BCS - BrisConnections Unit Trusts

[drsmith]

Re: raise $1b(so far only $330m) borrow $3.8b.wtf?

off market off course...no buyers anyway,but reckon this guy is trying to pull a swifty as he could hold the company to ransom with his stake.

thats my take on it anyway.(buy my shares or i will pull the plug?)

According to the SMH he purchased the vast majority of his shares (47.6m) on market via a broker for $0.001 per share.

With 20% of the company available for the same price that would make it increasingly difficult for Bolton to get 75%+ of the vote needed to wind it up if the underwriters snapped up that 20%. There's also the question of how many units are currently held by related parties to briscon who would not vote in Bolton's favour.

The only way Bolton could potentially make money out of this would be to aquire more units for effectively nil consideration (off market) in the hope that these will be purchased off him for $0.001. Is that what you are thinking ?

I'm wondering whether he is one (or more) of the 180 sellers at $0.001 and hoping that by threatening to call a meeting to wind it up he'll get his investment back and free himself (or his company) of the instalment liability.

In either case it is indeed a mexican standoff and it will be interesting to see how it unfolds.

 

[Sunder]

Re: bolton is no fool

Well i think sorry i know this guy is a smart operator so id say hes got some good info on the underwriters chances of buying out & delisting.

$47k to this guy is a small amount to risk versus the reward.did he buy on market?

im going to email him to see what the go is?

I still don't see why the underwriters would buy out.

Okay, let's say I'm 100% sure that Macquarie is going to buy up the shares. I buy 500,000 for 0.1c each

Option 1: Macquarie offers 0.1c each for them - I just lose out on the trading, Macquarie pays me $500.

Option 2: I "hold out" for a higher figure. Macquarie pays 0.2c for them making me a tidy sum

Option 3: I "hold out" for a higher figure. Macquarie doesn't make a higher offer, and I get the demand for $500,000 and don't pay. Macquarie gets the shares from me for free, and possibly a few cents on the dollar when they take me to bankruptcy court.

Which one sounds more Macquarie like to you?

 

[investorpaul]

Re: Brisconnections shareholders - financial ruin

Bolton could get together with some of the institutions who want out, together they could buy the remaining 20% on market and try and take have enough ownership to cancel the structure.

I dont know if that would work? It would be incredibly risky as you could fall short by just 0.01% of the companies issued shares and not have the percentage required to force the change.

It will be interesting to see if Bolton did in fact buy the shares knowing full well of the installment and if he did to find out why

 

[White_Knight]

Re: Brisconnections shareholders - financial ruin

What if the holder was an overseas resident/citizen?

Could Macquarie still take them to bankruptcy court?

 

[Shine]

Re: Brisconnections shareholders - financial ruin

Shine and Nervous - here's a link to Dondi's lastest post - he said he was involved in the action group. Sincerely wishing you all the b...t news re Brisconnections! Thanks again. :)

 

[Enzyme]

Re: Brisconnections shareholders - financial ruin

A little bit of background.

I am a young man, early 20's with no dependents or financial liabilities. I have about 30,000 saved up in cash and share investments. I have no holding company structure though.

What would be the possible ramifications of splashing some cash on a decent stake in Brisconnections? Looking at the market depth now there are 79million shares for sale at 0.01c, and i assume more could be obtained at that price.

The risks of the venture are no doubt colossal but what is the potential for profit on the upside? Including banding together with other minority retail holders (eg Mr Bolton) and trying to put the squeeze on MQC and the company.

Don't make the mistake of thinking of this as a $1 share which has lost 99.9% of its value. It is a $3 share that has lost just 33.3% of its value. There is a long way for this to fall yet before there is any upside.

Compare BrisCon to its cousin RiverCity. Both are toll roads with tunnels in Brisbane. Both were IPOd as stabled securities with installment payments. Both suspended their dividends when thing got tough late last year. (BCS' $00005 dividend is effectely a suspension)

But RiverCity has a few significant advantages: It IPO'd a few years earlier. All of the installment payments have already been made. They are 75% of the way through their work and are on schedule - so they have a lower risk of hitting construction problems or delays. They'll be seeing paying customers in 18 months, while BrisCon are at best three and a half years away from earning a cent. RiverCity also do not have their major shareholder trying to wind up the company.

RiverCity are down 86%. If we are generous and say BrisCon will do as well then the fair price for BrisCon after the two installments is around $0.42.

So the possible ramifications of investing in BrisCon now are something like this: Invest $1,000 now and get a million shares at $0.001. Pay $2,000,000 in the two installment payments over the next 15 months. Then be left with the value of the investment optimistically valued at $420,000 after the second installment. A return of -79% over 15 months if you were lucky enough to have $2 million available to avoid being bankrupted.

I suspect that you could probably find better investments. If you particularly want to own a toll road & tunnel in Brisbane, buy RiverCity.

 

[tigerboi]

Re:bolton is no fool

It will be interesting to see if Bolton did in fact buy the shares knowing full well of the installment and if he did to find out why

like i said bolton is no fool,just google him & see what you get.

he owes $93m on a project supposedly worth $4.8b,which he cant pay..sounds like a deadset ransom to me.

interesting to see what happens

 

[alphaman]

Re: Brisconnections shareholders - financial ruin

I just read the AFR about the wind up.

Funny how Trevor Rowe questioned the solvency of Australian Style - "Based on the accountancy files, I just can't understand it."

What an irony!

 

[RodH]

Re: Brisconnections shareholders - financial ruin

I can understand individual traders accidentally buying this, but why did Bolton buy it? You'd think if he was running 'Australian Style Investments' he'd at least read the fine print before making a trade?

 

[Enzyme]

Re: Brisconnections shareholders - financial ruin

I would like to make one suggestion for Mr Bolton.

At the EGM, before moving his windup motion he should first move a motion concerning the percentage of directors salary that must be directed to purchasing Briscon shares. That amount is 40% of the $210k salary for the chairman, and 20% of the $110k-130k for the other directors as defined in the PDS . Currently that money is being paid into a trust account and the shares will purchased in June, after the next instalment. Bolton's first motion should be to change this and force all accumulated monies be used to purchase the shares IMMEDIATELY, and in future all purchases will be done in line with the Director's pay arrangements. It Trevor Rowe gets paid fortnightly, then 40% of his salary will purchase new shares every fortnight.

This motion should only need 50% support, so it would be much easier to pass than his windup motion.

Once passed Trevor Rowe would suddenly be facing a personal liability somewhere well in excess of $30 million. I sure he would suddenly become far more sympathetic to the plight of the shareholders that he has been threatening with debt collectors. He claims to be acting in the best interests of unit holders, but he isn't one himself. I think he'd have a better understanding of what the interests of unit holders are if he bacame one.

I am convinced that TR has not and is not acting in the interests of his shareholders. Objectively speaking which would be best for the interests of the superannuation of the Queensland public servants who have their savings managed by QIC (Briscon's second biggest shareholder)?

1. Support Bolton's motion. Write off the $30 million or so they've already invested. Possibly receive a fraction of that money back as the company is wound up, but don't count on it, or;

2. Defeat Bolton's motion. Sink another $60 million or so of the retirement savings of ordinary Queenslanders on top of what they've already invested through the next two instalments, and then have that $60m fall to around $12.6m in fifteen months time (generously based on River City's fully paid performance).

There seems no question to me. Like most other shareholders the interests of the Queensland public servants represented by QIC would be far better served by supporting Bolton and writing off their investment and putting their next $60 million somewhere where it will earn them money rather than lose them close to 80% of it. Unfortunately I don't think that will happen, as Rowe chairs QIC as well. His position as chairman of both companies has always been a conflict of interest, but now it must be untenable. He'll get QIC to try to defeat Bolton's motion, even though it is the wrong thing to do for his QIC members.

I do hope that Bolton and other shareholders lobby the board of QIC to make their decision in the best interests of their members and get Rowe to stand aside from the process. It will be difficult for Bolton to succeed in getting his required 75% if QIC stand against him.

 

[krk004]

Re: Brisconnections shareholders - financial ruin

FYI;

http://www.bcsunitholders.com.au/

 

[krk004]

Re: Brisconnections shareholders - financial ruin

& this;

http://business.theage.com.au/business/stonewaller-nick-hard-to-pin-down-20090218-8bj5.html?page=-1

quote - "Goldman Sachs JBWere was engaged by BrisConnections to try to find an institutional buyer for his stake."

 

[Prospector]

Re: Brisconnections shareholders - financial ruin

Oh damn, we have domain names registered and operating with his company....

 

[investorpaul]

Re: Brisconnections shareholders - financial ruin

& this;

http://business.theage.com.au/business/stonewaller-nick-hard-to-pin-down-20090218-8bj5.html?page=-1

quote - "Goldman Sachs JBWere was engaged by BrisConnections to try to find an institutional buyer for his stake."

The article makes it sound like he bought without knowing about the extra installments. If thats the case he must be trying to pull himself out of the hole by buying more shares and calling the meeting

 

[Prospector]

Re: Brisconnections shareholders - financial ruin

The article makes it sound like he bought without knowing about the extra installments. If thats the case he must be trying to pull himself out of the hole by buying more shares and calling the meeting

Thats exactly the case.

 

[Sunder]

Re: Brisconnections shareholders - financial ruin

The article makes it sound like he bought without knowing about the extra installments. If thats the case he must be trying to pull himself out of the hole by buying more shares and calling the meeting

According to Rowe, unitholders will still be liable to pay the two further $1 instalments, even if Bolton is successful at the EGM.

His legal advice had better be totally water tight - although I suppose if you can't pay $97 million dollars, you might as well go for the full 4.8 billion (Or however much you need to get 75%), right?

Although considering the publicity, that makes it obvious that he knows the liability, if he continues to buy, and that's his take, he may be up for criminal fraud charges instead.

 

[Enzyme]

Re: Brisconnections shareholders - financial ruin

According to Rowe, unitholders will still be liable to pay the two further $1 instalments, even if Bolton is successful at the EGM.

Rowe's statment seems to be in conflict with his own PDS. On page 143:

Subject to the Corporations Act and the Listing Rules,
BCMCL may revoke or postpone the payment of the Second
Instalment and/or the Final Instalment and may extinguish
in full or in part any liability of Unitholders in respect of any
monies unpaid on the Stapled Units.

 

[Gazzer]

Re: Brisconnections shareholders - financial ruin

His legal advice had better be totally water tight - although I suppose if you can't pay $97 million dollars, you might as well go for the full 4.8 billion (Or however much you need to get 75%), right?

Although considering the publicity, that makes it obvious that he knows the liability, if he continues to buy, and that's his take, he may be up for criminal fraud charges instead.

What is criminal or fraudulent about what he is doing?

 

[prawn_86]

Re: Brisconnections shareholders - financial ruin

What is criminal or fraudulent about what he is doing?

If he now knows about the liability, and keeps buying even though he knows he cannot afford to pay the instalments, this is probably a breach of company director trading laws.

 

[thermalmonster]

Re: Brisconnections shareholders - financial ruin

I cant see that.

He may be speculating that there may be a market for them.
I mean they are at 0.001c
he could argue that in his opinion they are going to go to 0.002c
and he wants to sell them before the call up date.

You cant stop the guy buying the shares.
If you can stop him, then there are another 100 of us that should of been stopped from buying them.