Kerry Stokes is battling valiantly to salvage something from the wreckage that is the Alan Jackson built Austrim Nylex, but today's AGM was pretty gloomy and he's got it all ahead of him.
Stokes holds 48.22 million shares and has never sold one share, a stark contrast to a range of institutions, Dick Pratt and Alan Jackson who all bailed out at prices substantially above the current miserable level of 23c.
Directors copped plenty of grief but it was a lot more civil than last year's bloodbath which featured all sorts of malcontents, including former Jackson disciple Jack Tilburn.
The board predicted that investors who put up $100 million for unsecured convertible notes will not get the $9.5 million they are due in interest this year.
The notes convert in October 2004 and at present prices the noteholders will finish up with 40 per cent of the ordinary shares. There are shades of the debate leading to the demise of HIH. The $100 notes are trading at $20.20 which tells you what the market thinks the chances of getting any interest payments over the next two years are like.
I pointed out that Stokes has a conflict with three associates on the board because it is in his interest to recommend that noteholders do not get paid interest.
Tony Lewis from Lewis Securities stood for the board on a platform of gving the noteholders a voice but was swamped by the Stokes proxies.
Knuckles Jackson bought 36 businesses in a whirlwind 5 years at the top of Austrim before he was turfed after punching the CEO at a Christmas party two years ago. This is Alan Jackson, AO, former BTR Nylex CEO, former Austrade chairman and former Reserve Bank director we are talking about here.
New CEO Peter Crowley has done a reasonable job stabilising things but he's signalled his plan to quit and the company is still grappling with a $361 million debt. Austrim is formally in work out mode with its bankers who are charging penalty interest rates of about 9 per cent and severely limiting its financial options.
Thankfully for Stokes, his personal banker Westpac is also one of Austrim's three major lenders along with ANZ and NAB so in March this year they gave the board two years to get their house in order.
It will be a long road to hoe so don't expect Austrim shares to surge higher any time soon.
Stokes had one of his PR guys Tim Allerton watching proceedings at the South Melbourne soccer club near the Crikey bunker this morning and it was not a rosy message he would have taken back to his boss.
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