Page 572 - Week 02 - Tuesday, 10 February 2009
company. It was also announced that the ACT government passenger and light commercial vehicle fleet management contract would be put to market tender. On 29 May 2007, in anticipation that Rhodium was going to be sold, the Legislative Assembly had resolved that, in accordance with section 11(3) of the Territory-owned Corporations Act, this Assembly approved the voting shareholders of Rhodium Asset Solutions resolving to amend the company’s constitution to allow the shares of Rhodium to be sold and give effect to the sale. Members would be aware, however, that negotiations of the sale of shares of the company have ceased as it is no longer viable to sell the company as a going concern. The government subsequently announced the wind down of the business.
This wind down will require another resolution passed by the Assembly in order to dispose of any of Rhodium’s main undertakings. This requirement is in accordance with section 16(4) of the Territory-owned Corporations Act, which stipulates that a territory-owned corporation must not dispose of any main undertakings unless approved by the Legislative Assembly.
As the previous resolution agreed to by the Assembly concerned the sale of Rhodium shares, I now seek the support of this Assembly for a revised resolution, which provides for the disposal of Rhodium’s main undertakings and the technical amendments to Rhodium’s constitution when Rhodium is removed from schedule 1 of the Territory-owned Corporations Act.
Rhodium has largely ceased writing new business since 1 October 2008 other than to issue new leases under the ACT government fleet contract and to extend existing leases, providing this does not prolong the period of the wind down. As the wind down cannot be completed until Rhodium has dealt with all its remaining assets and liabilities, this means that the company must continue functioning until all remaining leases have either been disposed of by Rhodium or have expired.
Although the bulk of the leases will expire in 2011, there are a several hundred leases that extend for several more years, some of which will not mature until 2018. Therefore, in order to complete the wind down as early as possible and avoid the costs of maintaining the company over an extended period, Rhodium is intending to test the level of market interest in acquiring the various components of the remaining business, including each of its main undertakings.
The potential transfer or assignment of each category of leases by Rhodium to another party would constitute a disposal of a main undertaking under the Territory-owned Corporations Act, which requires the consent of the Legislative Assembly by passing a resolution. Rhodium’s main undertakings comprise the ACT government fleet management contract, which includes approximately 1,000 vehicles. There are also in the order of 640 operating leases as well as about 1,600 individual novated leases. This resolution will allow the company to transfer the ACT government fleet leases contract to another provider. The government has a tender process well underway to appoint a new fleet provider.
Further to the legislative requirements relating to this resolution, I would also like to remind members that if the voting shareholders agree to Rhodium disposing of a major undertaking, I am also required under section 16(3) of the Territory-owned