Brisconnections' Rowe Says Company May Appoint Debt Collectors

By Jason Scott

Nov. 16 (Bloomberg) -- Trevor Rowe, chairman of BrisConnections, a venture between Leighton Holdings Ltd. and Macquarie Group Ltd., says if necessary the company will appoint debt collectors to get money owed to it by investors who bought its stapled securities.

Shares of the toll road builder have dropped 99.9 percent since its A$1.23 billion ($797 million) initial public offering in July. The shares were sold as stapled securities, with A$1 paid on application and two further installments of A$1 each payable in nine months and 18 months, it said in July.

Leighton, Australia's biggest builder, and Macquarie, the nation's biggest investment bank, set up the venture in May to manage a project to build A$4.8 billion of roads in Queensland state.

Rowe spoke today on ABC's Inside Business television program.

On the stapled securities:

``Anyone buying the units of BrisConnections needs to understand, and we've been assiduously trying to ensure the market is fully informed, that there's two additional installments due of A$1 each. So anyone buying these units has a liability for A$1 in April 2009 and a year later for another A$1. If they don't pay in April we have an obligation under the underwriting agreement that we need to pursue the collection of any outstanding installments, but we get the money anyway because it's underwritten by Deutsche Bank and Macquarie Bank.

``We are obliged to pursue people. We'll probably have debt collectors go out and endeavor to collect it.

``In the longer term this is an extremely valuable investment. This is a crucial piece of infrastructure connecting the Brisbane central business district with the airport and the airport precinct, the trade zone, and to the northern suburbs.''

On the credit crisis:

``There is this de-leveraging process still working itself through the financial markets. There's a ways to go on that yet.

``Liable spreads are easing and easing significantly but we're not seeing a proper functioning of credit markets yet, they are still dysfunctional, and then finally, the spill over into the real economy I think has been more severe than policy makers and a lot of us thought it would. It's happened very quickly.

``It's going to take some time to work itself through. If the U.S. is not in a recession, it certainly looks like it, and I'm very negative on Europe and the U.K.

``The big question for Australia is where does China sit in all this? Now, that extraordinary fiscal stimulus package they announced of some $568 billion, a lot of that was existing money, a lot of it's spread over a back-ended period but nevertheless I think the Chinese will defend an 8 per cent growth rate because they have to from a socioeconomic point of view. Their banking system, ironically, looks in better shape than the U.S. banking system.

``In Australia, we're very fortunate we've got this bipolar economy between the resource infrastructure side of it and the very weak consumer demand area, and of course the government's taken some pretty bold measures in terms of getting the economy moving.''

To contact the reporter on this story: Jason Scott in Perth at Jscott14@bloomberg.net;