BrisConnect: Getting Rid Of The Mess?

  Judging by yesterday's announcement to the ASX, desperate measures are being adopted to make the embarrassing BrisConnections debacle goes away: Macquarie Group or someone might outlay money to make it vanish via a quick and easy takeover.The possibility of a corporate deal was raised yesterday in this statement to the ASX.Hopefully more information will be emerge today before trading starts.BrisConnections asked for its securities to be suspended from trading yesterday (a misnomer as no one is buying or selling - the stock is dead) ahead of a potential approach to unit holders.The news came with court hearings in Melbourne and Brisbane regarding information and other procedures for meetings due to be held in Brisbane in the next week that could see the company wound up.A further court hearing will be held in & #160;brisbane today involving Macquarie, the company and others.BrisConnections was yesterday told not to approach unithholders ahead of the meeting. the company was the subject of damning criticism in a Melbourne court yesterday.BrisConnections said in the statement that it had received & quot;material information & quot; from one of its underwriters regarding a possible approach.Macquarie and Deutsche Bank are its underwriters and are on the hook for & #36;390 million each to cover the & #36;2 of calls left on the units, which are trading at a 10th of a cent. They are unwanted because of the outstanding liability of & #36;2 a unit.BrisConnections is a venture between Leighton Holdings and Macquarie, which is building the country's biggest infrastructure project: the 4.8 billion of roads in Brisbane to improve traffic flow from the city to the airport and beyond.The shares were sold as stapled securities in July, with A & #36;1 paid on application and two further obligatory instalments of A & #36;1 each payable in nine months and 18 months, it said at the time of its sale last year.A number of court cases have arisen related to BrisConnections, with some unit holders claiming they were unaware of future obligations when they purchased the shares on the stock exchange.Nicholas Bolton, a 27-year-old Melbourne entrepreneur who is its biggest single holder, is seeking to wind up the trust, arguing unit holders have been misled and that the company's management hasn't acted in the best interest of shareholders. He was successful in a court hearing last week that sought to block his motions to the meetings.Last week, Macquarie revealed it had acquired 31.4 million stapled units, or an 8.06% stake, in BrisConnections and has paid a further & #36;92.5 million to BrisConnections under the bridging finance facility agreed to with the company.On the same day, Macquarie said it had taken steps to initiate legal proceedings in the Supreme Court of Queensland to seek to ensure relevant parties meet their contractual obligations.Currently the company has a valuation of & #36;39 million. Macquarie or someone could buy the company at that price and then do a deal to refinance the outstanding & #36;780 million in the two payments.In an interesting development, the federal government has approved moves by the corporate regulator, ASIC, to lift disclosure levels for partly paid shares.Without mentioning BrisConnections, the Federal Minister for Corporate Law, Senator Nick Sherry yesterday said in a statement: & quot;Senator Nick Sherry, Minister for Superannuation and Corporate Law, has today allowed changes to the Australian Securities Exchange (ASX) market rules to boost retail investor disclosure and protection in relation to & quot;partly paid securities & quot;. & quot;Partly paid securities, or installment receipts, are securities that require that on a future date or dates to be specified by the issuer, that the holder may have a legal obligation to pay the balance of the previously uncalled issue price. & quot;The ASX, the market supervisor, and the Australian Securities and Investment Commission (ASIC), the market regulator, put forward a market rule change to insert a new definition of a partly paid security and impose a new requirement for market participants and retail investors to enter into a Partly Paid Security Client Agreement before the retail client buys partly paid securities for the first time. & quot;The Government shares the concerns of ASIC and the ASX that retail investors have not fully understood their potential obligations with regard to partly paid securities. & quot; & quot;A falling share market this year has meant that some securities that looked like a bargain actually had huge liabilities attached to them that were not understood by retail investors who purchased them. & quot; & quot;Today's announced rule changes will greatly assist in ensuring retail investors more fully appreciate the implications of this type of security, and that aligns with the Government's overall focus on market integrity, & quot; said Minister Sherry. & quot;These changes to the ASX market rules were lodged with the Government on Friday, April 3. Under the Corporations Act 2001, the Minister has 28 days to choose whether the rule changes should be disallowed. The Minister has chosen not to disallow these rule changes. & quot;And the ASX yesterday issued this circular to members regarding & #160;the second installment of & #36;1 per unit.On 2 March 2009, ASX issued Circular No: 55/09, which detailed information relevant to the second installment of & #36;1.00 in respect of stapled units in the BrisConnections Unit Trusts which is payable on 29 April 2009.The timetable contained in that Circular has now been changed to remove the deferred settlement market for the 'second call paid' stapled units. The Trusts' stapled units will be suspended from quotation during the period 16 April 2009 to 6 May 2009 inclusive.BackgroundThe Trusts have announced that the second installment of & #36;1.00 in respect of stapled units in the Trusts (issued at & #36;3.00 per stapled unit, partly paid to & #36;1.00 each on application, with a second installment of & #36;1.00 per stapled unit payable 9 months following the allotment date of 29 July 2008, and a final installment of & #36;1.00 per stapled unit payable 18 months after the allotment date), trading under the ASX Code: BCSCA, is payable on 29 April 2009.The obligation to make this payment will fall on parties that are the registered holders of BCSCA stapled units on 29 April 2009.The register of holders of BCSCA stapled units will not alter after 7.00 pm on 22 April 2009. The third and final installment of & #36;1.00 per stapled unit is payable on 29 January 2010.The Trusts have also announced an intention to declare a semi-annual distribution of 0.05 cents per stapled unit for the period ended 31 December 2008 with the Trusts announcing that the declaration and payment of the distribution being expected to occur following the second installment and that consequently, unit holders will need to pay the second installment on their partly paid units prior to being eligible to receive this distribution.A new trading code will be established for stapled units upon which the second & #36;1.00 installment (i.e. being the installment the subject of this Circular) has been paid.The new code, BCSCB, will represent units paid to a total of & #36;2.00, with the final installment of & #36;1.00 still unpaid.Accordingly, references to 'second call paid' stapled units relate to stapled units where the 'Second Installment' (as referred to in the PDS for the stapled units) has been paid, with the first installment (referred to as the & quot;Initial Installment & quot; in the PDS for the stapled units) having been paid on application. & #160;  

Add Your Business

List your business

for more exposure
and more traffic!


Sydney

  [ Change ]
 
Today

Min: 11°
Max: 19°
Possible shower.
Tomorrow

Min: 12°
Max: 19°
Possible shower.
 

Account

Login

To access your account and listings



Remember me
   
   
   
 
 
Find Hunter Valley accommodation online