BCS - BrisConnections Unit Trusts

[Prospector]

Re: Someone is accumulating BCSCA

Hey Sunder, you have a lot of reading to catch up on. I think BCSCA have closed the trading gap dates between sale date and determination date by asking for a market hold to allow for the three day settlement to be a non issue. Cant remember the exact dates now. Been reading too much and I am also too

As such, BrisConnections made an application to, and has received from, ASX agreement to suspend
quotation of the stapled units following the last day for trading the stapled units on a “call unpaid” basis.
This means that ASX will not offer a deferred settlement market in the second call paid stapled units.
As a result:
• ‘Second call paid’ units (ASX code: BCSCB) will be suspended from quotation commencing
Thursday 16 April 2009.
• Trading in ‘second call paid’ units (ASX code: BCSCB) will commence on Thursday 7 May 2009 on
a normal T+3 trading basis.
In effect, this means that instead of deferred settlement trading in BCSCB units during the period between 16 April and 6 May (both dates inclusive), there will be a short ‘gap’ or cessation in on‐market trading in BCS stapled units. BCMCL are of the view that this is necessary to try and avoid circumstances that could otherwise lead to considerable market disruption.

The last line is a doozy though!

 

[sails]

Re: Someone is accumulating BCSCA

Looks like new rules are to be implemented on 1st May: http://www.wabusinessnews.com.au/en-story/1/71589/New-rule-for-part-paid-investments- - tiny excerpt below:

ASX today said brokers will be required to obtain from retail clients a signed agreement that their clients are aware of responsibilities associated with partly paid securities.

also http://business.smh.com.au/business/briscon-instalment-mess-sparks-new-asx-rule-20090406-9uen.html

 

[redgum]

Re: Someone is accumulating BCSCA

Just been lurking here, enjoying the ride.
If you are interested the decision on ASI v BrisCon is here:
http://www.austlii.edu.au/au/cases/vic/VSC/2009/128.html

 

[wonderrman]

Re: Someone is accumulating BCSCA

Just been lurking here, enjoying the ride.
If you are interested the decision on ASI v BrisCon is here:
http://www.austlii.edu.au/au/cases/vic/VSC/2009/128.html

Interesting and lengthy reading. I read from no. 70 to 125, gives lots of info on Bolton and his intentions. Worth a look.

w

 

[Warren Greenspan]

Re: Someone is accumulating BCSCA

Hi all
First post. Have been reading the BCSCA story from the start. Truly horrifying.
I don't know if it's been posted but there's an article on 'the bull'.com about brokers now needing to get a signed agreement from punters before selling partly paid shares. Nick Sherry authourised it today in response to this debacle.

 

[sails]

Re: Someone is accumulating BCSCA

Here is the link to the official ASX announcement regarding the proposed changes: http://www.asx.com.au/about/pdf/mr060409_partly_paid_newrule.pdf

Looks like it will be along the lines of current approvals required for options, warrants and futures:

Market Participants of ASX (brokers) will be required to obtain from retail clients a signed agreement that their clients are aware they have a responsibility to obtain and read a copy of a prospectus, product disclosure statement or information memorandum produced by the product issuer when they are entering into a transaction to buy a partly paid security for the first time. Client agreement rules of this kind already exist for complex products such as options, futures and warrants.

These changes do not include partly paid securities in No Liability companies. The reasoning is that holders of those securities can forfeit their shares if they are unable to pay. Apparently, of the 18 partly paid securities listed on ASX, 13 are issued by No Liability companies leaving 5 affected by the new rules in the link above.

Certainly a step in the right direction for preventative purposes in the future. Hopefully there will be a positive outcome for the current holders still caught who purchased without any such notification as that in the notice above.

 

[sails]

Re: Someone is accumulating BCSCA

These are the other 4 partly paids out there:

Apart from BrisConnections there are four entities with partly paids -- Multiplex Prime Property Fund, Westpac Office Trust, Solagran and Citadel Resources.

And it looks like the client will only need to sign one agreement with the broker and then they are free to trade in these securities when ever they want. But at least they will have had a heads up.

In future the first time a retail client buys a partly paid security the broker will be required to obtain a signed agreement that the client is aware of his or her responsibility to obtain and read a copy of the prospectus, PDS or information memorandum produced by the issuer.

Source: http://www.theaustralian.news.com.au/business/story/0,28124,25300007-16941,00.html

 

[Enzyme]

Re: Someone is accumulating BCSCA

The proposal from Macquarie and other parties are outlined in this ASX release

Defaulting unitholders will forfiet theis shares, but no other action will be taken - but only if the windup motion is defeated. Suprisingly Deutsche Bank are onboard with this. More detail to follow with a more detailed ASX release tomorrow...

 

[Macquack]

Re: Someone is accumulating BCSCA

The proposal from Macquarie and other parties are outlined in this ASX release

Defaulting unitholders will forfiet theis shares, but no other action will be taken - but only if the windup motion is defeated. Suprisingly Deutsche Bank are onboard with this. More detail to follow with a more detailed ASX release tomorrow...

Looks like Bolton and Byrnes may be left out in the cold.

No sympathy if those guys lose out, they are just parasitic opportunists.

 

[drsmith]

Re: Someone is accumulating BCSCA

The proposal from Macquarie and other parties are outlined in this ASX release

The first thing that's obvious is that Macquarie and Nick Bolton were unable to reach agreement on a restructure.

Had the underwriters gone down this route months ago much of the current fiasco may have been avioded. It is extrordinary in the extreme that Brisconnections directors and the underwriters thought they would collect instalment monies from retail holders who purchased large chunks at a token share price.

It will be interesting to see in what proportion Macquarie and DB cover the instalment payments and whether it's in line with the original underwriting agreement. It will also be interesting to see if QIC pours more of it's capital down the drain come instalment time given they can now opt out.

The most important thing however is that it's good news at last for the retail holders.

 

[Macquack]

Re: Someone is accumulating BCSCA

It will also be interesting to see if QIC pours more of it's capital down the drain come instalment time given they can now opt out.

I dont think the olive branch will be extended to QIC.

"Under the proposal Maccquarie and Deutsche would not require retail BCS unitholders to be pursued for the installment.......provided all resolutions to be put to the forthcoming BCS unitholder meeting are not passed."

 

[drsmith]

Re: Someone is accumulating BCSCA

In terms of corporate law can such a concession be offered to one group of unitholders and not another or must it be offered uniformly to all unitholders ?

 

[brty]

Re: Someone is accumulating BCSCA

Sounds like this will go back to the courts if/when MQG differentiate between holders of units. I'm surprised that ASIC would allow such a deal.

It seems to me that what MQG are really worried about is this from todays age...

Such a vote could trigger provisions in the company's banking covenants, allowing senior lenders, including ANZ, to withdraw more than $3.1 billion of finance for Brisbane's Airport Link, jeopardising the $4.8 billion project.

...which really means that the $270m could be small change in comparison to what they would otherwise be up for.

brty

 

[drsmith]

Re: Someone is accumulating BCSCA

According to the following article from The Australian $2.9bn of bank finance is triggered with the payment of the upcoming instalment. That being the case Brisconnections don't currently have most of the money required to build the road.

http://www.theaustralian.news.com.au/business/story/0,28124,25265787-5018061,00.html

An updated financial statement will make interesting reading for both existing shareholders and nervous banks about to lend to the project. I note that the units have just gone from trading halt to suspension.

Are those banks now scrambling for the exit ?

 

[drsmith]

Re: Someone is accumulating BCSCA

The proposal from Macquarie and other parties are outlined in this ASX release

Defaulting unitholders will forfiet theis shares, but no other action will be taken - but only if the windup motion is defeated. Suprisingly Deutsche Bank are onboard with this. More detail to follow with a more detailed ASX release tomorrow...

At the moment a day is a very long time in the life of Brisconnections.

http://www.asx.com.au/asxpdf/20090408/pdf/31gzv6m7x7f3kw.pdf

Not happy with the last week's court decision, Macquarie is back in court trying to stop the wind up resolution being put to unitholders.

http://www.brisbanetimes.com.au/qld-news/qld-court-may-stop-brisconn-vote-20090408-a0eu.html

Normal ???? trading of the units has resumed.

 

[cuttlefish]

Re: Someone is accumulating BCSCA

What an absolute shambles that should never have gotten to the stage it did. The product in its form (binding instalment payments) should probably never have made it in front of retail investors on a secondary market in the first place, and the ASX should have stepped into the situation before the price got so ridiculously out of hand.


But Macquarie made the bed ... they should lay in it imo. They were happy to dump stock to retail investors that couldn't pay on-market last year, and they were happy to jump back in and buy some back when there was a threat to their control. Doesn't seem to be any ethics or scruples involved at all - now seems like they are prepared to do a deal with retail investors while shafting bolton - when in all likelihood Macquarie wouldn't be offering any deals to anyone if bolton hadn't reared his head in the way he did.

The ASX and regulators need to accept some responsibility for this show even getting on the road though. And the company itself - which also had plenty of opportunities to mediate some commonsense ground long ago but took a self serving aggressive approach instead.

What an utter mess.

 

[investorpaul]

Re: Someone is accumulating BCSCA

Deutsche Bank Pulls the Pin on deal for Unit holders

Deutsche Bank has pulled the pin on a potential lifeline for BrisConnections

 

[alphaman]

Re: Someone is accumulating BCSCA

Looks like Deutsche Bank sees BCS as toxic and simply wants to get rid of it. MQG on ther hand hand, seems to think toxic or not, the fees they can extract out of BCS will compensate for their costs.

By the way, has Capital Group made their intention known? It has been assumed that they will vote with MQG, why is that?

 

[drsmith]

Re: Someone is accumulating BCSCA

What an absolute shambles that should never have gotten to the stage it did.

To summarise.

1) Holders of most of the units are unable to pay future instalments the first of which is due at the end of this month.

2) One of the underwriters (Deutsche Bank) is is trying to avoid it's obligations under the instalment underwriting.

3) There's ~$3bn of project finance due from the banks when the second instalment is paid. Today's announcement is not exactly going to inspire confidence within the banking syndicate.

Yes, it's one hell of a mess. It will be interesting to see at what point the Queensland Government is forced to step in.

EDIT: From Business Spectator.
http://www.businessspectator.com.au...ections-pd20090408-QWAXK?OpenDocument&src=sph

 

[brty]

Re: Someone is accumulating BCSCA

I'm waiting for the movie about this to come out If this saga was a work of fiction, nobody would bother with it because it is so far fetched.

Macquarie are so desperate for this to continue that they deliberately released a plan knowing that the co-underwriter did not agree, nor would support it, all in an attempt to have the M+D holders vote a certain way.

From today's Age....

Separately, Queensland Investment Corporation, which owns 9.98per cent of BrisConnections, declared it would not support resolutions to wind up the company and would vote against any such resolutions.

BrisConnections chairman Trevor Rowe is also chairman of QIC, but the company stated that all investment decisions were made independently of the board.

"QIC has a rigorous investment decision-making process to ensure it is independent from undue or improper influences,'' said managing director Doug McTaggart.

Surprise surprise

Who's interests are the QIC following?? This is certainly not in the interests of investment returns, so it must be some other agenda. Is the QIC a super fund of some sort or just an arm of the Govt??

It will be interesting on Tuesday if Bolton gets more than 50% but less than 75%, probably straight back to the courts. Then again, if he gets over 75%, the losers (Macquarie) will probably take it back to the courts.

brty