Mark Milner and Christopher Zinn in Sydney
AUSTRALIA is facing one of the biggest share flops in its history after investors cold-shouldered an innovative package aimed at financing the building of the Sydney 2000 Olympic stadium.
Final figures for the A$364,4-million (R1265-million) issue, which closed on Thursday last week, have not yet been released, but the take-up is less than 50%, according to one of the banks involved in the offer.
Some reports suggest that little more than a third of the shares have been sold, despite a longer than usual offer period and a closing date that has been delayed twice.
The issue was designed to provide the bulk of the A$463-million needed to build the 110000-seater stadium. Australian analysts say the offer flopped because it was too expensive.
Investors were asked to stump up A$10000 for a “gold” package, which promised a seat at every Olympic event to be staged in the stadium, stadium membership for 30 years and 1000 shares in the stadium company.
For those prepared to pay A$33000 (only just below a year’s average income in Australia) a platinum pass offered two seats, as well as membership privileges and shares.
However, the issue’s flop will not affect the financing programme, because the offer was underwritten (effectively guaranteed) by four big financial institutions: ANZ Securities, Macquarie Bank, Deutsche Morgan Grenfell and ABN Amro Hoare Govett.
These will have to come up with the balance of the funds that the issue was to have raised, but they will be able to offset their exposure over the coming years by selling the gold and platinum packages left.
An ABN Amro representative, acknowledging a less than 50% take-up, said: “You have to look at the longer term. As 2000 approaches, we expect investors’ interest in both the Olympics and the stadium to increase.”
He pointed out that when the Dutch soccer club Ajax offered boxes and seats in its new Amsterdam stadium, interest had been limited while the project was on the drawing board.
But once the stadium was being built, “people were offering to pay two or three times the original price for the boxes”.