Australian investment bank Macquarie - which prides itself on savvy investment strategies - looks to have landed itself in a right financial and legal mess in the form of toll road operator BrisConnections.
Macquarie on Monday took legal action in an effort to protect itself from having to cover millions of dollars worth of payments owed for shares in the A4.8bn ($3.27bn) toll road project. The Australian group became a key party in the venture along with Leighton Holdings, with a long-term agreement that they expected would bring hefty profits. But they are now looking at the possible collapse of the massive project.
Not only are banks which had committed to lend around A$3bn to BrisConnections looking distinctly reluctant now. But Macquarie - together with Deutsche Bank - had jointly underwritten a A$390m call due April 29 as an instalment on shares - a call that shareholders are now indicating they will almost certainly fight. What’s more, Macquarie has just piled more than A$320m into bridging loan finance for the troubled company - and another A$390m instalment is due early in 2010.
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