Anna Bligh's Airport Link project causes problems - BrisConnections loses case ...
Nicholas Bolton's legal team has outfoxed the legal teams of BrisConnections and Anna Bligh's government to resist wind up attempts against his company and proceed with the unitholder meeting.
With Macquarie Bank buying up BrisConnections units, it seems unlikely that Bolton will succeed in passing a resolution to wind up BrisConnections but he has succeeded in giving their legal team and Anna Bligh's legal team bloody noses in the first round of this scrap.
Meanwhile, QIC has managed to turn a $30 million investment into $30,000. No prizes for guessing how QIC will vote at the unitholders meeting given who the BrisConnections chairman is. But the decision will be made independently by QIC because that's what they tell us.
4350water blog would bet the $30,000 that QIC's BrisConnections units are now worth that QIC falls into line with the BrisConnections chairman and votes against Bolton's resolutions ...
See - Courier Mail - Airport Link future in doubt after BrisConnections loses case.
See - Sydney Morning Herald - Rebel Bolton wins BrisCon claim.
posted by Concerned Ratepayer at 12:59 PM
4 Comments:
The Age:
Stonewaller Nick hard to pin down
February 19, 2009
AMID the fury over the failed BrisConnections float of its partly paid unit trusts, an interesting game of Where's Wally? has been played out in Melbourne for the past three months.
Instead of finding the title character of Martin Handford's children's books, a game of Where's Nick? has unfolded since Full Disclosure tracked down 26-year-old Nick Bolton to a grungy flat in St Kilda in November.
Bolton had just become the company's biggest shareholder and, thanks to brokers at Westpac, armed himself with 47 million part-paid BrisConnections units worth 0.1¢ each, and picked up $94 million of associated liabilities.
Bolton choked back tears as he spoke. "I have no comment to make at this stage, but I will talk at a later date," he said, before telling us that he bought the shares in an on-market transaction, and had not spoken with anyone at BrisConnections.
For months, BrisConnections company secretary Tamira Herbst tried to contact Bolton about his shareholding and staggering $94 million debt.
Goldman Sachs JBWere was engaged by BrisConnections to try to find an institutional buyer for his stake.
Emails and letters were sent to Bolton. Phone calls were made. A couple of people even braved the rather downcast looking labrador Bolton had posted at his front door in St Kilda, in an effort to speak with him.
All to no avail — he ducked the calls and the messages.
"If you speak with him again, please tell him to get in touch," said BrisConnections' key PR adviser, Mark Gold, in November. Herbst put in the same request.
Even BrisConnections chairman Trevor Rowe was stunned when Bolton, now the self-proclaimed champion of the BrisConnections underdog, finally took his call last week.
"I did speak with that fellow late on Friday afternoon to endeavour to understand what he was proceeding to do," Rowe said. "I was surprised he took the call, given our past efforts to get through to him."
At last, the face of young Nick, in all his morning-haired glory, has been revealed, and he is starting to look very much like the Corey Worthington of the business world.
Instead of hosting a rowdy house party, Bolton has instead gatecrashed the BrisConnections boardroom by calling an extraordinary general meeting to try to have its trusts wound up.
Even Queensland Premier Anna Bligh has been forced to intervene after Bolton's request for an EGM. Bligh has guaranteed that Brisbane's new toll road will be built, even if BrisConnections goes through some problems or collapses.
Just who is providing Bolton with his legal advice is a mystery, but let's hope it's better than the maths advice he has been getting.
Yesterday, Bolton stated that "around 90 per cent of unit holders are retail investors", a quote trumpeted on the front page of the trade publication he posed for.
That makes for some rather odd arithmetic, given that Queensland Investment Corporation owns 9.98 per cent, and is chaired by Trevor Rowe. The global Capital World group of investment companies owns 7 per cent, and Challenger Financial Services 5.08 per cent.
Not too many retail investors among that lot, which controls 22 per cent of the company. Either BrisConnections, like footballers, is able to "give 110 per cent", or James Packer, as now regarded in some circles, is a retail investor.
According to Herbst, retail investors account for 75 per cent of the company's unit holders the precise amount of votes Bolton needs to wind-up the company's trusts.
Of course, while others have been playing a game of Where's Nick?, Full Disclosure has been a bit more interested in Who's Nick?.
The Melbourne IT company owner, who provides domain name registry services, has been keen to talk about the inclusion of his company Domain Central in the Deloitte Tech Fast 50 awards for the past two years.
Bolton also runs a company called Getmac, which sells Apple computer equipment and iPods online. They can be picked up from the St Kilda flat — just mind the labrador.
But not all of his customers are happy.
"It's not really a shop, it's just a shared building on Fitzroy Street," wrote one Apple customers on the popular Whirlpool forum, in a thread titled Stay away from getmac.
"They're definitely a little weird with how they operate."
A New Zealand technology website was more forthright. "I still have to recommend staying well away from anything associated with Domain Central, Bottle Domains, the Australian Style Group, GetMac.com.au, search.net.au, Nicholas Bolton, or 50 Fitzroy St, St Kilda. Just to be on the safe side, you understand."
3:39 PM, April 02, 2009
Business Spectator
COMMENTARY
2 Apr 2009
BrisConnections needs a bail-out
Nick Bolton’s win in the Victorian Supreme Court means that BrisConnections will be wound up unless Macquarie can muster enough votes to block the wind-up motion.
Macquarie’s purchase of 8 per cent early this week makes it confident but professional litigators IMF are planning to try and prevent Macquarie voting (Will Macquarie get a vote, March 31). All this adds a new twist to the basic conundrum facing BrisConnections.
Earlier today this is how I set out the situation.
On Queensland ABC radio last night I was asked if there was any safe way out of an increasingly dangerous court situation for the infrastructure project that will link Brisbane City to the Airport which is being built by BrisConnections.
My answer was 'yes' – the Queensland government needs to put some money on the table. But the opportunity might not always be there because major forces are joining the legal battle along with those who smell a big profit.
Behind all the legal mumbo jumbo we have a stark situation. If the call on the shares proceeds then mums and dads stand to lose their houses. If the call does not proceed then the projects stops and may not be built for a long time.
What started out as an action involving Nick Bolton and small shareholders has been widened in the Queensland Court action where Deutsche Bank, the co-underwriter of the $390 million, publicly revealed its opposition to the call. We know that most of the overseas banks that have agreed to loan $2.9 billion to the project on the payment of this month’s call will do everything they can to get out of the commitment. The other joint call underwriter Macquarie is doing everything in its power, including initiating the Queensland court action to keep the project together.
Without undermining those actions by Macquarie, history tells us that when you have so many parties lining up against an action, the risks of an explosion are, multiplied. In my first article on this subject I suggested the Queensland government should put some money on the table to keep the deal in place (BrisConnections on a knife edge, March 30). Deutsche is facing a theoretical potential payment of $195 million as its share of the call if no one pays up.
It will not be easy to get people to willingly pay the call because the money looks almost certain to be lost. And there is a further call early in 2010 which might also have limited value. So Deutsche is looking at a $400 million black hole which might be reduced to say $300 million by forced call payments. Macquarie is in a similar situation except that it has loaned large sums in bridging finance which are repaid when the call triggers banks loans.
While substantial dollars have been invested in BrisConnections equity its market worth is minimal because of the decline in the value of the project and the losses on the interest rate swaps. Accordingly the overseas banks look very exposed. If it is proved that the shareholders have the power to stop the call and the Queensland government helps with bail-out then suddenly those units could be very valuable so we are seeing speculators with a history moving in (Banned US stock promoter behind stake in BrisConnections, March 31).
The Queensland government has the deal of a life-time but to secure that deal, in my view, it needs to improve the position of the parties. The government needs to take an equity position to relieve the mums and dads from their call and lower the exposure of the joint underwriters, particularly Deutsche. It might also look to improve the position of the banks. It will still be a great deal for Queensland.
If the Queensland government turn their back and simply rely on the courts then they may win. But the stakes become huge.
5:13 PM, April 02, 2009
Business Spectator
31 March 2009
... Now that the Queensland election is out of the way Premier Anna Bligh needs to look at the whole situation in a pragmatic way. She has in place the deal of lifetime.
BrisConnections can never be duplicated because it was not only based on optimistic traffic assumptions but its gearing was structured in a different era. In addition, if the project had to start again with new tenders, then any tenders under the new Gillard industrial relations legislation will be 10 to 15 per cent more expensive.
Queensland therefore has an enormous amount at stake because well over $4 billion of non-government money will spent in the Sunshine State if Bolton loses.
As a base case, if I was Anna Bligh, I would try to do a deal that saw the Queensland government, Macquarie and Deutsche pick up the tab for the April call with no obligation to small unit-holders. However, that’s the deal they should have done as soon as this problem emerged – it's always high risk to pursue small shareholders in the courts who bought from institutions trying to escape the call.
If (again I emphasise, it's a big 'if') Bolton proves that BrisConnections shareholders have the right to wind up the company and stop the project then the Queensland government may have to pay shareholders off with large sums as well as do a deal with Macquarie and Deutsche. And at the same time they must not allow the lending banks any wriggle room.
There is so much at stake that this case reeks of settlement possibilities. But then, you can never be sure which way a judge will decide.
5:14 PM, April 02, 2009
Brisbane Times:
BrisConn rebel in secret meeting with chairman
April 3, 2009
REBEL BrisConnections shareholder Nicholas Bolton flew to Sydney yesterday for a secret meeting with the company's chairman, Trevor Rowe.
When Mr Bolton was contacted by BusinessDay he confirmed he was in Sydney for "high-level meetings" related to BrisConnections, but would not confirm or deny if he had met Mr Rowe.
BusinessDay has been told the two protagonists in the long-running battle had a private meeting following Mr Bolton's stunning court victory over BrisConnections this week.
While the pair met, Melbourne's Supreme Court ordered that BrisConnections provide unit holders with limited access to the toll-road company's financial records before an extraordinary general meeting in Brisbane on April 14.
The corporate regulator lobbied for shareholders to be provided with information about the financial status of the embattled company, which has begun construction of Brisbane's $4.8 billion Airport Link project — the biggest infrastructure project under way in the country.
Any corporate information sent to unit holders must be cleared by the Australian Securities and Investments Commission and should be couriered to individuals next week.
The Easter holiday allows only four working days for unit holders to consider the information and return a proxy form.
Legal counsel for Nicholas Bolton struggled to contact their client all day for instruction, and the courtroom buzzed with rumours that Mr Bolton and Mr Rowe were meeting in the Sydney suburb of Balmoral, where Mr Rowe lives.
Justice Ross Robson has ordered that two planned meetings be held concurrently on April 14 in a Brisbane hotel.
The Supreme Court of Victoria asked BrisConnections to change the shareholder meeting venue after lawyers for Mr Bolton's company, Australian Style Investments, told Justice Robson the proposed location — BrisConnections' headquarters in suburban Brisbane — was a "construction site".
Holding the meeting at a hotel would be "far better then having shareholders wandering down the Gympie Highway to get to a construction site", Justice Robson said.
Shareholders will vote on April 14 to wind up the BrisConnections trust and on resolutions to reinstate unit distributions, postpone the second instalment due date and remove the company's board.
A spokesman for the toll-road builder said holding the meeting at the company headquarters and across the road from construction sites was intended to "demonstrate to shareholders there is a real project under way employing 1300 people".
The meeting will now be held at 10am on April 14 at the Brisbane Convention and Exhibition Centre, the spokesman said.
Justice Robson yesterday reiterated his concerns that BrisConnections executives had access to secret financial information.
"Anything the (BrisConnections) trust has got belongs to the unit holders," he said.
"At the end of the day, the unit holders are the (company) owners."
A spokesman confirmed last night BrisConnections would mail information packs to shareholders next week after they are approved by ASIC.
He confirmed the packs would include details of a Deloitte report that said unit holders would still be liable for $1.13 worth of instalments if the trust were wound up.
1:43 PM, April 04, 2009
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