Bond - Terence Maher by Must Read Summaries

Author:Must Read Summaries
Language: eng
Format: epub
Publisher: Primento Publishing

1974/75 - The First Great Sell-Off

Bond came back to an Australia in the grips of a severe depression. He was forced to enter into protracted negotiations with his financiers for the restructuring or realignment of debt arrangements. He was also asked to give his personal guarantee over a number of the loans, so he assumed final liability for almost $50 million worth of debt during the early part of 1975. The debt restructuring process was carried out in the glare of intense media interest, and the process took its toll on Bondy. He was admitted to hospital in January 1975 totally exhausted.

However, even in the midst of all the pressures, his management team never lost sight of the larger picture. "Even in the 1970s, we never doubted our future, so we continued to do things like the Cup campaign that would benefit our future. The bad times are the right time to get ready for the good times and Alan Bond is wonderful at stiffening the back of anyone in doubt," said one of his management team.

BondCorp shares, which had been trading at 56 cents, fell to 9 cents around this time. The Cup challenge had cost Bondy about $2 million. Money was extremely tight, and help came from an old family friend, Sir Charles Court whose Liberal Party was in power in Western Australia. He personally phoned many of Bond’s major creditors and told them that if they wanted to do any business with the State Government in the future they had better continue to support Alan Bond. Bondy had, while in America, taken the time to visit the American parent companies of his major creditors and put forward his position. He also cultivated contacts with Perry Bass, a Texan oil man and Baron Marcel Bich, a French plastics tycoon.

Bond’s creditors were in a position that they stood to lose more money if Alan Bond collapsed than if he could trade on and pay them back. Around this time, Alan Bond closed ranks with the West Australian state government in what was later to become known as WA Inc. There was considerable criticism from the opposition, but the links between the government and BondCorp grew stronger as time passed. In mid-1975, the State Government purchased the 5,080-acre Santa Maria block from BondCorp for $16 million, giving the company a bit of breathing space. At about the same time, Alan Bond also announced he had been offered a mammoth US$100-million letter of credit which wasn’t repayable until the mid-1980s. BondCorp also sold its stake in Robe with a net $6 million profit. This was the forerunner of a huge BondCorp asset sale which was to last for the next two years and would see debt levels reduced from $81.6 million to $48.5 million.

In the midst of this great sell-off, Bond led the 1977 challenge for the America’s Cup in a new yacht, Australia. The campaign was to cost $1.4 million and the challenger was found in a best of four elimination series.

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.