Will ComBank bullies blink over Centro today?
February 2, 2010
Dear Mayne Reporters,
First up today, click here for the edited highlights from Friday's final Business View of the year on Sky News Business. We covered some very lively territory including conflicts at WA News, Kevin Rudd's reckless spending spree, ComBank's Centro conflicts, ABC Learning and the big lessons of the year.
Also listen to Friday's brief final 2008 chat with Mike Smith on 4BC Brisbane and the final regular spot on 774 ABC Melbourne's Drive program with Libby Gore on Friday where we covered the infrastructure injection, financial disasters in 2008, Dick Pratt and the dwindling China boom.
Will ComBank bullies blink over Centro today?
We blew the whistle on ComBank's thuggish tactics against Centro in last Wednesday's edition and followed it up with a similar story in Crikey on Friday.
However, it all paled into insignificance when compared with this extraordinary column by Matthew Stevens in The Weekend Australian.
Whilst I've been trying to crank up the pressure on ComBank to roll Centro's debt today and have the obvious vested interest of a spot on the Centro Retail board at stake, Matthew Stevens has no such conflict yet still unloaded with an amazing attack on ComBank's chief head kicker, which began as follows:
Some describe Ross Griffiths as an elite banker, uncompromising, experienced and enormously strong-willed. Others, more bitterly, say he is the most obstinate, difficult man in the Australian commercial banking system. What is certain, though, is that Griffiths is a bloke who could, almost single-handed, dramatically amplify the recession we are about to have.
So just who is Ross Griffiths? He is the credit and risk management for Commonwealth Bank of Australia. Which means, given our suddenly straitened economic times, he is the bank's corporate hitman. Cometh the hour, cometh the man. When CBA boss Ralph Norris finds hundred-million-dollar problems, he sends in the burly Griffiths.
Over recent months, Griffiths and the Commonwealth have played a singular, shaping role in some of the most turbulent workout negotiations in recent memory. A 15-year veteran of Which Bank, Griffiths has won grudging respect for some for his aggression in protecting his bank's interests. But he has also built a cohort of powerful enemies too.
It was Griffiths who drove Bob Mansfield and Sir Rod Eddington to turn out the lights at Allco Finance Group in November. Griffiths was the "hardest a*se" in assembling the fraught and still impermanent life support offered to Babcock & Brown. It is Griffiths who is blamed for triggering OZ Minerals' continuing dance with debt death. And, most critically, it is the foreboding figure of Griffiths who stands between Centro Properties and survival.
Talk about giving someone who has never been mentioned in the mainstream media a baptism of fire. ComBank CEO Ralph Norris and the CBA board will be under intense pressure to intervene today and stop Griffiths further damaging the bank's reputation. After all, CBA is meant to be the nation's largest fund manager through its Colonial First State division, yet across the Chinese wall it has a man running loose who almost seems to delight in destroying equity.
I wouldn't be at all surprised if Griffiths wasn't also at the centre of PBL Media's debt battles, given this extraordinary attack on ComBank unleashed by A Current Affair two weeks ago.
ComBank's various victims are clearly starting to compare notes because Matthew Stevens had plenty of damning detail in Saturday's story - such as the revelation CBA is the only one of 23 parties yet to sign-off on the Centro rollover. Stevens was orginally a resources writer who now columnises more widely, but I suspect it is the old mining contacts who helped set him onto CBA, given this extract from Saturday's story:
OZ Minerals has until December 29 to deliver, with black and white certainty, the refinancing of two facilities worth $US560 million ($856 million). The urgency in refinancing these facilities is largely a product of the Commonwealth's intervention. OZ believed that the "reasonable endeavour" clauses in those two loan agreements would allow it to routinely roll its repayment dates.
That changed late on Thursday, November 27, when the Commonwealth informed OZ Minerals that it would not roll. OZ immediately sought a trading halt and then, two days later, the suspension in which it remains.
According to insiders, Griffiths' people would only extend the repayment schedule if the bank received additional security. The request was considered and rejected at a board meeting. In delivering greater security to one bank, the company ran the risk of triggering default conditions with all its other bankers. This risk was clearly understood by the Commonwealth.
What puzzled everyone, including the other bankers, is why the Commonwealth would seek more security knowing it could not have it. OZ Minerals was declared a dead company walking last Wednesday after it announced it was not likely to meet the refinancing deadline set only a week earlier.
But where there is life there is hope. According to one player in this near-tragic OZ Minerals saga, this has been a "cathartic week" for its refusenik banker, a week that began in traumatic division and ended with "a wonderful consensus beginning to emerge" between the miner and the banks.
Sources suggest that over the past two weeks the Commonwealth has been outed as a core problem in the OZ negotiations, become the subject of high-level political lobbying, particularly from a South Australian Government concerned that financial institutions that benefited from federal government guarantees were needlessly threatening jobs and, it is claimed, been threatened with legal action by an increasingly agitated and desperate OZ Minerals executive.
With politicians, clients and the media all rounding on ComBank, it surely wouldn't be stupid enough to go ahead and pull the plug on Centro when the debt deadline expires at 5pm today.
There has also been media reports that BHP-Billiton would love to buy the Prominent Hill copper-gold mine in South Australia from Oz Minerals given the synergies that would come from its nearby Olympic Dam facility.
This throws up a fascinating conflict of interest given that ComBank chairman John Schubert also happens to be the next in line to assume the chair at BHP-Billiton. Let's hope Schubert picks up the phone to ComBank CEO Ralph Norris this morning with two words of advice: "Roll Centro!"
Who knows, a more customer-friendly attitude might even turn around CBA's tumbling share price. Based on Friday's close, Westpac is now the nation's most valuable bank with a market capitalisation of $42.3 billion.
CBA's market cap of $39.3 billion isn't much ahead of third-placed NAB at $35.7 billion. It has been many years since CBA has not been one of our two most valuable banks. With Westpac the new number one, maybe CBA should study its more considered approach to both risk management and corporate workouts.
That's all for now.
Do ya best, Stephen Mayne
* The Mayne Report is a multi-media governance website published by Stephen Mayne with occasional email editions. To unsubscribe from the emails click here.
First up today, click here for the edited highlights from Friday's final Business View of the year on Sky News Business. We covered some very lively territory including conflicts at WA News, Kevin Rudd's reckless spending spree, ComBank's Centro conflicts, ABC Learning and the big lessons of the year.
Also listen to Friday's brief final 2008 chat with Mike Smith on 4BC Brisbane and the final regular spot on 774 ABC Melbourne's Drive program with Libby Gore on Friday where we covered the infrastructure injection, financial disasters in 2008, Dick Pratt and the dwindling China boom.
Will ComBank bullies blink over Centro today?
We blew the whistle on ComBank's thuggish tactics against Centro in last Wednesday's edition and followed it up with a similar story in Crikey on Friday.
However, it all paled into insignificance when compared with this extraordinary column by Matthew Stevens in The Weekend Australian.
Whilst I've been trying to crank up the pressure on ComBank to roll Centro's debt today and have the obvious vested interest of a spot on the Centro Retail board at stake, Matthew Stevens has no such conflict yet still unloaded with an amazing attack on ComBank's chief head kicker, which began as follows:
Some describe Ross Griffiths as an elite banker, uncompromising, experienced and enormously strong-willed. Others, more bitterly, say he is the most obstinate, difficult man in the Australian commercial banking system. What is certain, though, is that Griffiths is a bloke who could, almost single-handed, dramatically amplify the recession we are about to have.
So just who is Ross Griffiths? He is the credit and risk management for Commonwealth Bank of Australia. Which means, given our suddenly straitened economic times, he is the bank's corporate hitman. Cometh the hour, cometh the man. When CBA boss Ralph Norris finds hundred-million-dollar problems, he sends in the burly Griffiths.
Over recent months, Griffiths and the Commonwealth have played a singular, shaping role in some of the most turbulent workout negotiations in recent memory. A 15-year veteran of Which Bank, Griffiths has won grudging respect for some for his aggression in protecting his bank's interests. But he has also built a cohort of powerful enemies too.
It was Griffiths who drove Bob Mansfield and Sir Rod Eddington to turn out the lights at Allco Finance Group in November. Griffiths was the "hardest a*se" in assembling the fraught and still impermanent life support offered to Babcock & Brown. It is Griffiths who is blamed for triggering OZ Minerals' continuing dance with debt death. And, most critically, it is the foreboding figure of Griffiths who stands between Centro Properties and survival.
Talk about giving someone who has never been mentioned in the mainstream media a baptism of fire. ComBank CEO Ralph Norris and the CBA board will be under intense pressure to intervene today and stop Griffiths further damaging the bank's reputation. After all, CBA is meant to be the nation's largest fund manager through its Colonial First State division, yet across the Chinese wall it has a man running loose who almost seems to delight in destroying equity.
I wouldn't be at all surprised if Griffiths wasn't also at the centre of PBL Media's debt battles, given this extraordinary attack on ComBank unleashed by A Current Affair two weeks ago.
ComBank's various victims are clearly starting to compare notes because Matthew Stevens had plenty of damning detail in Saturday's story - such as the revelation CBA is the only one of 23 parties yet to sign-off on the Centro rollover. Stevens was orginally a resources writer who now columnises more widely, but I suspect it is the old mining contacts who helped set him onto CBA, given this extract from Saturday's story:
OZ Minerals has until December 29 to deliver, with black and white certainty, the refinancing of two facilities worth $US560 million ($856 million). The urgency in refinancing these facilities is largely a product of the Commonwealth's intervention. OZ believed that the "reasonable endeavour" clauses in those two loan agreements would allow it to routinely roll its repayment dates.
That changed late on Thursday, November 27, when the Commonwealth informed OZ Minerals that it would not roll. OZ immediately sought a trading halt and then, two days later, the suspension in which it remains.
According to insiders, Griffiths' people would only extend the repayment schedule if the bank received additional security. The request was considered and rejected at a board meeting. In delivering greater security to one bank, the company ran the risk of triggering default conditions with all its other bankers. This risk was clearly understood by the Commonwealth.
What puzzled everyone, including the other bankers, is why the Commonwealth would seek more security knowing it could not have it. OZ Minerals was declared a dead company walking last Wednesday after it announced it was not likely to meet the refinancing deadline set only a week earlier.
But where there is life there is hope. According to one player in this near-tragic OZ Minerals saga, this has been a "cathartic week" for its refusenik banker, a week that began in traumatic division and ended with "a wonderful consensus beginning to emerge" between the miner and the banks.
Sources suggest that over the past two weeks the Commonwealth has been outed as a core problem in the OZ negotiations, become the subject of high-level political lobbying, particularly from a South Australian Government concerned that financial institutions that benefited from federal government guarantees were needlessly threatening jobs and, it is claimed, been threatened with legal action by an increasingly agitated and desperate OZ Minerals executive.
With politicians, clients and the media all rounding on ComBank, it surely wouldn't be stupid enough to go ahead and pull the plug on Centro when the debt deadline expires at 5pm today.
There has also been media reports that BHP-Billiton would love to buy the Prominent Hill copper-gold mine in South Australia from Oz Minerals given the synergies that would come from its nearby Olympic Dam facility.
This throws up a fascinating conflict of interest given that ComBank chairman John Schubert also happens to be the next in line to assume the chair at BHP-Billiton. Let's hope Schubert picks up the phone to ComBank CEO Ralph Norris this morning with two words of advice: "Roll Centro!"
Who knows, a more customer-friendly attitude might even turn around CBA's tumbling share price. Based on Friday's close, Westpac is now the nation's most valuable bank with a market capitalisation of $42.3 billion.
CBA's market cap of $39.3 billion isn't much ahead of third-placed NAB at $35.7 billion. It has been many years since CBA has not been one of our two most valuable banks. With Westpac the new number one, maybe CBA should study its more considered approach to both risk management and corporate workouts.
That's all for now.
Do ya best, Stephen Mayne
* The Mayne Report is a multi-media governance website published by Stephen Mayne with occasional email editions. To unsubscribe from the emails click here.