Asciano boss to dump $80m in shares
Sydney Morning Herald
Tuesday July 14, 2009
ASCIANO boss Mark Rowsthorn and his banker UBS will dump up to $79.8 million of the company's stock on the sharemarket to help pay for his liability under the company's capital raising a deal that could reap the managing director a $10.2 million windfall.Mr Rowsthorn committed to buying $151 million of shares under the capital raising but will have to sell most of his existing 76 million shares in Asciano to pay for it.Mr Rowsthorn has also entered into 12-month hedging arrangement with UBS to help finance the deal.The massive sale, which will dilute the shareholdings of retail investors who accepted the entitlement offer, was revealed by UBS 10 minutes before the retail offer expired at 5pm yesterday.Last month the port and rail operator announced a $2 billion equity raising to help pay its crippling debt. At May 31 this year Asciano had drawn down more than $4.9 billion of its senior debt facilities, of which $2.66 billion must be repaid this financial year. Under the offer Mr Rowsthorn, who owns 10.92 per cent of Asciano, committed to buy $151 million of stock at $1.10 a share. How he planned to pay for it has been a mystery.In a statement to the Australian Securities Exchange in May, Asciano said: "Mark Rowsthorn's current intention is to take up his entitlement ... and to apply for up to $151 million worth of securities in the non-underwritten conditional placement to maintain his current 10.92 per cent holding in Asciano."At 4.50pm yesterday, UBS contacted banks, funds and broking firms offering a bookbuild of between 56 million and 66.5 million Asciano shares.Potential buyers were told the securities were "being sold jointly by Mark Rowsthorn and UBS" to pay for Mr Rowsthorn's obligation under the entitlement offer.UBS said Mr Rowsthorn had taken out a loan and would have to sell shares to finance his purchase. The bank revealed that "Mr Rowsthorn has entered into a collar arrangement with UBS for existing Asciano shares for a period in excess of 12 months. As part of this block transaction UBS will be selling a parcel of shares to hedge its exposure to the collar arrangement."There are no share price triggers in the loan that may result in early repayment.Under the UBS bookbuild, the final price of Mr Rowsthorn's share sale will range from $1.20 to $1.30 a share, depending on the number sold. If the maximum of 66.5 million shares is reached, the sale will reap $79.8 million.Such a deal would give Mr Rowsthorn a paper profit of 10c a share, or $6.65 million, as his new shares will cost $1.10 each. If 56 million shares are sold, Mr Rowsthorn will reap a 20c a share profit, or $10.2 million profit.The deal angered many stockbrokers and fund managers, who said he had failed to disclose the details of his personal deal to the market."You have to question the timing, as the retail offer closed just 10 minutes later," said Dean Fergie, executive director of OC Funds Management, which was offered Asciano shares by UBS last night.Asciano could not be contacted for comment last night.
© 2009 Sydney Morning Herald