Sellers continue to dump toll road builder securities

September 3, 2008

Tony Grant-Taylor, The Courier-Mail

UNITS in BrisConnections lost ground again yesterday, losing another 27 per cent to 11c, making it one of the worst sharemarket investments in many years.

Units in the toll road builder were issued at $1 just over a month ago.

In a market where financial stocks at least did well, and the All Ordinaries Index shed a mere 0.1 per cent, sellers continued to dump BrisConnections.

Two major sales, of 5 million and 9 million shares were booked at 11c, as almost 24 million BrisConnections units flooded through the market.

That took turnover since the group floated well over 135 million units, or close to a third of those the group issued.

The share price was a "considerable disappointment", BrisConnections chief executive in waiting Ray Wilson told The Courier-Mail.

Dr Wilson, seconded to the toll road group from Thiess, after working on six similar projects over the past decade and a half, is convinced of the project's long-term value.

But for now, he said, "my job is to get on and build it, on time and on budget, and try to convince our major shareholders of the long-term value equation of which we are completely convinced".

That remained major shareholder Queensland Investment Corp's view with chief executive Doug McTaggart saying it would be a good long-term investment - as he has had to do several times since the QIC plunged $25 million into BrisConnections' float and topped up its holding thereafter.

But a number of private client dealers contacted by The Courier-Mail couldn't remember a worse major float - except that of ill-fated Australian Magnesium Corp which collapsed costing investors about $800 million.

"But that died a death of a thousand cuts," said ABN Amro Morgans adviser Tony Russell.

BrisConnections came to market at a time when shares in infrastructure specialists like Babcock & Brown and even Macquarie Bank were tanking and with BrisConnections chairman Trevor Rowe conceding the group was ripe for an attack by short sellers.

And even the fact that the group is due - though not guaranteed - to pay 15.27c a unit (in cash or new units) in its initial two dividends before June next year, and another 19.33c in the ensuing year and 24c in 2010-11 has not been able to prop up its unit price.