So that nice young Nicholas Bolton, champion of the benighted BrisConnections mums and dads, turned out to be a cad and a bounder — a bolter, in fact.
Last Wednesday he sold his votes (but not his shares) to a no doubt bitterly grumpy Wal King of Leighton Holdings for $4.5 million and on Saturday lodged his proxies against all of his own resolutions for yesterday’s general meeting. Thus when the meeting began, everyone knew it was a non-event except the 50 souls who turned up to vote for their saviour Mr Bolton.
It didn’t matter anyway. They would almost certainly have still been on the hook for $1 a share in a fortnight if the trust had been wound up and/or BrisConnections Management Co had been removed as the responsible entity (RE), although there was a sliver of doubt about that, which is what brought 50 of these disaster victims out on a wet and humid Brisbane day.
And of course Nicholas Bolton has not bolted — he is still up for $77 million on April 28th, and although he has apparently squirrelled the $4.5 million away in a separate entity his bankruptcy trustee will no doubt go after that money when the time comes.
That is, if there isn’t a resolution of this mess between now and then — which there must be.
The underwriters, Macquarie Group and Deutsche Bank, and probably together with the contractor, Leighton subsidiary Thiess John Holland, and the Queensland Government, know that they will have to offer to let unitholders walk away from their units and their liabilities.
Macquarie has accepted this; Deutsche is trying to squeeze Premier Anna Bligh for $300 million before agreeing, which is worth a try perhaps. Leighton’s Wal King probably reckons he has done his bit by buying off the Bolton nuisance.
There are two instalments of $390 million still due to help fund Brisbane’s airport tollway. The next is due on April 28th and the final instalment a year later.
BrisConnections expects a 60-65% default rate on these (a third of them are thought to be in for the long haul and prepared to pay), which means the underwriters are up for a total of about $500 million.
Get Crikey FREE to your inbox every weekday morning with the Crikey Worm.
They could probably come close to getting that back by bankrupting all of the non-paying unitholders and seizing their assets, but nobody thinks that would be a very good idea. It would certainly be very unhelpful politically, which is why, presumably, Deutsche thinks the Government might be good for some of it.
The reality is that Macquarie, Deutsche, the State Government and Leighton are going to end up as large BrisConnections unitholders, and they are going to get their units for $2 each rather than the $3 in instalments at which they were issued. They are just arguing over who pays what.
One thing that won’t happen is the end of the project. Yesterday, as the BrisConnections unitholders arrived at the Convention Centre in their futile attempt to wriggle out, the company’s 1300 staff were already at work and the tunnelling had resumed after the Easter break.