We have been asked 2 questions:
>>[1] Can you please explain to us the charity's rationale for taking all these BrisCon units off the hands of other investors, and now fighting the fight against BrisCon?
ATO asked us the same question and we answered to their satisfaction -- such that we maintain our Deductible Gift Recepient (DGR) status.
As we said to the ATO: The reasons for acquiring BrisConnections Stapled Units by The Julie Anne Barrow Charitable Trust have been stated publicly and consistently on numerous occasions...
Reasons include:
Long-term view of Brisbane Airport Link is positive, based in part on investment information provided by responsible persons of the BrisConnections Management Company Limited.
Views on the complex dynamics in play before the 29 April 2009 second instalment, where the $1 call could have been potentially met by a market re-evaluation of unit fundamentals (driven by the unique, scarce, highly valuable asset: the long-term 45 year toll road concession).
A surplus could have been realised at the Public Auction of the units, held on 5 June 2009.
The Brisbane Airport Link project was well placed for a Privatisation and re-issue to market.
Market Signals of BrisConnections Value:
(i) On 30 March 2009 Macquarie Group Limited purchased 1,429,332 (8.055%) BCSCA units on-market.
(ii) On 15 April 2009 it was announced on the ASX that Leighton Holdings had paid $4.5m for the 77,400,933 (19.84%) voting rights (only) of Australian Style Investments.
(iii) On 21 April 2009 Macquarie Group Limited offered BCSCA unitholders with up to 50,000 of holdings an opportunity to exit the register by 5pm 4 May 2009 without meeting $2 liabilities.
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>>[2]...Can you please explain to us the charity's rationale for... now fighting the fight against BrisCon?
There are many reasons some of which we cannot as yet reveal for legal strategy, but as per the public records for VIC Federal Court case VID486/2009 we remonstrated against the blunt instrument of Statutory Demand $5.6m said to be owing to BrisCon by drawing attention to the following points:
(A) The BrisCon Trust Constitutions
...state in article 4.9(e) that the Manager "may" set a reserve price at auction as then set out in sub-articles 4.9(e)(a) and 4.9(e)(b)
...when article 5.7(b) of the Underwriting Agreement states that the Manager "will" set a reserve price at auction as then set out in sub-articles 5.7(b)(i) and 5.7(b)(ii).
(B) The BrisCon Trust Constitutions also
...state in sub-article 4.9(e)(a) that the reserve price at auction will be at a price "not exceeding" the amount then set out
...when sub-article 5.7(b)(i) of the Underwriting Agreement states the reserve price at auction will be "equal to" the amount then set out.
Note: "may" is not "will"
...and "not exceeding" is not "equal to" -- even though the destination may end up being the same, the possible journeys are many and varied when you are a prospective BCSCA investor looking forward, and relying on the Investment Constitutions in good faith, as to how a Public Auction ought to be reasonably run.
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More info on the BrisCon Fightback cases are updating on:
http://www.settlemate.net.au/BrisCon/tabid/57/Default.aspx
Regards,
David