This road is a boulevard of broken dreams

We’re sorry, this feature is currently unavailable. We’re working to restore it. Please try again later.

Advertisement

This was published 14 years ago

This road is a boulevard of broken dreams

By Mark Hawthorne

AS BRISCONNECTIONS approaches its second Christmas, the same question hangs over the toll-road builder's share price - just what is one of the company's units actually worth?

BrisConnections is again trading at 0.1¢ per unit, the lowest possible price on the Australian Securities Exchange, and it has a further $1 per unit instalment due next month.

That means, when the share is fully paid at the end of January, it will be worth somewhere between $1.001 per share and, well, nada.

The situation isn't quite as dire as last year, when there were two further $1 instalments to pay, but it still makes BrisConnections the most toxic asset on the ASX.

Last Christmas, purchasing the minimum $500 of units brought with it $1 million of debt, and a very painful lesson in leverage. Now $500 will buy 500,000 units - and a post-holiday season bill of $500,000.

This time around there is no Nicholas Bolton hovering around buying up units. Indeed, the only buyer, it seems, is Ray Wilson, the intrepid chief executive of BrisConnections, who has picked up a further 5000 units in an on-market transaction at 0.2¢ per unit.

The boss, who has been on a whirlwind nine-day international roadshow visiting the financiers of BrisConnections' Airport Link project, at least is standing by his company. Even if it is to the tune of $10 worth of shares.

Of course, thanks to the media exposure generated the last time BrisConnections hit the 0.1¢ mark, it's much harder for retail investors to get into the same financial strife this time around.

CommSec is demanding that buyers sign a declaration stating they are aware of further instalment payments before they will let clients buy into the stock. On the E*Trade website, it's impossible to even find BrisConnections to buy shares.

Back in April both the ASX and the Australian Securities and Investments Commission issued a joint missive, declaring a new rule for partly paid securities. The ASX would ''introduce a market rule to require brokers to alert retail clients of the need to inform themselves of the rights and obligations associated with trading partly paid securities''.

Advertisement

Many firms saw that as the ASX shifting responsibility to brokers.

Of course, a visit to to the BrisConnections page on the ASX website brings absolutely no warnings at all about the consequences of buying BrisConnections units. Not even a warning that the unit has further payments due on it.

Must be a case of do as we say, not as we do.

It's chicken feed to some

THERE are some big donations coming from the city's top-tier law firms. ALB Legal News, an online legal newsletter, is running a ''Christmas initiative'' and donating animals to impoverished communities.

All the lawyers have to do to help is fill out an online form. If four forms are completed by one firm, one chicken and its feed will be bought for an impoverished community. If the firm gets to 100 forms from staff, then a community gets a donkey to be used in agricultural activities.

''All lawyers have to do is spend one minute filling out their details and $2.25 is donated by ALB to World Vision to buy donkeys and chickens for people struggling in the poorest parts of the world,'' states the message to lawyers.

So, how is the charity initiative going?

So far Minter Ellison is the only firm to contribute a donkey, having raised $339.75 in total.

Coming second is the firm's New Zealand counterpart, Minter Ellison Rudd Watts, which has raised $166.50. Third is Mallesons Stephen Jaques, with $128.25, while the rather well-paid briefs at Corrs Chambers Westgarth have raised a paltry $76.50.

The list suggests some rather large firms about town are lagging even further behind.

Of course, as one Collins & Spencer operative pointed out, $2.25 a minute works out at $135 an hour. ''Given the pricing schedules of most firms, that's barely enough to get a letter drafted by a low-ranking associate,'' he noted.

Maybe a few of those well-paid legal types might consider dipping into their own pockets this season.

ASIC bans

IT'S an unhappy end to the year for a couple of company directors who have received lengthy bans from the corporate plod.

Mehdi Mashayekh of Doncaster East has been disqualified from being a company director for five years after an ASIC investigation into his role in five failed companies, Cafe dell Mar, The Establishment Lounge, Mambo Restaurant, Global Oz Corporation and NBA Constructions.

ASIC's investigation found that Mashayekh, ''failed to properly explain and account for funds advanced by financiers to Cafe dell Mar and The Establishment Lounge, including payments to himself and related entities''.

Joy Lorraine Thompson, of Croydon, has been banned for two years for her involvement in three failed companies, Purple Onion Products, Profile Holdings and Pride Events. The ban relates to the sale of assets.

Most Viewed in Business

Loading