Australia, Capital Markets, Featured Work, Infrastructure - Monday, June 1, 2009 12:05 - 0 Comments

Brisconnections: infrastructure’s disconnect

Euromoney, May 2009

If you want a microcosm of the bad habits global capital got into as the credit crunch hit, go to Brisbane. The story of Brisconnections there has everything you need, and its conclusion – unresolved at the time of writing – will have major ramifications for the way infrastructure is funded in Australia and beyond.

BrisConnections was set up by Macquarie Capital Group and the construction firms Thiess and John Holland to design, build, operate and finance a A$4.9 billion airport toll road in Brisbane, under a 45-year concession awarded by the state of Queensland in May 2008. BrisConnections floated two months later at A$1 a share, lost 60% of its value in a day and by November had hit one tenth of an Australian cent, the lowest possible price on the Australian Securities Exchange. The A$1.2 billion float, underwritten by Macquarie and Deutsche, used an instalment model in which investors paid A$1 up front, with two more payments to come in subsequent years, meaning they remain on the hook for two instalments which will each cost 1,000 times more than the trading value of the stock today.

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