Bell Tolls For Brisconnections

Sydney Morning Herald

Thursday November 27, 2008

Scott Rochfort

BRISCONNECTIONS has played down speculation that its underwriters, Macquarie Capital Advisers and Deutsche Bank, could eventually seek to delist or buyout the hapless toll-road group, amid signs that the company's plans to raise a further $817 million from its security holders have gone off the rails.

The emergence of a second retail investor with a substantial stake in Brisconnections has fuelled expectations that Macquarie and Deutsche could end up having to fund the bulk of Brisconnections' next two instalments in April and early 2010.

On Tuesday night, the Melbourne internet domain name company Australian Style Investments, run by Nicholas Bolton, disclosed that it had taken a 12.2 per cent stake in Brisconnections for $47,643, or 0.1 cent per security. This makes Mr Bolton's company the group's largest shareholder.

Mr Bolton failed to return the Herald's calls yesterday to explain whether he understood his company was obliged to stump up an extra $95 million or $2 per security, for the next two instalments in the company.

"We would hope he would have done his homework and sought some independent advice prior to his investment," a Brisconnections spokesman said.

Mr Bolton's emergence as a substantial shareholder comes a fortnight after a Melbourne woman, Fang He, picked up a 8.26 per cent stake in the group, obliging her to cough up $65 million on top of her initial $32,000 outlay.

When it was floated in July, 88 per cent of Brisconnections was held by institutional shareholders. It is now believed that figure is hovering around 25 per cent, with the catastrophic fall in the company's first instalment from $1 to 0.1 cent allowing retail investors to buy large stakes in the company relatively cheaply.

If retail shareholders fail to stump up the cash for the next two instalments, Macquarie and Deutsche could end up owning about 70 per cent of the group.

It is speculated that, in order to avoid further embarrassment, Macquarie could seek to buy out and delist the toll-road group in partnership with the remaining institutional shareholders, the largest being the Queensland Investment Corporation.

Brisconnections, however, said "there were no plans afoot" to avoid the listing of its second instalment in April, which could involve debt collectors reminding retail investors of their obligations.

"Any talk on that is just pure speculation at this stage," a spokesman said.

Despite the huge embarrassment generated from the Brisconnections listing, one consolation for its advisers is the $86 million in underwriting fees.

© 2008 Sydney Morning Herald

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