Tricon Man Says He Had `had Enough Of Bond'
The Age
Friday November 8, 1991
A former Tricontinental director said yesterday that the last chance to be free of Mr Alan Bond as a borrower was lost in late 1988 when the board agreed to refinance a $100 million loan.
Mr Jack Ryan, the one director who opposed the refinancing, told the Tricontinental Royal Commission that he ``had had enough of Bond", and that ``the great survivor could fund it somewhere else".
But the other directors approved the refinancing, after meeting Mr Bond at a board lunch on 22 December. Mr Ryan said he found Mr Bond very impressive at the lunch, and the chairman, Mr Neil Smith, asked him later how he felt. ``I said, `Still no'." Tricontinental is set to lose $111 million on the loan, which has not been repaid. Mr Bond is appealing against a decision in the New South Wales Supreme Court that he is liable for a debt of $244 million to his bankers, including Tricontinental, under the personal guarantee he gave for the loan.
Mr Ryan said that the original loan of $100 million was to have been repaid in a float of Bond Media, then a float of Bond International Gold _ both of which yielded much less than expected _ then from a nickel joint venture in Queensland. Instead, the loan was refinanced, with a facility for $US85 million replacing the $100 million loan, which was repaid.
``I just thought it was time. I thought it was going to the well once too often." He said that ``Bondie" had struck troughs throughout his history. ``This time I had the feeling Bond was headed ... I didn't expect him to crash altogether, I thought he was going into a very big slide, and I believed this was our one chance where we might get out." He said he was also concerned about the serious allegations made in England by Lonrho, which, in a bitter takeover battle, said that the Bond group was insolvent.
``It proved to be quite accurate," Mr Ryan said.
He also said that he would not have supported a side agreement reached between Dallhold and Tricontinental's managing director, Mr Ian Johns, that the $100 million loan, which was being extended, would appear on the books to be extended until July 1989 but in reality it was to be repaid by March 1989.
Mr Ryan said he did not recall the side agreement being discussed at the August board meeting, when the extension was approved in principle, but said he would not have approved it, ``particularly with Mr Bond".
``I could understand extending to 31 March if necessary, but I wouldn't have had a bar of the side agreement." Earlier, the former chief executive of Dallhold, Mr Robert Pearce, denied that Tricontinental was the easiest of Dallhold's banks to negotiate with on matters like swapping securities, although Tricontinental was the only bank where that occurred. ``No. Ian Johns was a pretty tough man," he said.
He said Tricontinental's security _ Bond shares which were falling enormously in value _ were replaced by second-ranking mortgages over mining assets, which were far more valuable. He said Mr Johns took some months to agree.
``We had a long, very profitable relationship with Tricontinental at the time. They got their interest paid on time, fees ... it wasn't a one-way thing for Dallhold, I have got to say." Asked about the side agreement, Mr Pearce said he had sought an extension until July 1989, so he could treat the loan as a non-current liability, to ``make the balance sheet appear better".
But Mr Johns wanted the loan repaid by the end of March, and insisted on the side agreement that it be paid then, although the documentation would show the loan was due on 31 July, giving the appearance of a longer extension.
© 1991 The Age