||||||||||
TOTAL CURRENT ASSETS | 1,176,744 | 1,241,905 | 831,349 | |||||||||||||
NON-CURRENT ASSETS | ||||||||||||||||
Receivables | 1,323 | 5 | 1,323 | 1,323 | ||||||||||||
Financial assets at cost | 4 | 7 | 4 | 4 | ||||||||||||
Plant and equipment | 1,865,982 | 8 | 1,361,360 | 1,113,328 | ||||||||||||
Intangible assets | 1,039 | 9 | 18,048 | 18,048 | ||||||||||||
TOTAL NON-CURRENT ASSETS | 1,868,348 | 1,380,735 | 1,132,703 | |||||||||||||
TOTAL ASSETS | 3,045,092 | 2,622,640 | 1,964,052 | |||||||||||||
CURRENT LIABILITIES | ||||||||||||||||
Trade and other payables | 348,774 | 10 | 528,412 | 452,559 | ||||||||||||
Short term borrowings | 903,118 | 11 | 717,142 | 342,668 | ||||||||||||
Provisions | 28,496 | 12 | 30,313 | 25,744 | ||||||||||||
TOTAL CURRENT LIABILITIES | 1,280,388 | 1,275,867 | 820,971 | |||||||||||||
NON-CURRENT LIABILITIES | ||||||||||||||||
Long term borrowings | 987,937 | 11 | 726,124 | 564,259 | ||||||||||||
Provisions | — | 12 | 29,875 | 20,991 | ||||||||||||
TOTAL NON-CURRENT LIABILITIES | 987,937 | 755,999 | 585,250 | |||||||||||||
TOTAL LIABILITIES | 2,268,325 | 2,031,866 | 1,406,221 | |||||||||||||
NET ASSETS | 776,767 | 590,774 | 557,831 | |||||||||||||
PARTNERS’ FUNDS | ||||||||||||||||
Current accounts | 776,767 | 14 | 590,774 | 557,831 | ||||||||||||
TOTAL PARTNERS’ FUNDS | 776,767 | 590,774 | 557,831 | |||||||||||||
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Table of Contents
FOR THE YEAR ENDED 30 JUNE 2005
FOR THE NINE MONTHS | ||||||||||||||||||||
ENDED MARCH 31, | ||||||||||||||||||||
2006 | 2005 | 2005 | 2004 | |||||||||||||||||
$ | $ | Notes | $ | $ | ||||||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||||||
CASH FLOW FROM OPERATING ACTIVITIES | ||||||||||||||||||||
Receipts from customers | 3,589,241 | 3,527,964 | 4,599,569 | 4,000,642 | ||||||||||||||||
Payments to suppliers and employees | (2,433,450 | ) | (2,821,295 | ) | (3,751,418 | ) | (3,291,005 | ) | ||||||||||||
Interest Paid | (33,971 | ) | (26,016 | ) | (104,196 | ) | (40,065 | ) | ||||||||||||
Net cash provided by operating activities | 1,121,820 | 680,653 | 19 | (b) | 743,955 | 669,572 | ||||||||||||||
CASH FLOW FROM INVESTING ACTIVITIES | ||||||||||||||||||||
Proceeds from sale of plant and equipment | — | 163,540 | 313,443 | 418,088 | ||||||||||||||||
Payment for plant and equipment | (890,832 | ) | (439,344 | ) | (908,950 | ) | (614,169 | ) | ||||||||||||
Net cash used in investing activities | (890,832 | ) | (275,804 | ) | (595,507 | ) | (196,081 | ) | ||||||||||||
CASH FLOW FROM FINANCING ACTIVITIES | ||||||||||||||||||||
(Increase)/decrease in loans to directors | 78,638 | 83,249 | 68,342 | 19,333 | ||||||||||||||||
Repayment of borrowings/Lease repayments | (301,606 | ) | (286,809 | ) | (35,758 | ) | (385,935 | ) | ||||||||||||
Partnership distributions paid | (226,520 | ) | (229,688 | ) | (224,323 | ) | (260,535 | ) | ||||||||||||
Net cash used in financing activities | (449,488 | ) | (433,248 | ) | (191,739 | ) | (627,137 | ) | ||||||||||||
Net decrease in cash held | (218,500 | ) | (28,399 | ) | (43,291 | ) | (153,646 | ) | ||||||||||||
Cash at beginning of financial year | 51,227 | 79,626 | 19,379 | 173,025 | ||||||||||||||||
Cash at end of financial year | (167,273 | ) | 51,227 | 19 | (a) | (23,912 | ) | 19,379 | ||||||||||||
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F-85
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F-86
Table of Contents
Operating activities | ||||||||||||
- sale of goods | 2,671,720 | 2,332,870 | ||||||||||
- container hire revenue | 1,643,005 | 1,373,439 | ||||||||||
- interest | 2 | (a) | 603 | 3,720 | ||||||||
- other revenue | 2,130 | 86,927 | ||||||||||
Total Revenue | 4,317,458 | 3,796,956 | ||||||||||
(a) Interest from: | ||||||||||||
- other persons | 603 | 3,720 | ||||||||||
603 | 3,720 | |||||||||||
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Note | 2005 | 2004 | ||||||||||
Profit/(losses) before income tax has been determined after: | ||||||||||||
Expenses: | ||||||||||||
Interest paid: | ||||||||||||
- other persons | 59,883 | 40,065 | ||||||||||
Finance lease charges | 115,606 | 69,871 | ||||||||||
Total finance costs | 175,489 | 109,936 | ||||||||||
Depreciation of non-current assets | ||||||||||||
- Plant and equipment | 32,696 | 32,474 | ||||||||||
- Hire stock | 386,014 | 366,023 | ||||||||||
- Motor vehicles | 25,820 | 30,022 | ||||||||||
Amortisation of non-current assets: | ||||||||||||
- goodwill | — | 1,001 | ||||||||||
- Goodwill amortisation | — | 1,001 | ||||||||||
Bad debts: | ||||||||||||
- trade debtors | 22,501 | 12,281 | ||||||||||
- bad debts recovered | (1,744 | ) | (2,643 | ) | ||||||||
Bad and doubtful debts | 20,757 | 9,638 | ||||||||||
Rental expense on operating leases | ||||||||||||
- minimum lease payments | 71,293 | 69,871 | ||||||||||
Rental expense on operating leases | 71,293 | 69,871 | ||||||||||
Foreign currency translation losses (gains) | (386 | ) | (7,001 | ) | ||||||||
Net loss/(gain) on disposal of non-current assets | ||||||||||||
- Plant and equipment | (97,054 | ) | (139,514 | ) | ||||||||
Note | 2005 | 2004 | ||||||||||
Cash on hand | 100 | 100 | ||||||||||
Cash at bank | — | 19,279 | ||||||||||
100 | 19,379 | |||||||||||
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Note | 2005 | 2004 | ||||||||||
CURRENT | ||||||||||||
Trade debtors | 456,537 | 417,560 | ||||||||||
Other debtors | 1,175 | — | ||||||||||
457,712 | 417,560 | |||||||||||
NON-CURRENT | ||||||||||||
Amounts receivable from: | ||||||||||||
- associated companies | 1,323 | 1,323 | ||||||||||
NOTE 6: | INVENTORIES |
Note | 2005 | 2004 | ||||||||||
CURRENT | ||||||||||||
Work in progress at cost | 17,576 | — | ||||||||||
Finished goods at cost | 736,669 | 365,248 | ||||||||||
754,245 | 365,248 | |||||||||||
Note | 2005 | 2004 | ||||||||||
NON CURRENT | ||||||||||||
- Unlisted shares | 4 | 4 | ||||||||||
(a) Classification | ||||||||||||
The carrying amounts of the above financial assets are classified as follows: | ||||||||||||
Designated at fair value on initial recognition | 4 | 4 | ||||||||||
4 | 4 | |||||||||||
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Note | 2005 | 2004 | ||||||||||
Hire Container | ||||||||||||
At cost | 2,443,277 | 2,021,887 | ||||||||||
Less accumulated depreciation | (1,314,423 | ) | (1,074,189 | ) | ||||||||
1,128,854 | 947,698 | |||||||||||
Plant and Equipment | ||||||||||||
Plant and equipment | ||||||||||||
At cost | 166,813 | 91,560 | ||||||||||
Less accumulated depreciation | (78,588 | ) | (78,825 | ) | ||||||||
88,225 | 12,735 | |||||||||||
Motor vehicles | ||||||||||||
At cost | 227,772 | 196,616 | ||||||||||
Less accumulated depreciation | (112,874 | ) | (87,054 | ) | ||||||||
114,898 | 109,562 | |||||||||||
Office equipment | ||||||||||||
At cost | 14,515 | 16,189 | ||||||||||
Less accumulated depreciation | (6,325 | ) | (6,286 | ) | ||||||||
8,190 | 9,903 | |||||||||||
Computer equipment | ||||||||||||
At cost | 60,782 | 90,905 | ||||||||||
Less accumulated depreciation | (39,589 | ) | (57,475 | ) | ||||||||
21,193 | 33,430 | |||||||||||
Total plant and equipment | 1,361,360 | 1,113,328 | ||||||||||
Hire containers | Plant & equipment | Motor vehicles | Office equipment | |||||||||||||
2005 | $ | $ | $ | $ | ||||||||||||
Balance at the beginning of the year | 947,698 | 12,735 | 109,562 | 9,903 | ||||||||||||
Additions | 783,558 | 83,151 | 31,156 | 1,649 | ||||||||||||
Disposals | (216,389 | ) | — | — | — | |||||||||||
Depreciation expense | (386,014 | ) | (7,661 | ) | (25,820 | ) | (3,362 | ) | ||||||||
Carrying amount at end of year | 1,128,854 | 88,225 | 114,898 | 8,190 | ||||||||||||
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Computer equipment | Total | |||||||
2005 | $ | $ | ||||||
Balance at the beginning of the year | 33,430 | 1,113,328 | ||||||
Additions | 9,436 | 908,950 | ||||||
Disposals | — | (216,389 | ) | |||||
Depreciation expense | (21,673 | ) | (444,530 | ) | ||||
Carrying amount at the end of the year | 21,193 | 1,361,360 | ||||||
Note | 2005 | 2004 | ||||||||||
Goodwill at cost | 20,000 | 20,000 | ||||||||||
Less accumulated impairment losses | (2,991 | ) | (2,991 | ) | ||||||||
17,009 | 17,009 | |||||||||||
Formation costs at cost | 1,039 | 1,039 | ||||||||||
18,048 | 18,048 | |||||||||||
NOTE 10: | PAYABLES |
Note | 2005 | 2004 | ||||||||||
CURRENT | ||||||||||||
Unsecured liabilities | ||||||||||||
Trade creditors | 383,490 | 273,257 | ||||||||||
Sundry creditors and accruals | 144,922 | 179,302 | ||||||||||
528,412 | 452,559 | |||||||||||
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NOTE 11: | BORROWINGS |
Note | 2005 | 2004 | ||||||||||
CURRENT | ||||||||||||
Unsecured liabilities | ||||||||||||
Amounts payable to: | ||||||||||||
- partner related parties | 183,060 | 147,661 | ||||||||||
Secured liabilities | ||||||||||||
Bank overdrafts | 24,012 | — | ||||||||||
Bank loans | 210,591 | — | ||||||||||
Hire purchase liability | 13 | 299,479 | 195,007 | |||||||||
534,082 | 195,007 | |||||||||||
717,142 | 342,668 | |||||||||||
NON-CURRENT | ||||||||||||
Secured liabilities | ||||||||||||
Bank loans | 172,100 | 90,054 | ||||||||||
Hire purchase liability | 13 | 554,024 | 474,205 | |||||||||
726,124 | 564,259 | |||||||||||
NOTE 12: | PROVISIONS |
Note | 2005 | 2004 | ||||||||||
CURRENT | ||||||||||||
Employee benefits | (a | ) | 30,313 | 25,744 | ||||||||
NON-CURRENT | ||||||||||||
Employee benefits | (a | ) | 29,875 | 20,991 | ||||||||
(a) Aggregate employee benefits liability | 60,188 | 46,735 | ||||||||||
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Note | 2005 | 2004 | ||||||||||
(a) Hire purchase commitments | ||||||||||||
Payable | ||||||||||||
- not later than one year | 349,143 | 234,723 | ||||||||||
- later than one year and not later than five years | 604,687 | 517,968 | ||||||||||
Minimum hire purchase payments | 953,830 | 752,691 | ||||||||||
Less future finance charges | (100,327 | ) | (83,479 | ) | ||||||||
Total hire purchase liability | 853,503 | 669,212 | ||||||||||
Represented by: | ||||||||||||
Current liability | 11 | 299,479 | 195,007 | |||||||||
Non-current liability | 11 | 554,024 | 474,205 | |||||||||
853,503 | 669,212 | |||||||||||
(b) Operating lease commitments | ||||||||||||
Non-cancellable operating leases contracted for but not capitalised in the financial statements: | ||||||||||||
Payable | ||||||||||||
- not later than one year | 28,300 | 27,309 | ||||||||||
- later than one year and not later than five years | 68,481 | 8,864 | ||||||||||
96,781 | 36,173 | |||||||||||
NOTE 14: | PARTNERS’ FUNDS |
For the Nine | ||||||||||||
Months Ended | ||||||||||||
March 31, 2006 | ||||||||||||
(Unaudited) | ||||||||||||
Koleet Pty Ltd | ||||||||||||
Opening Balance | 253,350 | 224,399 | 137,554 | |||||||||
Share of profits | 87,153 | 74,774 | 86,845 | |||||||||
Drawings | (25,000 | ) | (45,823 | ) | — | |||||||
Closing Balance | 315,503 | 253,350 | 224,399 | |||||||||
Caraft Pty Ltd | ||||||||||||
Opening Balance | 113,844 | 135,049 | 48,204 | |||||||||
Share of profits | 87,153 | 74,774 | 86,845 | |||||||||
Drawings | (25,212 | ) | (95,979 | ) | — | |||||||
Closing Balance | 175,785 | 113,844 | 135,049 | |||||||||
Wellest Pty Ltd | ||||||||||||
Opening Balance | 223,580 | 198,384 | 111,539 | |||||||||
Share of profits | 87,152 | 74,775 | 86,845 | |||||||||
Drawings | (25,253 | ) | (49,579 | ) | — | |||||||
Closing Balance | 285,479 | 223,580 | 198,384 | |||||||||
776,767 | 590,774 | 557,832 | ||||||||||
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NOTE 15: | RECONCILIATION OF U.S. GAAP |
NOTE 16: | EVENTS SUBSEQUENT TO REPORTING DATE |
NOTE 17: | PARTNERSHIP DETAILS |
NOTE 18: | PARTNERS’ AND EXECUTIVES’ REMUNERATION |
Salary, fees and | ||||||||||||||||
2005 | non-monetary benefits | Super-annuation | Equity | TOTAL | ||||||||||||
PARTNERS | ||||||||||||||||
Sebastian Cavarra | 59,881 | 4,500 | — | 64,381 | ||||||||||||
Wendy Cavarra | 87,060 | 6,660 | — | 93,720 | ||||||||||||
Joe Kolenda | 57,476 | 4,500 | — | 61,976 | ||||||||||||
Peter Welsh | 57,476 | 4,500 | — | 61,976 | ||||||||||||
261,893 | 20,160 | — | 282,053 | |||||||||||||
Salary, fees and | ||||||||||||||||
2004 | non-monetary benefits | Super-annuation | Equity | TOTAL | ||||||||||||
PARTNERS | ||||||||||||||||
Sebastian Cavarra | 54,074 | 4,050 | — | 58,124 | ||||||||||||
Wendy Cavarra | 65,978 | 4,410 | — | 70,388 | ||||||||||||
Joe Kolenda | 54,441 | 4,050 | — | 58,491 | ||||||||||||
Peter Welsh | 51,276 | 4,050 | — | 55,326 | ||||||||||||
225,769 | 16,560 | — | 242,329 | |||||||||||||
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NOTE 19: | CASH FLOW INFORMATION |
For the Nine | ||||||||||||||||||||
Months Ended | ||||||||||||||||||||
March | March | |||||||||||||||||||
2006 | 2005 | 2005 | 2004 | |||||||||||||||||
$ | $ | Note | $ | $ | ||||||||||||||||
(Unaudited) | ||||||||||||||||||||
(a) Reconciliation of cash | ||||||||||||||||||||
For the purposes of the statement of cash flows, cash includes cash on hand and at call deposits with banks or financial institutions, investments in money market instruments maturing within less than two months and net of bank overdrafts. | ||||||||||||||||||||
Cash at the end of the financial year as shown in the statements of cash flows is reconciled to the related items in the statement of financial position as follows: | ||||||||||||||||||||
Cash on hand | 200 | 100 | 100 | 100 | ||||||||||||||||
Cash at bank | — | 51,127 | — | 19,279 | ||||||||||||||||
Bank overdrafts | (168,719 | ) | — | (24,012 | ) | — | ||||||||||||||
(168,519 | ) | 51,227 | (23,912 | ) | 19,379 | |||||||||||||||
(b) Reconciliation of cash flow from operations with profit from ordinary activities after income tax | ||||||||||||||||||||
Profit from ordinary activities after income tax | 261,458 | 229,688 | 224,323 | 260,535 | ||||||||||||||||
Non-cash flows in profit from ordinary activities Amortisation | — | — | — | 1,952 | ||||||||||||||||
Depreciation | 402,780 | 117,337 | 444,530 | 428,519 | ||||||||||||||||
Net (gain)/loss on disposal of property, plant and equipment | 20,000 | — | (97,054 | ) | (139,514 | ) | ||||||||||||||
Lease/HP charges | 8,619 | — | 78,980 | 66,783 | ||||||||||||||||
New leases entered into | 684,674 | 364,513 | 433,705 | 592,466 | ||||||||||||||||
Changes in assets and liabilities | ||||||||||||||||||||
Increase in receivables | (303,587 | ) | 13,871 | (38,977 | ) | (13,494 | ) | |||||||||||||
Increase in other assets | 9,579 | 445 | (1,861 | ) | (5,234 | ) | ||||||||||||||
Increase in inventories | 22,952 | (115,016 | ) | (388,997 | ) | (55,526 | ) | |||||||||||||
increase/(decrease) in payables | (13,151 | ) | 69,815 | 75,853 | (513,649 | ) | ||||||||||||||
Increase in provisions | 28,496 | — | 13,453 | 46,735 | ||||||||||||||||
Cash flows from operations | 1,121,820 | 680,653 | 743,955 | 669,573 | ||||||||||||||||
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NOTE 20: | FINANCIAL INSTRUMENTS |
Weighted | ||||||||||||||||||||
Floating | Fixed interest | Total carrying | average | |||||||||||||||||
interest | rate maturing in: | Non-interest | amount as per | effective | ||||||||||||||||
2005 | rate | Over 1 to 5 Years | bearing | the balance sheet | interest rate | |||||||||||||||
Financial Instruments | $ | $ | $ | $ | % | |||||||||||||||
(i) Financial assets | ||||||||||||||||||||
Cash | — | — | 100 | 100 | — | |||||||||||||||
Trade and other receivables | — | — | 457,712 | 457,712 | — | |||||||||||||||
Receivables — other related parties | — | — | 1,323 | 1,323 | — | |||||||||||||||
Unlisted shares | — | — | 4 | 4 | — | |||||||||||||||
Total financial assets | — | — | 459,139 | 459,139 | ||||||||||||||||
Weighted | ||||||||||||||||||||
Floating | Fixed interest | Total carrying | average | |||||||||||||||||
interest | rate maturing in: | Non-interest | amount as per | effective | ||||||||||||||||
2005 | rate | Over 1 to 5 Years | bearing | the balance sheet | interest rate | |||||||||||||||
Financial Instruments | $ | $ | $ | $ | % | |||||||||||||||
(ii) Financial liabilities | ||||||||||||||||||||
Bank overdraft | 24,012 | — | — | 24,012 | 12.1 | |||||||||||||||
Trade creditors | — | — | 383,490 | 383,490 | — | |||||||||||||||
Other creditors | — | — | 8,238 | 8,238 | — | |||||||||||||||
Bank and other loans | 382,691 | — | — | 382,691 | 8.3 | |||||||||||||||
Payable — director & director related parties | — | 183,060 | — | 183,060 | 15.0 | |||||||||||||||
Hire purchase | — | — | 853,503 | 853,503 | 7.7 | |||||||||||||||
Total financial liabilities | 406,703 | 183,060 | 1,245,231 | 1,834,994 | ||||||||||||||||
Weighted | ||||||||||||||||||||
Floating | Fixed interest | Total carrying | average | |||||||||||||||||
interest | rate maturing in: | Non-interest | amount as per | effective | ||||||||||||||||
2004 | rate | Over 1 to 5 Years | bearing | the balance sheet | interest rate | |||||||||||||||
Financial Instruments | $ | $ | $ | $ | % | |||||||||||||||
(iii) Financial assets | ||||||||||||||||||||
Cash | 19,279 | — | 100 | 19,379 | 11.9 | |||||||||||||||
Trade and other receivables | — | — | 417,560 | 417,560 | — | |||||||||||||||
Receivables — other related parties | — | — | 1,323 | 1,323 | — | |||||||||||||||
Unlisted shares | — | — | 4 | 4 | — | |||||||||||||||
Total financial assets | 19,279 | — | 418,987 | 438,266 | ||||||||||||||||
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Weighted | ||||||||||||||||||||
Floating | Fixed interest | Total carrying | average | |||||||||||||||||
interest | rate maturing in: | Non-interest | amount as per | effective | ||||||||||||||||
2004 | rate | Over 1 to 5 Years | bearing | the balance sheet | interest rate | |||||||||||||||
Financial Instruments | $ | $ | $ | $ | % | |||||||||||||||
(iv) Financial liabilities | ||||||||||||||||||||
Trade creditors | — | — | 273,257 | 273,257 | — | |||||||||||||||
Other creditors | — | — | 72,803 | 72,803 | — | |||||||||||||||
Bank and other loans | — | — | 90,054 | 90,054 | 10.8 | |||||||||||||||
Payable — director & director related parties | — | — | 147,661 | 147,661 | 15.0 | |||||||||||||||
Hire purchase | — | — | 669,212 | 669,212 | 7.7 | |||||||||||||||
Total financial liabilities | — | — | 1,252,987 | 1,252,987 | ||||||||||||||||
(b) | Credit Risk |
(c) | Net Fair Values |
2005 | 2004 | |||||||||||||||
Carrying Amount | Net Fair Value | Carrying Amount | Net Fair Value | |||||||||||||
$ | $ | $ | $ | |||||||||||||
Financial assets | ||||||||||||||||
Financial assets at fair value through profit and loss | 4 | — | 4 | — | ||||||||||||
4 | — | 4 | — | |||||||||||||
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2005 | 2004 | |||||||||||||||
Carrying Amount | Net Fair Value | Carrying Amount | Net Fair Value | |||||||||||||
$ | $ | $ | $ | |||||||||||||
Financial liabilities | ||||||||||||||||
Other loans and amounts due | 1,236,194 | — | 759,266 | — | ||||||||||||
1,236,194 | — | 759,266 | — | |||||||||||||
F-98
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Deed of Variation (No. 3) | |||
to the Share Sale Deed relating to shares in RWA Holdings Pty Limited | |||
Equity Partners Two Pty Limited (in its capacity as trustee of Equity Partners 2 Trust) | |||
FOMM Pty Limited | |||
FOMJ Pty Limited | |||
Cetro Pty Limited | |||
TWCE Pty Limited | |||
Michael Paul Baxter | |||
James Harold Warren | |||
Paul Henry Jeffery | |||
Peter Linden McCann | |||
GFN Australasia Finance Pty Limited | |||
General Finance Corporation | |||
Bison Capital Australia LP | |||
NSW 2000, DX 117 SYDNEY TEL: +61 2 9921 8888 FAX: +61 2 9921 8123
www.minterellison.com
Details | A-3 | |||
Agreed terms | A-5 | |||
1. Defined terms & interpretation | A-5 | |||
2. Variation | A-5 | |||
3. Continued operation of the Share Sale Deed as amended and restated | A-5 | |||
4. Miscellaneous | A-5 | |||
4.1 Costs | A-5 | |||
4.2 Counterparts | A-5 | |||
4.3 Entire agreement | A-5 | |||
4.4 Governing law and jurisdiction | A-5 | |||
Signing page | A-6 |
A-2
Table of Contents
Name | Equity Partners Two Pty Limited (as trustee of Equity Partners 2 Trust) | |
ACN | 093 766 280 | |
Notice details | Level 12, 60 Margaret Street, Sydney NSW 2000 Facsimile 02 8298 5150 Attention Rajeev Dhawan | |
Name | FOMM Pty Limited (as trustee of the FOMM Trust) | |
ACN | 106 818 231 | |
Notice details | 66 Lucinda Avenue, Wahroonga NSW 2076 Facsimile 02 9482 3477 Attention Michael Baxter | |
Name | FOMJ Pty Limited (as trustee of the FOMJ Trust) | |
ACN | 106 818 222 | |
Notice details | 10 Sofala Avenue, Riverview NSW 2066 Facsimile 02 9482 3477 Attention James Warren | |
Name | Cetro Pty Limited (as trustee of the FOMP Trust) | |
ACN | 002 109 668 | |
Notice details | Level 2, 57 Grosvenor Street, Neutral Bay NSW 2089 Facsimile 02 9981 7145 Attention Paul Jeffery | |
Name | TCWE Pty Limited (as trustee of the McCann Family Trust) | |
ACN | 109 083 105 | |
Notice details | 9 Bunyana Avenue, Wahroonga NSW 2076 Facsimile 02 9482 3477 Attention Peter McCann | |
Name | Michael Paul Baxter | |
Notice details | 66 Lucinda Avenue, Wahroonga NSW 2076 Facsimile 02 9482 3477 | |
Name | James Harold Warren | |
Notice details | 10 Sofala Avenue, Riverview NSW 2066 Facsimile 02 9482 3477 | |
Name | Paul Henry Jeffery | |
Notice details | 8/1150 Pittwater Road, Collaroy NSW 2107 Facsimile 02 9482 3477 | |
Name | Peter Linden McCann | |
Notice details | 9 Bunyana Avenue, Wahroonga NSW 2076 Facsimile 02 9482 3477 | |
Name | GFN Australasia Finance Pty Limited | |
ACN | 121 227 790 | |
Notice details | C/- General Finance Corporation, 260 So. Los Robles Avenue, Suite #217 Pasadena, California 91101 Facsimile +1 626 795 8090 Attention: Mr Ronald F Valenta | |
Name | General Finance Corporation | |
Notice details | 260 So. Los Robles Avenue, Suite #217 Pasadena, California 91101 Facsimile +1 626 795 8090 Attention: Mr Ronald F Valenta |
A-3
Table of Contents
Name | Bison Capital Australia LP(a limited partnership incorporated in accordance with the laws of Delaware, United States of America) | |
Incorporation number | 33-1158464 | |
Short form name | Bison-GE | |
Notice details | 10877 Wilshire Blvd. Suite 1520, Los Angeles, CA 90024 United States of America Facsimile (310) 260 6576 Attention: Douglas B Trussler — Managing Member |
A-4
Table of Contents
A-5
Table of Contents
ExecutedbyEquity Partners Two Pty Limited in its capacity as trustee of Equity Partners 2 Trust | ||
/s/ Richard Peter Gregson | /s/ Quentin Jones | |
Signature of director | Signature of director/company secretary (Please delete as applicable) | |
Richard Peter Gregson | Quentin Jones | |
Name of director (print) | Name of director/company secretary (print) | |
ExecutedbyFOMM Pty Limited (as trustee of the FOMM Trust) | ||
/s/ Michael Baxter | ||
Signature of sole director and sole company secretary | who states that he or she is the sole director and the sole company secretary of the company. | |
Michael Baxter | ||
Name of sole director and sole company secretary (print) | ||
ExecutedbyFOMJ Pty Limited (as trustee of the FOMJ Trust) | ||
/s/ James H. Warren | ||
Signature of sole director and sole company secretary | who states that he or she is the sole director and the sole company secretary of the company. | |
James H. Warren | ||
Name of sole director and sole company secretary (print) | ||
ExecutedbyCetro Pty Limited in its capacity as trustee of the FOMP Trust | ||
/s/ Peter Henry Jeffrey | ||
Signature of director | Signature of director/company secretary (Please delete as applicable) | |
Peter Henry Jeffrey | ||
Name of director (print) | Name of director/company secretary (print) | |
ExecutedbyTCWE Pty Limited (as trustee of the McCann Family Trust) | ||
/s/ Peter McCann | /s/ Alexandra Merton-McCann | |
Signature of director | Signature of director/company secretary (Please delete as applicable) | |
Peter McCann | Alexandra Merton-McCann | |
Name of director (print) | Name of director/company secretary (print) | |
SignedbyMichael Paul Baxterin the presence of | ||
/s/ Gregory Brian Baxter | /s/ Michael Paul Baxter | |
Signature of witness | Michael Paul Baxter | |
Gregory Brian Baxter | ||
Name of witness (print) | ||
SignedbyJames Harold Warrenin the presence of | ||
/s/ Yuka Yamasaki | /s/ James Harold Warren | |
Signature of witness | James Harold Warren |
A-6
Table of Contents
Yuka Yamasaki | ||
Name of witness (print) | ||
SignedbyPaul Henry Jefferyin the presence of | ||
/s/ Jonathan Roy Blaker | /s/ Paul Henry Jeffrey | |
Signature of witness | Paul Henry Jeffrey | |
/s/ Jonathan Roy Blaker | ||
Name of witness (print) | ||
SignedbyPeter Linden McCannin the presence of | ||
/s/ Gregory Brian Baker | ||
Signature of witness | ||
/s/ Gregory Brian Baker | /s/ Peter Linden McCann | |
Name of witness (print) | Peter Linden McCann | |
ExecutedbyGFN Australasia Finance Pty Limited | ||
/s/ John O. Johnson | ||
Signature of director | Signature of director/company secretary (Please delete as applicable) | |
/s/ John O. Johnson | ||
Name of director | Director/company secretary (print) | |
ExecutedbyGeneral Finance Corporation | ||
/s/ John O. Johnson | ||
Signature of director | ||
John O. Johnson | ||
Name of director |
BISON CAPITAL AUSTRALIA GP, LLC,
By: | /s/ Douglas B. Trussler |
A-7
Table of Contents
Table of Contents
Limited
NSW 2000, DX 117 SYDNEY TEL: +61 2 9921 8888 FAX: +61 2 9921 8123
www.minterellison.com
A-1
Table of Contents
Details | A-6 | |||
Agreed terms | A-8 | |||
1. | Defined terms & interpretation | A-8 | ||
1.1 | Defined terms | A-8 | ||
1.2 | Interpretation | A-15 | ||
1.3 | Headings | A-16 | ||
2. | Conditions | A-16 | ||
2.1 | Conditions to First Completion | A-16 | ||
2.2 | Conditions to Second Completion | A-17 | ||
2.3 | Benefit and Waiver of Conditions | A-18 | ||
2.4 | Conduct of the parties | A-18 | ||
2.5 | Failure of Condition and termination | A-19 | ||
2.6 | Extent of obligation to Fulfil Conditions | A-20 | ||
2.7 | GFC Stockholder Approval | A-20 | ||
3. | Sale and purchase | A-20 | ||
3.1 | Agreement to sell and purchase First Tranche Sale Shares | A-20 | ||
3.2 | Agreement to sell and purchase Second Tranche Sale Shares | A-20 | ||
4. | Fair Value and Purchase Price | A-20 | ||
4.1 | Fair Value | A-20 | ||
4.2 | First Tranche Amount | A-21 | ||
4.3 | Second Tranche Amount | A-21 | ||
4.4 | Deposit | A-21 | ||
4.5 | Adjustments | A-21 | ||
4.6 | Purchase Price | A-23 | ||
4.7 | Net Debt | A-23 | ||
4.8 | Cleared funds | A-23 | ||
4.9 | K & S Lease (Curtainsiders) | A-23 | ||
4.10 | Maximum amount payable by Bison-GE | A-23 | ||
5. | Escrow | A-24 | ||
5.1 | Management Vendors Escrow | A-24 | ||
5.2 | Equity Partners Escrow | A-24 | ||
5.3 | Interest | A-25 | ||
5.4 | Effect of Second Completion | A-25 | ||
6. | Completion | A-25 | ||
6.1 | First Completion — Time and place | A-25 | ||
6.2 | First Completion — Obligations of the Vendors | A-25 | ||
6.3 | Second Completion — Time and place | A-26 | ||
6.4 | Second Completion — Obligations of the Management Vendors | A-26 | ||
6.5 | Obligations of the Purchaser | A-26 | ||
6.6 | Simultaneous actions at Completion | A-27 | ||
6.7 | Records | A-27 | ||
6.8 | Information and Assistance Following Completion | A-27 |
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7. | Completion Accounts | A-28 | ||
7.1 | Completion Accounts | A-28 | ||
7.2 | Basis of preparation | A-28 | ||
7.3 | Access to information | A-28 | ||
7.4 | Review of Completion Accounts | A-28 | ||
7.5 | Dispute Resolution Procedure | A-28 | ||
7.6 | Costs | A-29 | ||
8. | Obligations before First Completion | A-29 | ||
8.1 | Continuity of business | A-29 | ||
8.2 | Notice of Change | A-30 | ||
8.3 | SEC Proxy Filing | A-30 | ||
9. | Warranties and Indemnities | A-31 | ||
9.1 | Warranties by Vendors and Bison-GE | A-31 | ||
9.2 | Vendors’ Indemnity | A-31 | ||
9.3 | Application of the Warranties | A-31 | ||
9.4 | Disclosure | A-32 | ||
9.5 | Acknowledgments | A-32 | ||
9.6 | No reliance | A-32 | ||
9.7 | Financial limits on Claims | A-33 | ||
9.8 | Time limits on Claims | A-33 | ||
9.9 | Maximum aggregate liability for Claims | A-33 | ||
9.10 | Duty to mitigate | A-34 | ||
9.11 | Rights of the Purchaser | A-34 | ||
9.12 | Benefits or credits received by the Company or the Purchaser | A-34 | ||
9.13 | Warranty payments | A-34 | ||
9.14 | Trade Practices Act | A-34 | ||
9.15 | Financial forecasts | A-34 | ||
9.16 | Additional limitations | A-35 | ||
9.17 | Vendors’ Tax Indemnity | A-35 | ||
9.18 | Limits to recovery | A-35 | ||
9.19 | Good faith negotiations in relation to disclosure of material items between signing and Completion | A-36 | ||
9.20 | Effect of Second Completion | A-36 | ||
10. | K&S Lease Indemnity | A-36 | ||
11. | ADF Contract | A-37 | ||
12. | Environmental audit report | A-37 | ||
13. | GFC Undertaking | A-37 | ||
14. | Guarantee | A-37 | ||
14.1 | Guarantee and indemnity | A-37 | ||
14.2 | Enforcement against guarantors | A-37 | ||
14.3 | Continuing Guarantee | A-37 | ||
14.4 | Principal Obligations | A-37 | ||
14.5 | Obligations Absolute and Unconditional | A-38 | ||
14.6 | Winding-up or Bankruptcy of Management Vendor | A-38 | ||
14.7 | Indemnity in Respect of Management Vendors’ Obligations | A-38 |
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14.8 | Payment under Indemnity | A-38 | ||
14.9 | General Application of Indemnity | A-39 | ||
15. | Restraint | A-39 | ||
15.1 | Definitions | A-39 | ||
15.2 | Prohibited activities | A-39 | ||
15.3 | Duration of prohibition | A-39 | ||
15.4 | Geographic application of prohibition | A-40 | ||
15.5 | Interpretation | A-40 | ||
15.6 | Exceptions | A-40 | ||
15.7 | Acknowledgments | A-40 | ||
15.8 | Payment of Restraint Amount | A-40 | ||
16. | Representations by the Purchaser and GFC | A-41 | ||
16.1 | Representations | A-41 | ||
16.2 | Application of representations by the Purchaser and GFC | A-41 | ||
17. | Equity Partners limitation of liability | A-41 | ||
17.1 | Limited capacity | A-41 | ||
17.2 | Limited rights to sue | A-41 | ||
17.3 | Exceptions | A-42 | ||
17.4 | Limitation on authority | A-42 | ||
18. | GST | A-42 | ||
18.1 | Interpretation | A-42 | ||
18.2 | GST gross up | A-42 | ||
18.3 | Reimbursements | A-42 | ||
18.4 | Tax invoice | A-42 | ||
19. | Announcements | A-42 | ||
19.1 | Announcements | A-42 | ||
20. | Notices and other communications | A-43 | ||
20.1 | Service of notices | A-43 | ||
20.2 | Effective on receipt | A-43 | ||
21. | Miscellaneous | A-43 | ||
21.1 | Vendors’ Representatives | A-43 | ||
21.2 | Alterations | A-43 | ||
21.3 | Approvals and consents | A-43 | ||
21.4 | Assignment | A-43 | ||
21.5 | Costs | A-43 | ||
21.6 | Stamp duty and other duties | A-44 | ||
21.7 | Survival | A-44 | ||
21.8 | Counterparts | A-44 | ||
21.9 | No merger | A-44 | ||
21.10 | Entire agreement | A-44 | ||
21.11 | Further action | A-44 | ||
21.12 | Severability | A-44 | ||
21.13 | Waiver | A-44 | ||
21.14 | Governing law and jurisdiction | A-44 | ||
21.15 | Specific performance | A-44 |
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22. | Trusts | A-44 | ||
23. | Certain Covenants | A-44 | ||
23.1 | Senior Subordinated Notes | A-44 | ||
23.2 | Bison-GE Expenses | A-45 | ||
23.3 | GFC Trust Account | A-45 | ||
Schedule 1 — Shareholdings and Respective Proportions | A-46 | |||
Schedule 2 — Guarantors | A-47 | |||
Schedule 3 — Directors and Secretaries to resign and to be appointed | A-47 | |||
Schedule 4 — Title and Capacity Warranties | A-47 | |||
Schedule 5 — Business Warranties | A-48 | |||
Schedule 6 — Leased Premises | A-55 | |||
Schedule 7 — Intellectual Property Rights | A-56 | |||
Schedule 8 — Due Diligence Index | A-57 | |||
Schedule 9 — Accounts | A-58 | |||
Schedule 10 — K&S Lease (Curtainsiders) | A-59 | |||
Schedule 11 — K&S Lease (Reefers) | A-60 | |||
Schedule 12 — Worked examples of Purchase Price adjustments | A-61 | |||
Schedule 13 — Michael Baxter Consultancy Agreement | A-62 | |||
Schedule 14 — Bison-GE/GFN Shareholders Agreement | A-63 | |||
Schedule 15 — Bison-GE/Management Vendors Shareholders Agreement | A-64 | |||
Schedule 16 — Legal Opinion | A-65 | |||
Schedule 17 — Subscription deed | A-67 | |||
Signing page | A-68 |
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Date | 12 September 2006 | |
Parties | ||
Name | Equity Partners Two Pty Limited (as trustee of Equity Partners 2 Trust) | |
ACN | 093 766 280 | |
Short form name | Equity Partners | |
Notice details | Level 12, 60 Margaret Street Sydney NSW 2000 Facsimile 02 8298 5150 Attention Rajeev Dhawan | |
Name | FOMM Pty Limited (as trustee of the FOMM Trust) | |
ACN | 106 818 231 | |
Notice details | 66 Lucinda Avenue, Wahroonga NSW 2076 Facsimile 02 9482 3477 Attention Michael Baxter | |
Name | FOMJ Pty Limited (as trustee of the FOMJ Trust) | |
ACN | 106 818 222 |
Notice details | 10 Sofala Avenue, Riverview NSW 2066 Facsimile 02 9482 3477 Attention James Warren |
Name | Cetro Pty Limited (as trustee of the FOMP Trust) | |
ACN | 002 109 668 |
Notice details | Level 2, 57 Grosvenor Street, Neutral Bay NSW 2089 Facsimile 02 9981 7145 Attention Paul Jeffery |
Name | TCWE Pty Limited (as trustee of the McCann Family Trust) | |
ACN | 109 083 105 | |
Notice details | 9 Bunyana Avenue WAHROONGA NSW 2076 Facsimile 02 9482 3477 Attention Peter McCann |
Name | Each person listed in Schedule 2 | |
Short form name | Each aGuarantorand collectively, theGuarantors | |
Name | GFN Australasia Finance Pty Limited | |
ACN | 121 227 790 | |
Short form name | GFN |
Notice details | C/- General Finance Corporation, 260 So. Los Robles Avenue, Suite #217 Pasadena, California 91101 Facsimile +1 626 795 8090 Attention: Mr Ronald F Valenta |
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Name | General Finance Corporation | |
Short form name | GFC |
Notice details | 260 So. Los Robles Avenue, Suite #217 Pasadena, California 91101 Facsimile +1 626 795 8090 Attention: Mr Ronald F Valenta |
Name | Bison Capital Australia LP(a limited partnership incorporated in accordance with the laws of Delaware, United States of America) | |
Incorporation number | 33-1158464 | |
Short form name | Bison-GE | |
Notice details | 10877 Wilshire Blvd. Suite 1520, Los Angeles, CA 90024 United States of America | |
Facsimile (310) 260 6576 Attention: Douglas B Trussler — Managing Member |
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7 | ||||||||||||||||||||||||
% | ||||||||||||||||||||||||
Management | ||||||||||||||||||||||||
Shares Held in the Company as at the Date of this Deed | 6 | Vendors | ||||||||||||||||||||||
1 | 2 | 3 | 4 | 5 | Respective | Respective | ||||||||||||||||||
Name | Ordinary | Class A | Class C | Rights | Proportions | Proportions | ||||||||||||||||||
Equity Partners Two Pty Limited (as trustee of Equity Partners 2 Trust) | 4,322,590 | — | 53.01 | % | — | |||||||||||||||||||
FOMM Pty Limited (as trustee of the FOMM Trust) | 777,600 | 36 | — | 18.52 | % | 39.42 | % | |||||||||||||||||
FOMJ Pty Limited (as trustee of the FOMJ trust) | 583,200 | 27 | — | 13.89 | % | 29.56 | % | |||||||||||||||||
Cetro Pty Limited (as trustee of the FOMP Trust) | 583,200 | 27 | — | 13.89 | % | 29.56 | % | |||||||||||||||||
TCWE Pty Limited (as trustee of the McCann family Trust) | 28,800 | 2 | 43,200 Ordinary shares 2 C class shares | 0.69 | % | 1.46 | % | |||||||||||||||||
TOTAL | 1,972,800 | 4,322,590 | 100 | 100 |
% Share of | ||||||||||||
First Completion | Adjustment Payment | |||||||||||
Payment | Under Clause 4.5 | |||||||||||
Name | Sale Shares | $ | and Clause 4.9 | |||||||||
Equity Partners Two Pty Limited | 4,322,590 Class A shares | 28,432,454 | 34.33 | |||||||||
FOMM Pty Limited | 873,611 ordinary shares | 5,746,300 | 14.97 | |||||||||
FOMJ Pty Limited | 655,208 ordinary shares | 4,309,725 | 11.23 | |||||||||
Cetro Pty Limited | 655,208 ordinary shares | 4,309,725 | 11.23 | |||||||||
TCWE Pty Limited | 32,356 ordinary shares | 212,826 | 0.55 | |||||||||
Total | 6,538,973 shares | 43,011,030 | 72.32 |
Name | Sale Shares | |
FOMM Pty Limited | 636,616 ordinary shares | |
FOMJ Pty Limited | 477,462 ordinary shares | |
Cetro Pty Limited | 477,462 ordinary shares | |
TCWE Pty Limited | 23,578 ordinary shares | |
Bison GE | 6,538,973 ordinary shares | |
Bison GE | 1 class D share |
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Full Name | Notice Details | Related Management Vendor | ||
Michael Paul Baxter | 66 Lucinda Avenue, Wahroonga NSW 2076 | FOMM Pty Limited | ||
James Harold Warren | 10 Sofala Avenue, Riverview NSW 2066 | FOMJ Pty Limited | ||
Paul Henry Jeffery | 8/1150 Pittwater Road Collaroy NSW 2107 | Cetro Pty Limited | ||
Peter Linden McCann | 9 Bunyana Avenue Wahroonga NSW 2076 | TWCE Pty Limited |
3 | 4 | 5 | ||||||
1 | 2 | Secretaries to | Directors to be | Secretaries to be | ||||
Company Name | Directors to Resign | Resign | Appointed | Appointed | ||||
RWA Holdings Pty Limited | Richard Gregson Rajeev Dhawan | — | Douglas Trussler Andreas Hildebrand | — | ||||
Royal Wolf Trading Australia Pty Limited | Richard Gregson Rajeev Dhawan | — | Douglas Trussler Andreas Hildebrand | — | ||||
Royal Wolf Hi-Tech Pty Limited | — | — | Douglas Trussler Andreas Hildebrand | — |
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1.3 | (Sale Shares)The Sale Shares: |
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No. | Address | Landlord Details | Tenant | |||||
1. | Sydney (Corporate Office) Suite 202 Level 2 22-28 Edgeworth David Ave Hornsby NSW 2077 | GPF No. 3 Pty Ltd | Royal Wolf Trading | |||||
2. | Sydney ‘Bonds Road Business Park’ 111 Bonds Rd Roselands NSW 2196 | Tyne Container Services Pty Ltd | Royal Wolf Trading | |||||
3. | Canberra 15-23 Silva Avenue Queanbeyan NSW 2620 | Movements International Movers (ACT) Pty Ltd | Royal Wolf Trading | |||||
4. | Central Coast 117 Gavenlock Rd Tuggerah NSW 2259 | David Weaver | Royal Wolf HI-Tech Pty Ltd | |||||
5. | Newcastle Lot 401 Pacific Hwy Heatherbrae NSW 2324 | Trutek Administration Pty Limited | Royal Wolf Hi-Tech Pty Limited | |||||
6. | Brisbane 33 Weyba Street Banyo QLD 4014 | George Aufferber & Maria Anna Aufferber | Royal Wolf Trading | |||||
7. | Cairns Lot 2 Maconachie Woree QLD 4870 | Swain Family Investments Pty Ltd | Royal Wolf Trading | |||||
8. | Gold Coast 180 Heslop Road Gaven QLD 4211 | Storco Pty Ltd | Royal Wolf Trading | |||||
9. | Townsville 754-762 Ingham Rd Bohle QLD 4818 | Ferry Property | Royal Wolf Trading | |||||
10. | National Mining & Defence Office C/o Strang International 936 Nudgee Road Northgate QLD 4013 | Strang International Pty Ltd | Royal Wolf Trading | |||||
11. | Melbourne (West) 195 Fairbairn Road Sunshine West VIC 3020 | Epic Bond Pty Ltd | ACN Containers Pty Limited | |||||
12. | Melbourne (Production Facility) 2 Pearl Street Brooklyn VIC 3012 | P&V Industries Pty Ltd | Royal Wolf Trading | |||||
13. | Melbourne (East) 2159 Dandenong Road Clayton VIC 3168 | MPM Leasing | Royal Wolf Trading | |||||
14. | Adelaide Cnr Francis St & Eastern Pde Gillman SA 5013 | James Matra Pty Ltd | Royal Wolf Trading | |||||
15. | Perth 19 Mooney Street Bayswater WA 6053 | F & C Cardaci | Royal Wolf Trading |
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No. | Address | Landlord Details | Tenant | |||||
16. | Darwin 13 Berrimah Road Berrimah NT 0828 | Chan Ling Lam | Royal Wolf Trading | |||||
17. | Tasmania 39 Howard Road Derwent Park Hobart TAS 7009 | Thorpe Interstate Shipping | Royal Wolf Trading |
1. | Business Names |
2. | Trademarks |
3. | Domain Names |
4. | Designs |
5. | Patents |
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Attachment 1
Net Tangible Assets Amount
Total Assets | ||||
Total Assets | 70,983,000 | |||
minus Intangible Assets | 6,922,000 | |||
Total Assets | 64,061,000 | |||
Net Tangible Assets | ||||
Total Assets (excluding Intangibles) | 64,061,000 | |||
minus Total Liabilities | 61,786,000 | |||
plus Amount required to Cash out the Options | — | |||
plus Amount required to buy back unallocated CFO Shares | — | |||
plus Warranty Insurance Premium | — | |||
plus Chairman’s bonus | 250,000 | |||
Total | 2,525,000 | |||
NTA Adjustment Calculation | SSD | Actual | Adjustment* | |||||||||
NTA | 2,700,000 | 2,525,000 | 175,000 |
* | No upward adjustment as per Clause 4.3(a) |
31-Oct | 30-Nov | 31-Dec | 31-Jan-07 | 28-Feb-07 | 31-Mar-07 | |||||||||||||||||
2,700,000 | 2,700,000 | 2,700,000 | 2,700,000 | 2,700,000 | 2,700,000 |
• | Total Assets less Intangible Assets as per completions accounts |
• | Minus Total Liabilities as per completion accounts excluding: |
– | the amount provided to cancel the options in the Completion Accounts but not paid as at Completion | |
– | the amount required to buy-back the unallocated CFO shares. Note this is likely to occur pre-completion. | |
– | Any unpaid insurance premium relating to Warranty Insurance | |
– | Any unpaid performance fee relating to the Chairman’s bonus |
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Attachment 2
Current Assets | ||||
Total Current Assets | 14,499,000 | |||
minus cash | 3,152,000 | |||
minus deposits relating to ADF | — | |||
Net Current Assets | 11,347,000 | |||
Current Liabilities | ||||
Total Current Liabilities | 14,902,000 | |||
minus Bank Overdraft (Current) | — | |||
minus Bank Debt (Current) | 5,831,000 | |||
minus Bank Vendor Financing (Current) | 711,000 | |||
minus Finance Lease Other (Current) | 646,000 | |||
plus ADF Contract related debt (Current) | — | |||
Net Current Liabilities | 7,714,000 | |||
Working Capital | 3,633,000 | |||
Working Capital Adjustment | SSD | Actual | Adjustment* | |||||||||
Working Capital Amount | 3,000,000 | 3,633,000 | — |
* | No upward adjustment as per Clause 4.3(a) |
31-Oct | 30-Nov | 31-Dec | 31-Jan-07 | 28-Feb-07 | 31-Mar-07 | |||||
3,000,000 | 3,000,000 | 2,168,000 | 3,000,000 | 3,000,000 | 3,000,000 |
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Containers Adjustment | SSD | Actual | Adjustment | |||||||||
Completion Containers Rental Equipment Amount | 46,414,000 | 47,319,000 | 905,000 |
31-Oct | 30-Nov | 31-Dec | 31-Jan-07 | 28-Feb-07 | 31-Mar-07 | |||||||||||||||||
45,703,000 | 46,414,000 | 47,004,000 | 46,640,000 | 46,624,000 | 46,879,000 |
Calculation of Gross Purchases of Container Rental Equipment for the period from 1 July 2006 to Completion: Is equivalent to the Cost of Container Rental Equipment excluding Accumulated Depreciation as per the Balance Sheet in the Completion Accounts. For the avoidance of doubt this equals [$41,470,000] plus the sum of the Gross Purchases of Container Rental equipment for the period from 1 July 2006 to Completion as per the Cashflow contained in the Completion Accounts. |
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Item | Net Debt Calculation | |||||
Current Liabilities | ||||||
1 | Bank Overdraft | — | ||||
2 | plus Bank Debt | 5,831,000 | ||||
3 | plus Bank Vendor Financing | 711,000 | ||||
4 | plus Finance Lease Other | 646,000 | ||||
Non-Current Liabilities | ||||||
5 | plus Bank Debt | 25,143,000 | ||||
6 | plus Bank Vendor Financing | 856,000 | ||||
7 | plus ANZ Sub Capital Note | 11,788,000 | ||||
8 | plus Finance Lease Other | 312,000 | ||||
9 | Plus B Class Notes | 7,041,000 | ||||
10 | plus Acquisition costs outstanding | 160,000 | ||||
11 | plus Dividends | — | ||||
12 | plus Amounts required to cash out the options | 310,000 | ||||
13 | plus the Vendors transaction costs | 300,000 | ||||
plus Warranty Insurance Premium | — | |||||
plus Chairman’s bonus | 250,000 | |||||
plus Amount required to buy back the unallocated CFO Shares | ||||||
14 | minus Cash | 3,152,000 | ||||
15 | minus outstanding K&S (Curtainsiders) | 579,000 | ||||
16 | minus ADF related debt | — | ||||
Net Debt | 49,617,000 | |||||
Net Debt Adjustment | SSD | Actual | Adjustment | |||||||||
Net Debt | 49,617,000 | 49,617,000 | — |
31-Oct | 30-Nov | 31-Dec | ||
49,617,000 | 49,617,000 | 49,617,000 |
B(i) — ANZ Facility = items 1, 2, 5, 7 | 42,762,000 | |||
B(ii) — B Class Note = item 9 | 7,041,000 | |||
B(iii) — other interest bearing debt/ finance leases = items 3, 4, 6 & 8 | 2,525,000 | |||
B(iv) — remaining acquisition payments = item 10 | 160,000 | |||
B(v) — Dividends or other distributions = item 11 | — | |||
B(vi) — Amount to cash out Options = item 12 | 310,000 | |||
B(vii) — Wridgeways Lease = included in B(iii) | ||||
B(viii) — K&S Lease (reefers) = included in B(iii) | ||||
B(ix) — Transactions expenses not yet paid = item 13 | 300,000 | |||
Warranty Insurance | — | |||
Chairman’s bonus | 250,000 | |||
Buyback of CFO Shares | ||||
Less | ||||
A. — Cash = item 14 | (3,152,000 | ) | ||
(iii) K&S Lease (Curtainsiders) = item 15 | (579,000 | ) | ||
(iv) — ADF Debt | — | |||
Net Debt | 49,617,000 | |||
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Net Debt — Calculation as per Definition
Equals:
• | Acquisition costs outstanding — This is limited to the Acquisitions completed as at date of signing the Share Sale Agreement. The only liability outstanding is the deferred consideration payable for the acquisition of ACN which is $160,000 due 30 June 2007. | |
• | Dividends or other distributions declared by the group but not yet paid. | |
• | Amounts required to cash out all of the options — this is equivalent to the provision in the accounts which is estimated to be [$4,178,000]. This amount is included in the Balance Sheet line items “Employee Obligations” (Current & Non-Current), but does not form the total amount of these line items. | |
• | The Vendors’ costs and expenses of negotiating, preparing and executing this deed which are to be paid by the company and which are unpaid as at Completion. This amount will be included in Trade Creditors. | |
• | Any unpaid insurance premium relating to Warranty Insurance | |
• | Any unpaid performance fee relating to the Chairman’s bonus | |
• | The amount required to buyback the unallocated CFO Shares (only include if the payment has not yet occurred). |
• | The outstanding lease liability associated with the K&S (Curtainsiders) as per the amortization schedule referred to in clause 4.8. | |
• | Cash as per the Balance Sheet of the Completion Accounts. | |
• | Any amounts owing by the group in relation to any assets acquired in satisfaction of the Group’s obligations under the ADF Contract less any deposits received by the Group in relation to the ADF Contract |
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K&S Lease Adjustment | SSD | Actual* | Adjustment | |||||||||
K&S lease | 579,000 | 579,000 | — |
* | As per the Amortisation Schedule relating to this lease |
31-Oct | 30-Nov | 31-Dec | 31-Jan-07 | 28-Feb-07 | 31-Mar-07 | |||||||||||||||||||
602,000 | 579,000 | 555,000 | 531,000 | 507,000 | 482,000 |
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• | RWTA’s client and/or customer database | |
• | Financial information and profit margins | |
• | Remuneration packages of RWTA’s staff, agents and distributors | |
• | Sensitive pricing information | |
• | Manufacturing methods | |
• | Research data or results of research | |
• | Information which RWTA receive from third parties in confidence | |
• | Technical information and know-how | |
• | Intellectual property | |
• | Any other information reasonably regarded as confidential which comes into your possession for the purposes of, or as a result of the provision of services under this Agreement | |
• | Any notes, reports or documents created by you which utilizes or contains any of the information set out above, whether stored or storable in computer data file format or recorded in any other form. |
• | Directly or indirectly in any capacity whatsoever, carry on, advise, provide services to or be engaged, concerned or interested in or associated with any business or activity which is competitive with or similar to any business carried on by RWTA or any of its subsidiaries at the date of termination of your employment; and |
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• | Canvass, solicit or endeavour to entice away from RWTA any person who or which at any time during the employment or at any date of termination of the employment was or is a client or customer or supplier of RWTA or of any of its subsidiaries or any other person or organisation who is in the habit of dealing with RWTA or any of its subsidiaries: and | |
• | Solicit, interfere with or endeavour to entice away an employee of RWTA or any of its subsidiaries; and | |
• | Counsel, procure or otherwise assist any person to do any of the acts referred to insub-paragraphs (b) and (c) of this paragraph. |
/s/ James Warren | /s/ Michael Baxter | |
Royal Wolf Trading Australia Pty Limited | Michael Baxter |
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EXECUTEDas a deed. | ||
ExecutedbyEquity Partners Two Pty Limited in its capacity as trustee of Equity Partners 2 Trust | ||
/s/ Rajeev Dhawan | /s/ Quentin Jones | |
Signature of director | Signature of director/company secretary (Please delete as applicable) | |
Rajeev Dhawan | Quentin Jones | |
Name of director (print) | Name of director/company secretary (print) | |
ExecutedbyFOMM Pty Limited (as trustee of the FOMM Trust) | ||
/s/ Michael Baxter | ||
Signature of sole director and sole company secretary | who states that he or she is the sole director and the sole company secretary of the company | |
Michael Baxter | ||
Name of sole director and sole company secretary (print) | ||
ExecutedbyFOMJ Pty Limited (as trustee of the FOMJ Trust) | ||
/s/ James H. Warren | ||
Signature of sole director and sole company secretary | who states that he or she is the sole director and the sole company secretary of the company | |
James H. Warren | ||
Name of sole director and sole company secretary (print) | ||
ExecutedbyCetro Pty Limited (as trustee of the FOMP Trust) | ||
/s/ Paul Jeffrey | ||
Signature of director | Signature of director/company secretary (Please delete as applicable) | |
Paul Jeffrey | ||
Name of director (print) | Name of director/company secretary (print) | |
ExecutedbyTCWE Pty Limited (as trustee of the McCann Family Trust) | ||
/s/ Peter McCann | /s/ Alexandra Merton-McCann | |
Signature of director | Signature of director/company secretary (Please delete as applicable) | |
Peter McCann | Alexandra Merton-McCann | |
Name of director (print) | Name of director/company secretary (print) | |
SignedbyMichael Paul Baxterin the presence of | ||
/s/ Maya Port | /s/ Michael Paul Baxter | |
Signature of witness | Michael Paul Baxter | |
Maya Port | ||
Name of witness (print) |
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SignedbyJames Harold Warrenin the presence of | ||
/s/ Maya Port Signature of witness | /s/ James Harold Warren James Harold Warren | |
Maya PortName of witness (print) | ||
SignedbyPaul Henry Jefferyin the presence of | ||
/s/ Maya Port Signature of witness | /s/ Paul Henry Jeffrey Paul Henry Jeffrey | |
Maya PortName of witness (print) | ||
SignedbyPeter Linden McCannin the presence of | ||
/s/ Maya Port Signature of witness | /s/ Peter Linden McCann Peter Linden McCann | |
Maya PortName of witness (print) | ||
ExecutedbyGFN Australasia Finance Pty Limited | ||
/s/ John O. Johnson Signature of director | /s/ Robert Charles Barnes Signature of director/company secretary(Please delete as applicable) | |
John O. Johnson | Robert Charles BarnesName of director/company secretary (print) | |
ExecutedbyGeneral Finance Corporation | ||
/s/ John O. Johnson Signature of authorised officer | ||
John O. Johnson Name of authorised officer |
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GFN Australasia Holdings Pty Limited
and
Bison Capital Australia, L.P.
and
GFN Australasia Finance Pty Limited
Shareholders Agreement
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Page No. | ||||||||
1 | Definitions and interpretation | B-3 | ||||||
1.1 | Definitions | B-3 | ||||||
1.2 | Interpretation | B-5 | ||||||
1.3 | Business Day | B-6 | ||||||
1.4 | Inconsistency with Constitution | B-6 | ||||||
2 | Termination of previous agreements | B-6 | ||||||
3 | Share capital | B-7 | ||||||
3.1 | Share Capital | B-7 | ||||||
3.2 | Rights of Shares | B-7 | ||||||
4 | Acknowledgements by Shareholders | B-7 | ||||||
5 | Shareholder funding of the Company | B-7 | ||||||
5.1 | No obligation to contribute additional funds | B-7 | ||||||
6 | Disposal of Securities | B-7 | ||||||
6.1 | Restriction on disposition | B-7 | ||||||
6.2 | Permitted transfers | B-7 | ||||||
6.3 | Restraint of transfer of Shares | B-7 | ||||||
7 | Put and Call Options | B-8 | ||||||
7.1 | Put Option | B-8 | ||||||
7.2 | Call Options | B-8 | ||||||
7.3 | Purchase Price | B-8 | ||||||
7.4 | Closing | B-9 | ||||||
7.5 | Liquidity Default | B-9 | ||||||
8 | Shareholders Meetings | B-10 | ||||||
8.1 | Quorum | B-10 | ||||||
8.2 | Adjourned Meetings | B-10 | ||||||
8.3 | Transactions Requiring Approval of Bison-GE | B-10 | ||||||
8.4 | Dividend Policy | B-11 | ||||||
9 | Directors | B-11 | ||||||
9.1 | Composition of Board of Directors | B-11 | ||||||
9.2 | Appointment of Alternates | B-11 | ||||||
9.3 | Observer Rights | B-11 | ||||||
9.4 | Appointment of Chairman | B-11 | ||||||
10 | Meetings of Directors | B-11 | ||||||
10.1 | Notice of Meetings | B-11 | ||||||
10.2 | Board Papers | B-11 | ||||||
10.3 | Meetings by Written Resolution | B-12 | ||||||
10.4 | Location and Travel Expenses | B-12 | ||||||
10.5 | Frequency of Meetings | B-12 | ||||||
10.6 | Board meetings | B-12 | ||||||
10.7 | Reports | B-12 |
B-1
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Page No. | ||||||||
11 | Management of the Company | B-12 | ||||||
11.1 | The Board | B-12 | ||||||
11.2 | Committees | B-13 | ||||||
11.3 | Deed of Access and Indemnity | B-13 | ||||||
12 | Representations and Warranties | B-13 | ||||||
12.1 | Representations and Warranties | B-13 | ||||||
12.2 | Application of Representations and Warranties | B-13 | ||||||
13 | Indemnification and Release by GFC | B-13 | ||||||
13.1 | Indemnification | B-13 | ||||||
13.2 | Enforceability | B-14 | ||||||
14 | Termination | B-14 | ||||||
15 | General | B-14 | ||||||
15.1 | Notices | B-14 | ||||||
15.2 | Governing law and jurisdiction | B-15 | ||||||
15.3 | Prohibition and enforceability | B-15 | ||||||
15.4 | Waivers | B-15 | ||||||
15.5 | Variation | B-15 | ||||||
15.6 | Amendment | B-15 | ||||||
15.7 | Cumulative rights | B-15 | ||||||
15.8 | Assignment | B-15 | ||||||
15.9 | Further assurances | B-15 | ||||||
15.10 | Entire agreement | B-15 | ||||||
15.11 | Counterparts | B-16 | ||||||
15.12 | Relationship of parties | B-16 | ||||||
15.13 | Investments in Competitive Businesses | B-16 | ||||||
SCHEDULE 1 — SHARE CAPITAL | S-1 | |||||||
SCHEDULE 2 DEED OF ACCESSION | S-2 | |||||||
1 | Interpretation | S-2 | ||||||
2 | New Shareholder | S-2 | ||||||
3 | Third party benefit | S-3 | ||||||
4 | Release | S-3 | ||||||
5 | Consent | S-3 | ||||||
6 | Address | S-3 | ||||||
7 | Governing law | S-3 | ||||||
8 | Counterparts | S-3 |
B-2
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of [insert address]
(“GFNH”)
Bison Capital Australia, L.P.
of [insert address]
(“Bison-GE”)
of
260 South Los Robles, Suite 217
Pasadena, CA 91101
(“GFC”)
of [insert address]
(“Company”)
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Address:
Facsimile: ;
Address:
Facsimile: ;
Address:
Facsimile: ;
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Shareholder | Number of Shares | % of Share Capital | ||||||
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DEED OF ACCESSION
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EXECUTEDbyGFNH AUSTRALASIA | ) | |||
FINANCE PTY LIMITED | ) | |||
Signature of director | Signature of director / company secretary (delete as applicable) | |||
Name of director (print) | Name of director / company secretary (print) | |||
EXECUTEDby[NEW SHAREHOLDER] | ) | |||
) | ||||
Signature of director | Signature of director / company secretary (delete as applicable) | |||
Name of director (print) | Name of director / company secretary (print) | |||
EXECUTEDby[OUTGOING ENTITY] | ) | |||
) | ||||
Signature of director | Signature of director / company secretary (delete as applicable) | |||
Name of director (print) | Name of director / company secretary (print) | |||
EXECUTEDas anAGREEMENT | ||||
SIGNEDon behalf of Bison Capital | ) | |||
Australia, L.P. | ) | |||
) | ||||
) | ||||
By: Bison Capital Australia GP, LLC | ||||
By: | ||||
Its: _ _ | ||||
Signature of witness | Signature of representative | |||
Name of witness (print) | Name of representative (print) | |||
EXECUTEDbyGENERAL FINANCE | ) | |||
CORPORATION | ) | |||
By: _ _ | ||||
Its: |
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) | ) | |||
EXECUTEDbyGFNH AUSTRALASIA | ) | |||
FINANCE PTY LIMITED | ) | |||
Signature of director | Signature of director/company secretary (delete as applicable) | |||
Name of director (print) | Name of director/company secretary (print) | |||
EXECUTEDbyGFNH AUSTRALASIA | ) | |||
HOLDINGS PTY LIMITED | ) | |||
Signature of director | Signature of director/company secretary (delete as applicable) | |||
Name of director (print) | Name of director/company secretary (print) |
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SIGNATURE PAGES TO FOLLOW]
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By: | Bison/GE GP, LLC |
By: | /s/ Douglas B. Trussler |
By: | /s/ Ronald Valenta |
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By: | /s/ James H. Warren |
Title: Sole Director and Sole Company Secretary
By: | /s/ Peter Henry Jeffrey |
By: | /s/ Colin James |
Name: | Colin James |
Title: | President |
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260 S. Los Robles Avenue, Suite # 217
Pasadena, California 91101
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF GENERAL FINANCE CORPORATION
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1. | To approve General Finance Corporation’s acquisition of RWA Holdings Pty Limited | FOR o | AGAINST o | ABSTAIN o | If you vote “AGAINST” Proposal Number 1 and you hold shares of our common stock originally issued in our initial public offering, you may demand that we convert your shares of common stock into a pro rata portion of the funds held in our trust account by marking the “CONVERSION DEMAND” box below. If you demand conversion and otherwise properly exercise your conversion rights, then you will be exchanging your shares of our common stock for cash and will no longer own these shares. You will only be entitled to receive cash for these shares if the acquisition is completed and you tender your stock certificate to our transfer agent prior to March 20, 2007 and continue to hold these shares through the completion of the acquisition. Failure to (a) vote against the approval of the acquisition, (b) check the following box and (c) submit this proxy and properly tender your share certificate in a timely manner and (d) hold your shares as described in the accompanying proxy statement will result in the loss of your conversion rights. | |||||||
I HEREBY DEMAND CONVERSION OF MY SHARES ELIGIBLE FOR CONVERSION | o | |||||||||||
2. | If there are insufficient votes present at the special meeting for approval of the acquisition, to grant our board of directors discretionary authority to postpone or adjourn the special meeting to solicit additional votes for the acquisition. MARK HERE FOR ADDRESS CHANGE AND NOTE AT RIGHT | FOR o | AGAINST o | ABSTAIN o o |
Signature | Signature | Date | ||||||||