Rob Coyte's Blog

Yesterday the shareholders and Preference Shareholders of BBI voted in favour to the recapitalisation plan involving Brookfield Asset Management which is basically stealing some of the prize infrastructure assets in this country, including the Dalrymple Bay Coal Terminal.

At a heated AGM a shareholder called it “one of the greatest corporate disasters in Australia” and there would be not many counter arguments to this. The assets were prime quality and “safe” assets, the mismanagement of which saw debt levels climb to unsustainable levels once the economy turned and debt markets froze up. This meant that the company was unable to ride out the financial crisis and instead was forced into a position where they were at the mercy of their bankers and ultimately a self serving board and management.

The deal means that shareholders are effectively given 4 cents per ordinary share, a level some 98% below the investment value 2 years ago.

Unfortunately, it is another case where the poor shareholder is left out to dry while management and other parties concerned in causing the huge disaster walk away unscathed and intact.

Rob Coyte | Tuesday, November 17, 2009
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