BCS - BrisConnections Unit Trusts

[aleckara]

Re: Brisconnections shareholders - financial ruin

Because in terms of their $3 fully paid price no one currently values them $2 or more.

If (like TLSCA) the majority of the fully paid share price was covered by the the first instalment (say, $2 for example) then there still might have been a market for these securities even in the current depressed market.

Of course I understand that. I'm speaking for the likes of Mum and Dad out there and their thinking process. Most think a toll road at the bottom of the market might be a safe buy and that it will recover. They barely understand share trading (other than the basics) yet alone the complexities and risks of warrants.

They would hear the terms warrant, $2 unpaid, and would ignore it thinking it was a technical detail. They are under the illusion of limited liability like most new investors are. There should be access rights if you want to take on more risk than this. These investors signed up for a share trading account, not a warrant account. They should be able to appreciate the right of limited liability for all stocks they are able to purchase. If they want to purchase these sort of stocks they should need to apply for a higher level of risk allowance in their trading account (similar to options trading levels).

Companies are really hungry for cash these days, and they are getting reckless. Guess that's what happens when you are put into a corner.

 

[tcoates]

Re: Brisconnections shareholders - financial ruin

Was a little hard to find, but the this link

http://www.asx.com.au/ListingRules/guidance/gn18_market_codes_and_trading_procedures.pdf

explains the different security codes. See attachment within the document.

Whatever happened to "cavet emptor"?

Tim

PS. I do feel for those who got in at the beginning. But if you were turn a quick profit... and with all the news articles on this stock... well...

 

[rocket12]

Re: Brisconnections shareholders - financial ruin

Was a little hard to find, but the this link

http://www.asx.com.au/ListingRules/guidance/gn18_market_codes_and_trading_procedures.pdf

explains the different security codes. See attachment within the document.

Whatever happened to "cavet emptor"?

Tim

PS. I do feel for those who got in at the beginning. But if you were turn a quick profit... and with all the news articles on this stock... well...

Well done, I gave after 5 hours of looking for it!! Still cant find it, where is the initial link (I assume it's listing rules) on the main page http://www.asx.com.au/

The people that have got burnt got in before it hit mainstream media, that's why nobody is buying now because it's all over the press.

 

[barney]

Re: Brisconnections shareholders - financial ruin

1. Donate them to charity. Lots of charities have an off-market transfer form online that lets you transfer shares to a charity. Google it and see. As the transfer does need someone at the charity to sign the form and send it on it might not work 100% of the time. But if you systematically tried every charity you could find I'm sure you'd get someone agree to take on your 'donation' without realising the implications.

Geez Enzyme ..... Remind me not to buy a used car from you .... LOL

 

[Prospector]

Re: Brisconnections shareholders - financial ruin

1. Donate them to charity. Lots of charities have an off-market transfer form online that lets you transfer shares to a charity. Google it and see. As the transfer does need someone at the charity to sign the form and send it on it might not work 100% of the time. But if you systematically tried every charity you could find I'm sure you'd get someone agree to take on your 'donation' without realising the implications.

2. Donate them to a homeless person. Find a homeless person in your nearest large city and offer them a fist full of cash to sign your form. The homeless person benefits from getting your cash and have nothing to fear from the company debt collectors - because they have nothing to lose.

3. Go on an overseas trip to a poor country and offer a poor local a fist full of cash to sign the form. This is very similar to the above option.

4. Donate them to a person who doesn't exist. Make up a name and get a mate to sign for them. There is a precident where someone has transferred shares to their pet budgie, but it is probably illegal. !

Are you serious? I hope he has more ethics than any of these suggestions.

I think Ms Fang's shares were sold on a Sunday - so must be an offline transfer.

 

[rocket12]

Re: Brisconnections shareholders - financial ruin

Was a little hard to find, but the this link

http://www.asx.com.au/ListingRules/guidance/gn18_market_codes_and_trading_procedures.pdf

explains the different security codes. See attachment within the document.

Whatever happened to "cavet emptor"?

Tim

PS. I do feel for those who got in at the beginning. But if you were turn a quick profit... and with all the news articles on this stock... well...

OK I found it eventually, hehe a little hard to find...

one of of the 13 links on the left hand side of the main page
www.asx.com.au click on the "market supervision and rules" link

Then in the drop down menu click one of the 11 links "rules guidance notes and waivers"

Then click on one of the 19 links in the middle of the page "guidance notes"

Then click on one of the 27 links "market codes and trading proceedures"

Then scroll down 5 pages and you find the information that apparently only the dumbest of retail investors doesn't know....

Cant believe I missed it....

 

[TheAbyss]

Re: Brisconnections shareholders - financial ruin

Back in October Brisconnect released a statement regarding deferring the dividend payment and listed their reasons which were based around share price dilution and the quantity of smaller holders joining the register. The release had the below statement included so if you purchased for dividends this surely must have been noticed by potential and current holders in October?

Any other purchasers since October should be looking in the mirror and asking why they are buying and selling shares at all. That isn't to say we don't all make mistakes and this is right up there with the all time best but surely if you are a trader you must be doing some sort of research? I would have thought a dividend statement would grab the eye?

If research isnt for you then a broker is what you should be using to buy and sell shares. Their commission covers their skill sets which would surely have including knowling what CA extensions meant? After all isnt this why brokers have a job? If a broker didnt advise you of the stapled component they would be responsible (Perhaps?).

Full market release here

http://www.brisconnections.com.au/Portals/0/docs/660958_081030.pdf

Excerpt from dividend statement in October

About BrisConnections

An investment in BrisConnections Unit Trusts comprises a stapled security made up of one unit in BrisConnections Investment Trust and one unit in BrisConnections Holding Trust. Stapled securities in BrisConnections are partly paid securities and are listed on the Australian Stock Exchange under the code “BCSCA”. There are 2 further instalments of $1.00 each per stapled security payable on 29 April 2009 and 29 January 2010 respectively.

 

[rocket12]

Re: Brisconnections shareholders - financial ruin

Back in October Brisconnect released a statement regarding deferring the dividend payment and listed their reasons which were based around share price dilution and the quantity of smaller holders joining the register. The release had the below statement included so if you purchased for dividends this surely must have been noticed by potential and current holders in October?

Any other purchasers since October should be looking in the mirror and asking why they are buying and selling shares at all. That isn't to say we don't all make mistakes and this is right up there with the all time best but surely if you are a trader you must be doing some sort of research? I would have thought a dividend statement would grab the eye?

If research isnt for you then a broker is what you should be using to buy and sell shares. Their commission covers their skill sets which would surely have including knowling what CA extensions meant? After all isnt this why brokers have a job? If a broker didnt advise you of the stapled component they would be responsible (Perhaps?).

Full market release here

http://www.brisconnections.com.au/Portals/0/docs/660958_081030.pdf

Excerpt from dividend statement in October

About BrisConnections

An investment in BrisConnections Unit Trusts comprises a stapled security made up of one unit in BrisConnections Investment Trust and one unit in BrisConnections Holding Trust. Stapled securities in BrisConnections are partly paid securities and are listed on the Australian Stock Exchange under the code “BCSCA”. There are 2 further instalments of $1.00 each per stapled security payable on 29 April 2009 and 29 January 2010 respectively.

Iv'e bought hundreds of shares online, and made myself and the govt some nice coin. I have admitted I didn't go through the hundreds of released announcements. I went to the brisconnections website and looked over the investor page and it all looked good, I looked over all the research pages and decided to buy. I didn't realize I had to investigate this hidden sting.

I will continue to use Commsec and continue to make and lose money. But obviously I now know to steer away from 5 letter codes that have a "c" as the fourth letter.

But the fact remains that Commsec etc will always be around, and retail investors will always be around, so unless the companies listing these contributing shares ensure that the online brokers inform their clients this will all happen again.

I am perfectly happy to admit to making mistakes, but I don't think you had to be that much of a dummy to fall for this one.

 

[TheAbyss]

Re: Brisconnections shareholders - financial ruin

Rocket12. Sorry if i was a bit blunt. I do acknowledge that it was a simple mistake to make and the realisation must have been horrendous when the full implications were realised.

The end result will be interesting to say the least and i wish all share holders well with this one.

 

[rocket12]

Re: Brisconnections shareholders - financial ruin

Rocket12. Sorry if i was a bit blunt. I do acknowledge that it was a simple mistake to make and the realisation must have been horrendous when the full implications were realised.

The end result will be interesting to say the least and i wish all share holders well with this one.

No probs, yes I had kittens for a couple of days when I found out, but have no stress now. The good thing for all that fell for it is we have plenty of time to protect our stuff to make it as hard as possible for them to get anything. Iv'e allready tranfered my shares to an orphanage in Los Lobos...:

 

[TheAbyss]

Re: Brisconnections shareholders - financial ruin

Wise move.

When did you buy these shares Rocket? The news articles have been around since november warning oif this stuff. Even the news link on Commsec had a reference dated to prior to your posted Commsec shots.

20/20 hindsight is a better view of course.

I have sent an email into Bcs to test the water on their position so let you know how it goes.

 

[cuttlefish]

Re: Brisconnections shareholders - financial ruin

About BrisConnections

An investment in BrisConnections Unit Trusts comprises a stapled security made up of one unit in BrisConnections Investment Trust and one unit in BrisConnections Holding Trust. Stapled securities in BrisConnections are partly paid securities and are listed on the Australian Stock Exchange under the code “BCSCA”. There are 2 further instalments of $1.00 each per stapled security payable on 29 April 2009 and 29 January 2010 respectively.

Abyss - what this statement doesn't indicate is whether the intalments are mandatory or optional. As has already been discussed in this thread, there are instalment products (instalment warrants) on the ASX where the instalment is optional - I don't see it as clear to anyone by this statement that the instalment was mandatory, except via explicit reading of the sub-sections in the PDS.

I think the mistake made is completely understandable - I do a lot of research on stocks that I purchase but I could easily have made the mistake on this one of not realising the additional instalment payments were mandatory and not optional. I'd like to think I would have picked up on it, but who knows.

 

[TheAbyss]

Re: Brisconnections shareholders - financial ruin

Just did a quick search and warning signs from as far back as the day this dog listed July 2008. There has been fair warning here for quite a while for anyone with a passing interest imo

August 02, 2008 12:00am

INVESTORS have fled the year's largest sharemarket float, with $240 million

wiped off BrisConnections market capitalisation in barely 48 hours. The price of BrisConnections stapled securities yesterday slumped to a low of 36.5c, well down on their $1 issue price ahead of its float on Thursday.

The stock ended down 2.5c or 6 per cent at 38.5c on volume of 35.5 million securities. The fall translates to 20 per cent of the issued stock changing hands in two days.

Queensland Investment Corp, which holds 6.4 per cent, was particularly hard hit, watching $15 million wiped off the value of its investment since the market debut.

However, the $1.23 billion float of the 6.7km toll road linking Brisbane with the airport and northern suburbs is shaping up as a bonanza for investment banks, particularly Macquarie, which stands to reap $110 million in transaction fees.

The bulk of yesterday's selling was thought to have come from institutions cutting their losses, particularly given two more instalment payments on the securities are required for BrisConnections of $1 each.
The largest parcel traded was for more than 10 million BrisConnection securities.

Chairman Trevor Rowe said it was hard to tell who was selling as it involved a lot of nominee companies.

"Clearly, this is a very volatile market with strong negative sentiment but notwithstanding that this is a company with quality assets," he said.

"It is basically three toll roads built into one across Brisbane's CBD and port to the airport and what the market is not doing is differentiating the quality of these projects."

Mr Rowe expected that once sentiment settled, buying would come back into the market because the stock represented a 28 per cent yield on current prices.

He pointed out the contract was guaranteed by Leighton Holdings and "they have not failed to complete a project in their history".

Analysts said those who subscribed to the issue in May were facing a very different market today.

 

[rocket12]

Re: Brisconnections shareholders - financial ruin

Wise move.

When did you buy these shares Rocket? The news articles have been around since november warning oif this stuff. Even the news link on Commsec had a reference dated to prior to your posted Commsec shots.

20/20 hindsight is a better view of course.

I have sent an email into Bcs to test the water on their position so let you know how it goes.

My first purchase was early Nov up until mid nov. There were no articles when I bought them as it is one thing I do like to lookup on Commsec. Although I've learnt since a google news search would have helped me a lot...Anyway this one is definately my last post...Thanks everyone!!

 

[TheAbyss]

Re: Brisconnections shareholders - financial ruin

Response from BCS below. I have removed contact names etc. Happy to post if deemed appropriate. Dead end is the bottom line. Only out i can see is Government cancel the project and start a new one. That relieves everyone of the responsibilites and saves Campbells butt as he and QIC are the chiefs on this traiun wreck.

See this link for a great summary of the fiasco.

http://www.maynereport.com/articles/2008/07/31-1409-2667.html

Thank you for your email.

If you purchased at the current market rate $2000 of stapled securities would purchase you 2 million securities. There are two more instalments owed, on each stapled security, worth $1 each, which would mean you are liable to pay $2 million dollars in April 29,2009 and another $2 million dollars in January, 2010.

If you do not want to be liable to pay an instalment, you need to have sold your stapled securities before the date when the liability for payment of that instalment is determined. You should be aware that there may be a limited market for BrisConnections stapled securities in the periods after the dates when liability for payment is determined, but prior to the instalment payment dates, which may affect your ability to sell your stapled securities during these periods.

We suggest that you seek advice regarding your investment from your broker, accountant or other professional adviser. We cannot provide financial advice to you.

BrisConnections cannot create a market for securities. However, we continue to conduct briefings with analysts, brokers and institutional investors and are in regular contact with the investment community regarding BrisConnections’ business and prospects in compliance with BrisConnections continuous disclosure requirements.

It is not possible to change or defer the instalment structure and still preserve the integrity of the project. Nor is it possible for BrisConnections to buy-back securities off persons who are unable or unwilling to pay the instalment or cancel the instalment and still preserve the integrity of the financial and project structure.

Thank you for your interest and support of BrisConnections.

 

[Julia]

Re: Brisconnections shareholders - financial ruin

1. Donate them to charity. Lots of charities have an off-market transfer form online that lets you transfer shares to a charity. Google it and see. As the transfer does need someone at the charity to sign the form and send it on it might not work 100% of the time. But if you systematically tried every charity you could find I'm sure you'd get someone agree to take on your 'donation' without realising the implications.

Good Lord, I hope you're being facetious. Suspect you are actually serious.
Morality obviously isn't a priority.

2. Donate them to a homeless person. Find a homeless person in your nearest large city and offer them a fist full of cash to sign your form. The homeless person benefits from getting your cash and have nothing to fear from the company debt collectors - because they have nothing to lose.

You don't think a homeless person already has quite enough stress without getting hassled by debt collectors?

 

[Julia]

Re: Brisconnections shareholders - financial ruin

http://www.asx.com.au/ListingRules/g...procedures.pdf

Tim, thanks for posting that link.

I recall a few months ago when Incitec Pivot did a 20 to 1 split, for a while they had, I think, "CA" attached to the IPL code.

Then it reverted to the plain IPL.

Does anyone know why this was?
Presumably to let potential buyers know of the altered value of the share?

 

[tcoates]

Re: Brisconnections shareholders - financial ruin

Julia,

it was IPLDA

DA = deferred settlement

rocket12,

My first purchase was early Nov up until mid nov. There were no articles when I bought them as it is one thing I do like to lookup on Commsec.

You are right about Commsec. Even google finance had very few news items. There were plenty of (enough) articles in the newspapers (at least in Brisbane). ODD.

Tim

 

[lesm]

Re: Brisconnections shareholders - financial ruin

It has been interesting observing some of the comments in this thread. Ihave no interest or holindings in this company.

A number of posters need to seriously review their morals and ethics, as some suggestions have the potential to fall foul of the relevant 'fraud statutes'. Be aware that any action or activity intended to deliberately deprive another party from exercising its legal rights to recover a debt owing to it or to avoid paying the debt may may be considered a fraudulent act. In these circumstances the court does have the power and authority to reverse any associated transactions in order to recover assets. Be aware that it is also a criminal act. Suggesting or advising another party to perform an act that may by defintion be considerd illegal has potential ramifications for the suggestor.

While a level of sympathy or compassion may be warranted, there are a number of practical realities realated to trading or investing in the equities market.

The 'CA' code suffix has a known meaning and usage on the ASX and this in itself should have flagged the nature of the share being offered or that further research needed to be undertaken if the buyer was not aware of the suffix.

It appears that other installment based shares, such as 'tlsca' didn't ring any bells for for a range of people. Hence, these are not a new product style of share offering. Similar to other shares of this nature, any purchaser takes on the obligation to pay the installment, no differently to a purchaser that bought these shares as part of the original IPO.

Although people may not have read the original PDS, information was available, as to the type of share, via the relevant ASX announcements or news on sites such as Commsec. The investor presentation was posted on the Commsec site with a date and title of '10/9/2008 9:57 am Investor Presentation'. It is shown in the list of announcements from the Comsec site higher in the thread. The information as to nature of the share/offering is included in the presentation.

Anyone reading this would be aware that the company was raising capital to fund the project and that distributions would be made to shareholders as part of this offering. It is straightfoward to determine that the company would earn no revenue until the toll roads were open and operational. Hence, any investor would need to make a decision to purchase or not would make a decision based on the information. Speculator traders would probably use a different basis for buying or selling.

The dilemma in today's market is that with the advent of online trading/investing and the ease by which people can buy and sell shares, is that the people lacking knowledge or any level of sophistication can make costly mistakes.

By forgoing the the use of a broker or financial advisor, probably to reduce costs or lack of confidence in these parties, people are doing it themselves. In doing so they are inferring that they have a reasonable understanding and knowledge of market operation and structure, including the various codes used to describe different types of shares or transactions. There is no pre-qualification required to determine even a fundamental understanding let alone any understanding at all, just open and fund an account with an online broker and trade away.

It would be further assumed that anyone dealing in the markets in this manner is conducting a level of research or anlaysis prior to making a decision to purchase or sell shares. Whether it is by fundamental analysis, technical analysis, reading tea leaves or any combination is neither here nor there.

There are risks under any approach and people can only be protected to a certain level, but you can't always protect them from themelves.

In this situation, we have a company that has issued installment based shares, which it is entitled to do, but it shares have basically hit the bottom as far as a share price can go. We now find that a number buyers of these shares have bought substantive numbers of shares and incurred a significant financial liability. To make matters worse there are no buyers for these shares, so the previous buyers cannot sell and the equity market has no formal requirement to 'make a market' for individual shares.

This is further exacerbated by the current market conditions.

If there was a market and the sellers could get out we probably wouldn't here anythin about this situation. What is also intersting of the buyers of these shares how many were actually investors and how many were traders hoping for quick profit from fluctuations in the share price.

Besides those who have made an honest mistake by not understanding the nature of the 'CA' code or the installment liabilities is, how many will piggyback on any legal action to avoid the installment payment, if it occurs, in attempt to nullify or reduce the financial liability.

It will be intesting to watch events as they unfold in the ensuing months. If Slater and Gordon are already looking at this it will be interesting to see how they proceed if they believe they can make a case. A trial would be interesting, as it has the potential to create some legal precedents in this area. Regardless of the outcome it would be intesting to see what, if any impact it may have related to online trading and the ASX, especially with regard to installment based shares.

For those holding substantive numbers of these share, I hope everything works out for you and that you are able to dispose of your shares before the installment record date via normal means.

 

[doctorj]

Re: Brisconnections shareholders - financial ruin

Although people may not have read the original PDS, information was available, as to the type of share, via the relevant ASX announcements or news on sites such as Commsec. The investor presentation was posted on the Commsec site with a date and title of '10/9/2008 9:57 am Investor Presentation'. It is shown in the list of announcements from the Comsec site higher in the thread. The information as to nature of the share/offering is included in the presentation.

I doubt the information 'being available' is sufficient for it to be enforceable. I'm not a lawyer, but I recall a case where the seller of a house didn't tell the buyer that a major highway was to be built very near to the house. After buying the house, the buyer found this out and the sale was nullified by the court. The information being available to the public (at the planning office, fliers in the area etc) was insufficient to make the contract enforceable. Surely it's the same concept here?