A public company that allows its stock price to drop to A$0.001 per share is not normally considered successful, but the management of the BrisConnections toll road company are being rewarded as if its shares had never traded at bargain-basement prices. In fact, investors reading the Annual Report released yesterday would have no reason to suspect the company had ever been on the brink of collapse. “I am pleased to report that the Group has successfully tackled a number of early challenges, including establishing our organization, holding two member requisitioned meetings, forging solid relationships with project stakeholders, and working with our project partners to ensure a positive start to construction of the Airport Link Project,” BrisConnections Chairman Trevor C. Rowe wrote in the report’s introduction.
“BrisConnections is fully funded and we are well positioned to continue delivering on the construction phase of the project. We have syndicated debt facilities in place to 2018, which we began drawing on in November 2008.”
The enthusiastic prose set the stage for the enthusiastic compensation packages bestowed upon the company’s top executives for the fiscal year ending June 30. The bonus figure below includes the value of stock options awarded, retirement contributions and other monetary incentives.
| Executive | Salary | Bonus | Total |
| Ray Wilson | $398,713 | $271,009 | $669,722 |
| Nicholas Lattimore | $263,626 | $193,101 | $456,727 |
| Charles MacDonald | $240,826 | $116,674 | $357,500 |
| Trevor Rowe | $104,478 | $204,267 | $308,745 |
| TD Herbst | $187,250 | $93,613 | $280,863 |
| Robert Porter | $115,896 | $44,271 | $160,16 |
BrisConnections was created to develop the A$4.8 billion Airport Link toll road in Brisbane, Australia using highly leveraged shareholder debt. By their nature, the financial health of toll roads can swing wildly based on minor changes in the number of people using the road or in the interest rate used to finance the billions in debt used for construction.
“If Traffic assumptions over the entire concession period differed by +/- 5 percent then the value in use would be impacted by +/- $100 million,” the annual report explained. “The value in use is also sensitive to changes in the discount rate. For example, 50 basis point change in discount rate will impact the value in use by +/- $200 million.”
After the credit crisis hit both interest rates and traffic levels worldwide, BrisConnections stock plunged. Worse, the company created an unusual “stapled security” arrangement where each share came with a debt of $2 to be paid in $1 installments. Many small investors and housewives unaware of this obligation were horrified to learn that each $100 they invested in the bargain stock had become a $200,000 debt. An attempt by shareholders to wind up BrisConnections failed when a $4.5 million greenmail payment was made to the largest rogue investor. The stock no longer trades on the Australian Securities Exchange.
[courtesy thenewspaper.com]
Why does it seem as though a lot of these traffic camera companies are in Australia? I think being offshore to the US distances them from lawsuits…
@ eggsalad
We’re God-less down here. We worship beer, sand and the bikini, oh, and other people’s money from overseas traffic cameras.
Day one should start with cleaning out the offices of these people.
Day two will see the government taking responsibility for the road to insure it remains open for travel. An infrastructure like this must remain accessible and unfortunately the government is the last resort. But hey, that’s what taxes are for.
Day three would be the start of bankruptcy procedures to distribute any thing that is left to investors.
Life goes on
Pace the first two comments, tt’s not a traffic camera company. It’s a toll company. A toll road company with a single project, in Brisbane. A road that hasn’t been built yet, so there’s no “insuring that it remains open for travel.” A road whose project involves an ambitious tunneling project underground, to avoid having to go around. A project that includes, in addition to the toll road, bus rapid transit lanes to connect to other busways.
Of course, the idea was disastrously conceived and executed by a consortium that apparently had no idea what they were doing and resorted to essentially small investor fraud by the end. But the first three comments to this thread are entirely non sequiturs.
American style finance and ‘capitalism’ has infected all the world, it would appear.
http://www.nytimes.com/2009/10/05/business/economy/05simmons.html?_r=1&hp
That above, by the way, is how ‘we do’ American style capitalism these days, boyzzz.