How will Mrs He find the $65m?
* Scott Rochfort
* November 10, 2008
A $32,300 investment made by a Melbourne housewife threatens to create a headache for the toll road group Brisconnections and the underwriters of its next two $408 million security instalments, Macquarie Group and Deutsche Bank.
Brisconnections remained unclear over the weekend whether its newest substantial shareholder, Mrs Fang He, would be able to cough up $65 million to fund the toll-road's next two $1 security instalments.
The company was caught off guard on Friday by a shareholder notice which showed Mrs He had snapped up 32.3 million securities, or a 8.26 per cent stake in the company, at 0.1c each.
The stake cost $32,300, or one-thousandth of the July listing price of Brisconnections' first instalment. But for the next two instalments, Mrs He is obliged to pay the initial listing price of $1.
When contacted by the Herald, Mrs He was unable to say if she could fund the instalments.
"I am only a housewife. My husband is running this business in my name," said Mrs He, who jointly owns the business Wang & He Investment with her spouse. Her husband did not return calls.
The investment makes Mrs He the toll road's second-largest shareholder behind the Queensland Investment Corporation.
The purchase means Mrs He is obliged to buy 32.3 million of the next two $1 instalments. Mrs He, who has registered her shareholding from the address of an aluminium window business in the Melbourne suburb of Springvale, will need to pay $32.3 million when the second instalment is payable on April 29, then $32.3 million when the final instalment lists in early 2010.
In all, Brisconnections plans to raise an extra $817 million from the next two instalments to help fund the $4.8 billion toll road project in Brisbane.
"All shareholders who have bought into the stock would be fully aware of their obligations in respect to the second and third instalments," a Brisconnections spokesman told the Herald.
The spokesman said the company had "no reason to believe at this stage" that any of its shareholders could not fund the next two instalments.
If the instalments cannot be fully funded by securityholders, Macquarie Group and Deutsche Bank, as the underwriters, will have to make up any shortfall.
Construction of the toll road project started last week.