BCS - BrisConnections Unit Trusts

[cuttlefish]

Re: Brisconnections shareholders - financial ruin

I ask myself why can't the company just run a public auction/book build process for forfeited stock - just like the old NL companies I spoke about a few posts above used to do on their no obligation contributing (CA) shares - that would probably get the best return for BCS with the least headache.

But the big difference here is that the BCSCA issue is underwritten - so Macquarie is obliged to meet the full shortfall, and will also acquire as a result the defaulted instalments (which will now be fully paids due to Macquarie meeting the shortfall).

The ironic thing is that the main seller in the market, offloading some 60
million shares over the past few months, if I've done my figures correctly, was the underwriter, Macquarie. And Macquarie are allowed under the PDS to take legal action on BCS behalf against holders that forfeit if I've read it correctly.

(ironic is a polite way of expressing what went on here imo).

 

[rocket12]

Re: Brisconnections shareholders - financial ruin

Someone just bought 100,000 of them... for 100 bucks they now have a 2 hundred thousand liablity...

 

[cuttlefish]

Re: Brisconnections shareholders - financial ruin

Why hasn't this stock been suspended after all of this while they sort something out to make an orderly market?!? Clearly at the moment it is NOT an orderly market.

I don't understand why this situation is allowed to continue, but on the other hand if you try to buy a low liquidity stock on market when the offer side of the spread is greater than 10% above the last sale price you are prevented from doing so because it moves the price too much.

 

[Justthinkin]

Re: Brisconnections shareholders - financial ruin

I'm not quite up to date with this debacle but the gist I think is for cents I can buy a mountain of shares but also a complimentary liability. I understand everybody who has subscribed has done their butts!. So far so good??

It seems to me then someone is going to financially suffer...If I was a large holder I'd rather the company and its lenders to hurt rather than me personally. Therefore why wouldn't you just muster up a lot of shareholders who have everything to lose and nothing (as in zero) to gain and conduct an EGM and change the constitution or whatever other instrument needs changing so that the liabilitity is waived?

Everybody gets to be the proud owner of a piece of rubbish.

This would I (if plausible and successful) give rise to some really interesting discsussions about placement fees and underwriting fees if presumably the company was placed into receivership or liquidation. MacBanks creativity would surely be on stage...

I am not a lawyer and this is simply the rantings of someone who does not have a mountain of these shares or gives a damm about the liability.

 

[cuttlefish]

Re: Brisconnections shareholders - financial ruin

I'm not quite up to date with this debacle but the gist I think is for cents I can buy a mountain of shares but also a complimentary liability. I understand everybody who has subscribed has done their butts!. So far so good??

It seems to me then someone is going to financially suffer...If I was a large holder I'd rather the company and its lenders to hurt rather than me personally. Therefore why wouldn't you just muster up a lot of shareholders who have everything to lose and nothing (as in zero) to gain and conduct an EGM and change the constitution or whatever other instrument needs changing so that the liabilitity is waived?

Everybody gets to be the proud owner of a piece of rubbish.

This would I (if plausible and successful) give rise to some really interesting discsussions about placement fees and underwriting fees if presumably the company was placed into receivership or liquidation. MacBanks creativity would surely be on stage...

I am not a lawyer and this is simply the rantings of someone who does not have a mountain of these shares or gives a damm about the liability.

Thats a very interesting suggestion. In fact its quite possible some of the institutional holders aren't that keen on paying the subsequent installments any more either, and would also come to the party alongside the smaller shareholders. After all - its the shareholders company, not the directors.

I mean I doubt Macquarie is interested fulfilling the underwriting agreement either if they can avoid it - sounds like everyone would be happy to walk away from the whole thing right now - so they probably woudn't complain either if a majority of shareholders decided to can the whole thing. (All opinion and I'm only speculating of course).

 

[Sunder]

Re: Brisconnections shareholders - financial ruin

I ask myself why can't the company just run a public auction/book build process for forfeited stock - just like the old NL companies I spoke about a few posts above used to do on their no obligation contributing (CA) shares - that would probably get the best return for BCS with the least headache.

With the share price effectively zero, isn't this the same as issuing more stock, but with only $2 owing?

I think the reason why, is because after the 2nd installment is paid, the shares will be worth less than $1.001c, which is effectively the market writing off the entire project.

Easier to go underwriter option, than raise more funds option - and the underwriter isnt' going to let the debt go that easily. What was the average Australian net worth? Just under 300k right? So if a share holder owed $500k, even though you can't take the work tools, and can only caveat the family home, there's still a good chance of a decent recovery rate for these debts.

 

[Sunder]

Re: Brisconnections shareholders - financial ruin

Thats a very interesting suggestion. In fact its quite possible some of the institutional holders aren't that keen on paying the subsequent installments any more either,

That is an interesting suggestion. As long as Brisconnection also waived their right to build the road, then the only people who have lost - are those who have already lost their money (i.e. sold their IPO shares on the way down).

Tax payers will still get a road funded by some other company, Macquarie is no longer obligated to underwrite the project, so their shareholders are safe, and well, money lost already gone anyway.

What happens to the funds still in the company? If I understand it, they're still holding about half the cash raised.

Edit: Just another mischevious thought - what if you could just buy enough shares at 0.1 cent, to get the company to pay you the rest of the remaining cash, and then shut down the company? As a shareholder, and not even a director, you would have not signed any director's gaurantees for anything.

 

[cuttlefish]

Re: Brisconnections shareholders - financial ruin

Edit: Just another mischevious thought - what if you could just buy enough shares at 0.1 cent, to get the company to pay you the rest of the remaining cash, and then shut down the company? As a shareholder, and not even a director, you would have not signed any director's gaurantees for anything.

haha - there's an interesting thought - far fetched as you imply, given they'd have likely already entered enough contractually binding commercial obligations with suppliers to cover the bulk of the funds they hold, if not more.

Also of course the legality of varying/waivering the instalment payments would have to be assessed - particularly if it effectively made the company insolvent by removing their primary future income source.

There's about 390 million units on issue.

I wonder if the units even have any voting rights attached to them anyway - as they are not ordinary shares they may not.

 

[thermalmonster]

Re: Brisconnections shareholders - financial ruin

Anyone Know a recent bankrupt who is willing to by all our shares?
If one single person bought or got transfered the shares for $1
He/She could become a BCSCA Marta kind of save us all.
What if we all got together and formed a charity?
There must be some decent loop hole for crikey sake!

 

[Prospector]

Re: Brisconnections shareholders - financial ruin

However it may as well be $10,0000 because I dont have that kind of cash.
I have never invested in shares before. Its only because I work for Thiess who are involved in the project I thought I would chuck $500 at it.

I wonder how many people have bought these and still dont know about their liability. Did anyone at Thiess promote that you should buy these?

 

[numbercruncher]

Re: Brisconnections shareholders - financial ruin

You need a good samaritan to go start a limited liability company and snap them all up ..... or even someone prepared to thrash a smsf ?

This whole debacle will surely spark a change in the rules ?

 

[James Austin]

Re: Brisconnections shareholders - financial ruin

rocket,

you may have already answered this,

but what was your thinking when u purchased at .001c and saw no buyers in the market depth?

i assume you viewed the depth prior to purchase as implied by your post 27. on pg2.

thanks
James

 

[rocket12]

Re: Brisconnections shareholders - financial ruin

rocket,

you may have already answered this,

but what was your thinking when u purchased at .001c and saw no buyers in the market depth?

i assume you viewed the depth prior to purchase as implied by your post 27. on pg2.

thanks
James

I bought them in early november when there were still plenty of buyers at 1c. I jumped in the queue and waited a few days to get them...I knew they werent bhp but was perfectly fine having a gamble with a couple of K and had no probs if I lost the money.

 

[drsmith]

Re: Brisconnections shareholders - financial ruin

I bought them in early november when there were still plenty of buyers at 1c. I jumped in the queue and waited a few days to get them...I knew they werent bhp but was perfectly fine having a gamble with a couple of K and had no probs if I lost the money.

If you have not done so all ready plonk them in the sell queue at 0.1c.

While there''s a lot there and you would enter at the back of the list, you never know your luck. If enough fools (or a big one) comes to the party, use the proceeds to purchase a lotto ticket. You might just win lotto twice in one year.

 

[Enzyme]

Re: Brisconnections shareholders - financial ruin

I've been looking at the PDS, and wonder if I might have found an angle for the lawyers to pursue:

The BrisConnections PDS does not adequatly inform investors about the potential risks in investing in the company. As Briscon have misinformed investors through the PDS, they can't then use the provisions described in that PDS to take debt recovery action against shareholders.

Now the PDS does talk about risk. There are five pages of it listing bad things that could happen that would adversely affect the share price. But the PDS always assumes that there is a share price. That is where it fails. Events have shown that the is no share price for Brisconnections shares. Most shareholders would gladly give their shares away, or pay to get rid of them. Brisconnections represents a failure of the market for investors, and the PDS did not warn of this possible risk.

Does anyone think that this line of argument has a future?

 

[cuttlefish]

Re: Brisconnections shareholders - financial ruin

I've been looking at the PDS, and wonder if I might have found an angle for the lawyers to pursue:

The BrisConnections PDS does not adequatly inform investors about the potential risks in investing in the company. As Briscon have misinformed investors through the PDS, they can't then use the provisions described in that PDS to take debt recovery action against shareholders.

Now the PDS does talk about risk. There are five pages of it listing bad things that could happen that would adversely affect the share price. But the PDS always assumes that there is a share price. That is where it fails. Events have shown that the is no share price for Brisconnections shares. Most shareholders would gladly give their shares away, or pay to get rid of them. Brisconnections represents a failure of the market for investors, and the PDS did not warn of this possible risk.

Does anyone think that this line of argument has a future?

Sounds reasonable to me - but I'm no lawyer .

I also noticed on the ASX site when it talks about the risks of investing in shares it never talks about this one either. Its kind of a significant one you'd think.

In fact - this is the pithy three liner that the ASX provides for investors under the risks part of their 'what are shares' page - quite pathetic really (see below). Ultimately it is the ASX that provides the mechanism whereby these highly risky instruments can be exchanged.

Although the sharemarket historically has outperformed other investments over the long term, the market can experience volatility in the short term. Individual stock prices can go down as well as up. It is important to monitor your shares' performance, and to regularly re-evaluate whether they continue to be a good investment for you. You can learn how to do this by completing an online class or by talking to a broker.

 

[Enzyme]

Re: Brisconnections shareholders - financial ruin

I wonder if the units even have any voting rights attached to them anyway - as they are not ordinary shares they may not.

I just checked. They do have voting rights.

If brisconnections were coming after me and my life's savings I'd seriously consider launching a pre-emptive strike against them and their underwriters. For somewhere between $100k and $300k you could take over the company and wind it up. If you were lucky you might just manage to avoid bankruptcy. If not then at least you could have the satisfaction of causing maximum damage to the company and the underwriters that bankrupted you.

 

[drsmith]

Re: Brisconnections shareholders - financial ruin

Does anyone think that this line of argument has a future?

If the lack of a market for the shares is listed as a risk then no.

Further to my comment above, everyone holding this should consider placing a sell order for 0.1c. It's a long shot but if Macquarie can see an opportunity to mop most of them up for a token amount you never know. It might be the easiest way out for them too.

 

[mazzatelli1000]

Re: Brisconnections shareholders - financial ruin

Someone just bought 100,000 of them... for 100 bucks they now have a 2 hundred thousand liablity...

WTF is this???

One would think with this debacle --- they would put up a clearer warnings

Surely these guys (Bris and Macq) aren't relying on taking assets from these unsuspecting punters to raise some money

Tough situation

 

[cuttlefish]

Re: Brisconnections shareholders - financial ruin

In fact - this is the pithy three liner that the ASX provides for investors under the risks part of their 'what are shares' page - quite pathetic really (see below). Ultimately it is the ASX that provides the mechanism whereby these highly risky instruments can be exchanged.

Though to add to that, when I went through the online beginners to shares course that was linked to in that risk section, it does cover the types of shares and in particular mentions contributing shares with these comments:

Contributing shares

* partly paid
* require certain future payments at certain future dates
* shareholders are obliged to pay outstanding capital when due, unless the company is a no liability company in which case shares can be forfeited instead