Lock-up, debt, Crown deal, Telstra, Oz Minerals tilt, Macquarie, capital raisings, AXA, Alumina and Westfield

February 2, 2010

Dear Mayne Reporters,

This time last year, your correspondent was in Canberra for the budget lock-up for Crikey. Alas, it wasn't to be this year and besides, there's an ABC Learning creditor's committee meeting at 2.30pm and then a Manningham Council meeting for at least three hours tonight - as happens every Tuesday! However, we did make a fun video on last year's lock-up, so click below to check it out.

Being in Melbourne on budget day doesn't preclude us from a comment or two. The biggest story tonight will be around the extraordinary debt and the incredible deterioration in Federal finances.

If you add up the budget outcomes of the 11 full financial years that John Howard and Peter Costello were responsible for, it comes to an overall surplus of $54.18 billion. And that's after deducting the solitary deficit - $2.58 billion in 2001-02. Now it seems the deficit in 2009-10 will exceed the combined 11 years of Howard surpluses. Oh dear!

As this story in last year's Crikey lock-up special explained, Treasury under-cooked the budget surplus forecast by an average $4.4 billion over the Howard years.

The Rudd Government will today deliver the biggest missed budget forecast in Australian history with a $50 billion-plus swing away from the first surplus forecast for 2008-09 of $21.7 billion.

Whilst Wayne Swan has been talking up this "$200 billion revenue hole" over 4 years, the really interesting figures in the budget will be to examine exactly how much overall spending and tax revenue has deviated from the original forecasts.

For instance, the 2008-09 welfare budget started off at $103 billion but will probably finish at more than $130 billion courtesy of the cash splash.

And this is how total tax revenue actually ran over the final four years of the Howard Government:

2003-04: $175 billion
2004-05: $194 billion (up $19 billion or 10.85%)
2005-06: $206.8 billion (up $12.8 billion or 6.6%)
2006-07: $221.3 billion (up $14.5 billion or 7%)

This Crikey story from last year's Budget special also highlights Treasury's failure to predict the credit crunch would hit tax revenue, even though Wayne Swan spent part of his lock-up press conference labouring that very point. Indeed, if revenue really had been savaged, why on earth was 2008-09 tax revenue predicted to be $8 billion more than those figures presented by Treasury and Peter Costello in May 2007?

If today's budget figures really is a story of collapsing revenue, then we just need to assess precisely how far it has fallen. A useful measure is to look at what Treasury predicted about 2008-09 tax revenue in the forward estimates over the earlier years:

2005-06 forecast for 08-09 revenue: $230.1 billion

2006-07 forecast for 08-09 revenue: $236.7 billion

2007-08 forecast for 08-09 revenue: $244.1 billion

2008-09 forecast for 2008-09 revenue: $252.1 billion

A $200 billion revenue hit over four years suggests an average $50 billion annual reduction which, if evenly spread, would see 2008-09 revenue plunging to just $202 billion.

Then again, I suspect the revenue hit will be concentrated in the out years. A figure of $230 billion wouldn't surprise for 2008-09, but the really big question is how much last year's 2009-10 revenue forecast of $274 billion is revised down? You'll know in 6 hours!

Gambling addict John Brumby gives James Packer a free kick

The cynicism of politicians is boundless. At a time when the Victorian Government is under pressure over its addiction to losses by problem gamblers, John Brumby has unveiled a tax cut and expansion for the world's biggest casino under the cover of the Federal budget.

Stephen Bartholomeusz has given the commercial arguments a positive spin on Business Spectator and you can check out all the various press releases by the main players here.

Jeff Kennett ran into huge political problems with his various sweetheart deals for Crown and its major backers - Kerry Packer, Ron Walker and Lloyd Williams. Now former casino critic John Brumby has come along and in one announcement approved a staggering 43% increase in the number of tables from 350 to 500.

Rob Hulls, Victoria's deputy premier and Attorney General, told me on the night Jeff Kennett was defeated that Ron Walker and Lloyd Williams wouldn't be sleeping well. The self-declared "Minister for Royal Commissions" was then moved out of the gaming portfolio after some lobbying by Packer fixer Graham Richardson.

James Packer then sat with Premier Steve Bracks at the biggest ever Labor fundraiser in Victorian history as you can see from this guest list we pinched on the night just weeks after Kennett's defeat. The Packer forces also handed over a $100,000 donation to Labor and the threats of royal commissions or harsh regulatory interventions miraculously subsided.

Whilst all this was reprehensible, I never thought we'd see the day where the world's biggest casino complex as measured by floor space, would be allowed to dramatically expand its gambling operations.

It just goes to show how desperate the states have become to raise tax revenue. Australians already lose more per head gambling than any other people in the world, but now that statistic will get even worse courtesy of today's announcement.

Off and running with OZ Minerals tilt

After ending a run of 40 consecutive defeats in contested elections with last November's victory in the City of Manningham council elections, we're hoping to also break the duck in corporate elections after nominating for the board of OZ Minerals Ltd at the 2009 AGM to be held on June 11 in Melbourne.

The notice of meeting was released last Friday morning and, after some minor tinkering by the company, the platform appeared as follows:

Mr Mayne has said that he is standing for the OZ Minerals board as a catalyst for change. Mr Mayne has said that he believes that there needs to be more boardroom accountability for OZ Minerals' financial position and the decision last year to ignore an overwhelming shareholder vote and award an $8.3 million retirement payment to former Oxiana Ltd Managing Director and Chief Executive Officer, Mr Owen Hegarty.

With the share market now up 26% from its lows of March 9, the revised offer of $US1.206 billion by the Chinese Government for all the major assets except Prominent Hill is starting to look a bit under-done, especially with a contract for the $US211 million sale of Martabe now inked.

After all, with the Aussie dollar surging through US77c, the bid is now only worth $A1.566 million - $200 million less than the $1.75 billion mentioned in the ASX release on April 1.

Indeed, the independent expert, Grant Samuel, believes the assets are not fairly priced given these words in the material released on Friday:

In Grant Samuel's view the Consideration payable by Minmetals of US$1,206 million is less than the underlying value of the Sale Assets. Arguably, the Proposal represents the realisation of a substantial part of OZ Minerals' asset base on terms struck at a time of particularly depressed prices for resources assets.

However, Grant Samuel then goes on to tentatively endorse the deal because of the OZ Minerals finances. OZ Minerals is a company which simply should never have had a banking crisis, let alone suffer the staggering $94.5 million in fees gouged by its dysfunctional banking syndicates over the past few months.

We gave the banks both barrels on May 1 in this exchange on Sky's Business View program and particularly went after ANZ given all those advertisements it ran trumpeting the way it had helped Owen Hegarty get Oxiana up and running.

Whilst the two French banks and the nationalised British majors were clearly outrageously obstinate, the likes of Westpac also behaved appallingly with OZ Minerals when we were only talking about a company with $1 billion in debt and assets worth at least $3 billion.

The Big Four should have just passed the hat around to get OZ Minerals refinanced, instead we've had a completely unnecessary fire sale to the Chinese Government.

We've updated our list tracking Chinese investment in the Australian resources sector so you can see how broad the push is to snap up projects and companies or all sizes.

There's also this package of all our past commentary, AGM action and videos on OZ Minerals which we'll be adding to as the vote gets closer.

Telstra - we picked this

Given the dramatic events at Telstra on Friday, we're pleased that the following appeared in our April 30 Mayne Report edition:

All this and more was discussed on Radio National last Friday with Peter Mares, including predictions that Donald McGauchie might be gone from the Telstra chair within weeks. Have a listen here.

Whilst David Murray himself would be reluctant to call an EGM to remove McGauchie, what if some small shareholders rustled up the 100 signatures for the show down? Murray would then have to finish the job, by voting the Future Fund's 17% against McGauchie.

This then raises the question of who would succeed McGauchie. Charles Macek is thought to be keen but for mine it should be former Cochlear CEO Catherine Linvingstone.

That's got to be in our top three predictions, right up there with this BrisConnections package and this very early call on Christmas Eve 2007 that ABC Learning was in trouble.

Not enough Aussies at the top

Michael Pascoe has produced an excellent video for the Fairfax websites on Telstra's board changes and the Saturday papers were just full of analysis.

Our only contribution was this interview on 720 ABC Perth, which wasn't the best given the big play made about Telstra installing an Aussie CEO when David Thodey actually grew up and was educated in New Zealand. However, Telstra has certainly followed NAB's lead in moving from a big-name foreign import to a successor already with the company, which leaves the top 10 looking like this:

BHP: Marius Kloppers, South African
Rio Tinto: Tom Albanese, American
Westpac: Gail Kelly, South African
Commonwealth Bank: Ralph Norris, Kiwi
Telstra: David Thodey, Kiwi
NAB: Cameron Clyne, Aussie
ANZ: Mike Smith, Pom
Woolworths: Michael Luscombe, Aussie
Woodside: Don Voelte, Yank
Westfield: Frank Lowy, born in Czeckoslavakia but arrived Down Under in 1952

Whilst Rio Tinto is head-quartered in London and News Corp is run out of New York, what this list really demonstrates is the complete failure of Melbourne to produce any decent executive talent.

Back in the late 1980s, Melbourne boasted 8 of the 10 largest companies and they were all run by locals such as Alan Jackson (BTR), Phil Brass (Pacific Dunlop), Coles Myer (Brian Quinn), Nobby Clarke (NAB), Will Bailey (ANZ), John Ralph (CRA), Brian Loton (BHP) and John Elliott (Elders IXL).

These days you have to go all the way down to CSL CEO Brian McNamee to find a major CEO who hails from Melbourne and runs a Melbourne-based company.

Telstra's headquarters gravitated towards Sydney when Sol Trujillo declined to live in Melbourne and now the company has also opted for a Sydney-based chair in Catherine Livingstone.

However, Catherine is a first-rate operator and it is terrific that we've finally got a female chair of one of 10 largest companies. Women still represent less than 10% of public company directors in Australia, so the first thing Catherine should do is end her status as the solitary female on the Telstra board.

Another round with the overpaid Alumina directors

We've long given post-box company Alumina a hard time for paying its directors full freight when all they do is manage a post box company with a handful of staff that owns a 40% stake in the global AWAC joint venture run by Alcoa out of Pittsburg.

And so it was last Thursday at the 2009 AGM, but we also got into the detail of whether retail shareholders will be treated fairly in the forthcoming retail entitlement offer. Here is a package of edited audio highlights from all the exchanges:

A couple of questions about the structure and entitlements of the capital raising

Will there be a board/staff policy about your ability to apply for extra shares?

The people who are discriminated against regarding this offer are retail shareholders, not the board.

What are the management costs for our post box company?

When does the chairman turn 70?

How does the CEO Mr Bevan divide his time?

Will you allow shareholders to decide whether more or less directors are needed?

Past AGM battles with Alumina

Alumina May 1, 2008
Elected to Alumina board on show of hands but defeated in poll - see package of highlights.

Alumina April 27, 2007
Another crack at the post office box company and its lunch club board - see package of highlights.

Alumina April 27, 2006
The directors lunch club for this post box company continues - see package of highlights.

Alumina April 27, 2005
Campaign against overpaid, underworked board - see package of highlights.

Alumina May 2, 2003
First crack at the post-box company which overpays directors - see package of highlights.

A lack of debate at the Westfield AGM

The Westfield AGM last Thursday was a big moment because former finance director Stephen John copped a staggering 36% against vote - all because RiskMetrics reckons he's not independent.

John is one of the top 5 finance directors of all time in Australia and I was very impressed with his chairmanship of the Spark Infrastructure AGM in Sydney two weeks ago as you can see from these edited audio highlights.

Yet there he was receiving bigger protests than the likes of ABC Learning chairman David Ryan copped at Lend Lease last year.

Stephen John clearly isn't independent, but he shouldn't be treated like former Allco directors Sir Rod Eddington and Barbara Ward. The bloke has a fantastic record and has done precisely nothing wrong.

At the end of the day independent directors are needed in part to stop insiders, founders or management from helping themselves to disproportionate benefits.

And that is precisely what happens at Westfield given the Lowy family helped themselves to an excessive $32 million in pay entitlements last year when the share price almost halved.

Yet RiskMetrics could not bring itself to recommend against the Westfield remuneration report, so it sailed through with more than 90% in favour.

RiskMetrics should have been in favour of everything, or against both the remuneration and Stephen John, for not doing his job in curbing Lowy family greed when it comes to pay.

In John's defence, he doesn't even sit on the Westfield remuneration committee, which is chaired by former Fairfax CEO Fred Hilmer.

Have a listen to Fred heap praise on Frank Lowy whilst defending his $400,000 pay rise to a record $16.2 million last year. Sadly, there was only one relatively tame question from the ASA on the remuneration report, whereas last year we sparked this lively exchange with Frank.

And here's a package of the 5 AGMs bouts we've enjoyed with Frank over the years. The guy is an absolute business legend, but as we explained in this Fairfax online column, he's also greedy. Unfortunately, shareholders failed to pass on that message this year.

AXA Asia Pacific Holdings AGM

Last Wednesday we attended the Axa AGM in Melbourne and landed some solid hits on the fact that a majority of directors don't have any skin in the game. Here is the edited audio highlights:

A couple of questions about the recent $800 million capital raising

Some questions to the board about our banking costs, debt covenents and other things financial

Paul Cooper has done 14 years and he is not an independent director so why go again for election?

How big is that loan to Centro?

Why hasn't this board got some decent skin in the game at non-executive director level?

Is there any reason Tony Froggatt why you are not on the register?

Could you explain the final calculation of the payout to you chairman and Paul Cooper?

This meeting should protest against the 30 per cent increase in the executive pay cap, when no director has any substantial holdings on the register.

Past AGMs exchanges with AXA

Axa April 16, 2008
Had several cracking exchanges and landed a few hits on some of the time-servers on the board - see package of highlights.

AXA April 19, 2007
Always fun to test the French parent and chairman Rick Allert - see package of highlights.

AXA April 12, 2006
Would have been a dead AGM but for our questions - see package of highlights.

AXA (candidate) Feb 15, 2001
Polled poorly given French parent but mounted a strong argument - see package of highlights.

AXA Melbourne, Feb 15, 2000
Day after Crikey launched, called for former CEO Eric Mayer to quit board, which he did a few months later - see package of highlights.

A remarkable federal debt binge

Malcolm Turnbull and Kerry O'Brien had a most interesting debate on the half past seven show last Wednesday and if there are many other lefty journalists around who somehow don't think Australia is going to have a major public sector debt problem, here is the full breakdown of the staggering $24 billion that the feds have borrowed since the second stimulus package was announced on February 3:

May 8, 2009: $700m tender of 10 years bonds expiring in March 2019 were sold for an average yield of 4.95% and was 3.8 times over-subscribed.

May 7, 2009: $1.5 billion tender of 3, 6 and 9 month treasury notes which sold for between 2.79% and 2.95% and was over-subscribed by between 2.1 times and 5.1 times.

May 6, 2009: $700m tender of 11 year bonds expiring in April 2020 were sold for an average yield of 5.0042% and was 3.2 times over-subscribed.

May 1, 2009: $700m tender of 1 year bonds expiring in August 2010 were sold for an average yield of 2.67% and was a 5.5 times over-subscribed.

April 30, 2009: $1.5 billion in three tranches of short-dated treasury notes issued.

April 29, 2009: $700m tender of 11 year bonds expiring in April 2020 were sold for an average yield of 4.68% and was a 2.9 times over-subscribed.

April 24, 2009: $700m tender of 8 year bonds expiring in February 2017 were sold for an average yield of 4.37% and was 3.6 times over-subscribed.

April 23, 2009: $1.5 billion in three trenches of short-dated treasury notes issued.

April 22, 2009: $700m tender of 3 year bonds expiring in April 2012 were sold for an average yield of 3.53% and was a 5.5 times over-subscribed.

April 17, 2009: $700m tender of 2 year bonds expiring in June 2011 were sold for an average yield of 3.32% and was a 4.9 times over-subscribed.

April 16, 2008: $900m of Treasury Note tenders across 3 tranches of $300 million. 90 day paper went for 2.74%, 180 day paper was 2.64% and 9 month money cost 2.84%.

April 15, 2009: $700m tender for 10 years bonds expiring in March 2018 were sold for an average yield of 4.63% and was 3.2 times over-subscribed.

April 8, 2009: $700m tender for 12 year bonds expiring in May 2021 were sold for an average of 4.87% and was 3.4 times over-subscribed.

April 3, 2009: $599m tender for 4 year bonds expiring in May 2015 were sold for an average yield of 3.84% and was 3.4 times over-subscribed.

April 2, 2009: $300m tender for 90 day treasury notes expiring on July 3 were sold for an average yield of 2.78% and was 5.1 times over-subscribed.

April 2, 2009: $300m tender for 180 day treasury notes expiring on October 2 were sold for an average yield of 2.7% and was 4.6 times over-subscribed.

April 1, 2009: $600m tender for 8 year bonds expiring in February 2017 were sold for an average yield of 4.28% and was 3.7 times over-subscribed.

March 27, 2009: $600m tender for 10 year bonds expiring in June 2019 were sold for an average yield of 4.55% and was 3 times over-subscribed.

March 26, 2009: $600m of short-dated treasury notes issued.

March 25, 2009: $601m tender for 6 year bonds expiring in June 2014 were sold for an average yield of 3.98% and was 2.7 times over-subscribed.

March 20, 2009: $500m tender for 12 year bonds expiring in May 2021 were sold for an average yield of 4.42% and was 2.5 times over-subscribed.

March 19, 2009: $300m tender for 90 and 180 day treasury notes expiring on June 19 were sold for an average yield of 2.66% and was 8.8 times over-subscribed.

March 19, 2009: $300m tender for 180 day treasury notes expiring on September 18 were sold for an average yield of 2.59% and was 6.9 times over-subscribed.

March 18, 2009: $700m tender for 2 year bonds expiring in June 2011 were sold for an average yield of 2.95% and was 4.5 times over-subscribed.

March 13, 2009: $600m tender for 1 year bonds expiring in August 2010 were sold for an average yield of 2.57% and was 2.6 times over-subscribed.

March 12, 2009: $1.1 billion of short-dated treasury notes issued.

March 11, 2009: $600m tender for eight year bonds expiring in February 2017 were sold for an average yield of 4.18% and was 3 times over-subscribed.

March 6, 2009: $600m tender for 5 year Commonwealth bonds expiring in June 2014 were sold for an average yield of 3.71% and was 3.1 times over-subscribed.

March 5, 2009: $1.1 billion of short-dated treasury notes issued.

March 4, 2009: $600m tender for 2 year Commonwealth bonds expiring in April 2012 were sold for an average yield of 3.30% and was 3.9 times over-subscribed.

February 27, 2009: $600m tender for 12 year Commonwealth bonds expiring in May 2021 were sold for an average yield of 4.52% and was 3.9 times over-subscribed.

February 25, 2009: $600m tender for 4 year Commonwealth bonds expiring in May 2013 were sold for an average yield of 3.48% and was 4.1 times over-subscribed.

February 20, 2009: $600m tender for 2 year Commonwealth bonds expiring in June 2011 were sold for an average yield of 2.93% and was 4.4 times over-subscribed.

February 18, 2009: $600m tender for 3 year Commonwealth bonds expiring in April 2012 were sold for an average yield of 2.98% and was 4.8 times over-subscribed.

February 13, 2009: $600m tender for 5 year bonds Commonwealth expiring in June 2014 were sold for an average yield of 3.69% and was 2.9 times over-subscribed.

February 11, 2009: $600m tender for 4 year bonds Commonwealth expiring in May 2013 were sold for an average yield of 3.46% and was 2.6 times over-subscribed.

February 6, 2009: $600m tender for 6 year bonds Commonwealth expiring in April 2015 were sold for an average yield of 3.91% and was 2.6 times over-subscribed.

It will be interesting to see what precise detail we get on the future borrowing requirements in tonight's budget.

Latest radio interviews

The best way to listen to our regular radio interviews is to sign up for video and audio podcasts.

The past week has included the following:

720 ABC Perth - about the newly appointed Telstra CEO.

774 ABC Melbourne - with Lindy Burns about the 2009 Federal and State budgets.

702 ABC Sydney: Friday, May 1 with Deborah Cameron discussing the Macquarie Bank results.

Also, check out these special packages for our other regular media spots.

Cornwall cartoons for The Mayne Report

Mayne Report video blog

Friday May 1, appeared on Sky Business View discussing the massive pay cuts at Macquarie, interest rates, bank fees, debt and other topics from the world of finance. You can also view this historical catalogue of our appearances on Sky Business View.

The Mayne Report Rich List

Since we began compiling the Mayne Report Rich List documenting every Australian currently or previously worth more then $10 million, it has grown in numbers and popularity such that no other feature on the website can match it for traffic.

We're now up to 1332 entries, although some are italicised, denoting that they are no longer worth more than our $10 million cut off. Here are our latest entries:

Lee Robinson: an ex-pat living in London and owner of fund manager Trafalgar Asset Managers which sold a 20 per cent stake to investment bank Goldman Sachs making him worth more than $120 million.

Richard Farleigh:
an ex-pat Aussie living in London, he is chairman of Oxonica and a major shareholder with a 20 per cent holding. He also is well known in the UK for his appearances on the Dragons' Den, a TV program on which a panel of investors berates would-be entrepreneurs.

Lionel Krongold - former owner of KH Stramit Limited, one of Australia's largest steel manufacturing companies, and now executive chairman of the Krongold Group of Companies, a privately owned Melbourne-based Investment Company. Lionel is a current member of the Epworth Hospital Medical Foundation, a past director of the Essendon Football Club and has served on the boards of various companies both private and public.

Share trades and capital raising profits

With the margin loan still in place and paper losses exceeding $80,000, we have continued to lighten up the portfolio with more sales in the past month, although this is partly motivated by the need for some tax-losses after recent profits from various capital raisings. Check out all the trades so far this year and here's the world's biggest small portfolio as of May 4, 2009 when the portfolio of 635 stocks was worth $76,478. The paper loss is down to $85,887 and the average holding is a miserable $120.

Trades since last edition:

May 11
Summit Resources: sold 130 at $1.73c
Silex Systems: sold 37 at $6.38
Skilled Group: sold 92 at $1.42
Stockland stapled: sold 54 at $3.14
Mirabela Nickel: sold 224 at $1.55
Patties Foods: sold 270 at 72c
Magellan: sold 510 at 56c
Lion Selection: sold 270 at 97c

May 8
Ironclad Mining:
sold 475 at 28c
ING Real Estate: sold 597 at 16c
Industrea: sold 737 at 24c
Heemskirk: sold 250 at 57c
Gryphon Minerals: sold 731 at 27.5c
Guinness Peat: sold 292 at 61c
Ferraus: sold 348 at 32c
FKP Property: sold 73 at 84.5c
Energy Metals: sold 132 at $1.66
Coote Industrial: sold 299 at 32c
Ceramic Fuels: sold 12,962 at 7.8c
Bannerman Resources: sold 157 at $1.01
Aevum: sold 194 at 87c
Ask Funding: sold 742 at 20c
Allied Brands: sold 868 at 15c
Peet: sold 7,000 at $1.42c
Peet: sold 15,000 at $1.43
Marion Energy: sold 520 at 36.5c
Platina Resources: sold 190 at $1
Every Day Mine: sold 100,000 at 4c

May 7

Crane Group: sold 1,023 at $9.55

May 6
Dart Mining:
sold 17,565 at 5c
sold 261,000 at 9.4c

May 5
Lend Lease: sold 20 at $7.14
James Hardie: sold 50 at $5.02
Clime Capital: sold 200 at $1.25
Hill End: sold 80 at $1.92
Henderson Group: sold 104 at $1.92
Goodman Group: sold 80 at 40c
Goodman Fileder: sold 200 at $1.18
GBST Holdings: sold 270 at 85c
Elders hybrid: sold 5 at $34.50
Duet: sold 275 at $1.57
Australian United: sold 50 at $5.40

May 1
Diversified United Investments: sold 5000 at $2.30

Capital raising profits growing nicely

Playing the angles on capital raisings remains the one thing which is keeping the portfolio in reasonable shape at the moment and we've certainly just had a tidy few days.

The purple patch since the last edition started with the $10,000 Diversified United Investments share purchase plan at $2 a share. This worked well as we exicted on the first possible day, May 5, at $2.30, generating a profit of $1500.

The next day was better after we received an allocation of 261,000 shares at 7c each in drug researcher Avexa and exited on May 6 for 9.4c, generating a gross profit of about $6200, before profit share with financiers.

The Crane Group share purchase plan was only scaled back by 20% so the $9000 outlay aimed at the $7.50 a share offer ended up generating a profit of about $2000 as we got out at $9.56 on May 7.

Last Friday capped off an excellent week with the entitlement offer by property developer Peet Ltd. Stockmarket doyen and AFIC chairman Bruce Teele was talking up this outfit last year, so we rustled up $25,000 for the $1.10-a-share capital raising and got the lot, selling out straight away on Friday at an average $1.427 a share, generating a gross profit of about $7200, some of which was shared with relatives-turned-financiers.

The pipeline of future share offers is very busy and we've already put some money down on Onesteel, Ramelius Resources, Axa Asia Pacific Holdings, Mineral Deposits and Fletcher Building.

The AXA AGM last Wednesday produced some good news when they announced there was no scale back of the $10,000 share purchase plan for applicants, so if the current price holds that will be a gain of more than $5000.

Similarly, Macquarie Group has taken advantage of the new laws allowing SPPs of up to $15,000 and as the proud owner of a solitary share in the Millionaires Factory, the $26.60 offer that is coming is currently in the money by about $5000, if the stock holds at $35.50 and there is no scale back.

Other capital raisings that are in the pipeline for the world's biggest small portfolio include Alumina, Devine, Bluescope Steel, STW Holdings, Horizon Oil, GUD, Adelaide Brighton, SP Ausnet, Pacific Brands, Santos, Sky City Casino, Aristocrat Leisure, GPT, Dyesol, Seek and UXC.

Managing the paperwork, financing and timing of all these offers has been taking up about 20 hours a week of late, but the return has been strong as we've recovered about $50,000 of the net $120,000 that we'd dropped when things were at their worst.

This doesn't mean we're out of the woods given the credit cards have been maxed out to finance some of these plays, but the dire position of late last year has receded and we've been able to start flying around the country again for AGMs. Who knows, if the current run continues we'll be able to afford the bi-annual trip to New York in October for a showdown with Rupert Murdoch.

Macquarie, mavericks and other press room action

We've spent plenty of time re-arranging the press room so check it out here. This article about maverick journalists was written by RMIT journalist student Timothy Wetherell in April, so we promised to give it a run. Also, check out these special packages for our other regular media spots.

We're overdue to produce another piece for Fairfax's www.businessday.com.au site and the last effort on Macquarie's huge pay cuts generated almost 100,000 page views, making it the most popular business story on the site for May 1.

There was also a chat with ABC Brisbane that we didn't capture last week where we confirmed that our attempts to buy back into the stock was rejected because we hadn't signed the CommSec authorisation form now required for partly paid securities. The horse might have bolted but Mayne Report readers were certainly given plenty of early warning about BrisConnections...

That's all for now, thanks for getting to the bottom and do send through some feedback to stephen@maynereport.com.

We'll be back in touch next week.

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.