BMCC loses millions more.

Tuesday, April 21st, 2009

In the 19 November 2008 edition, the Gazette reported that council had a number of investments with Grange Securities (part of Lehman Brothers) that had their value reduced.

The auditors at that time wrote down the value of the then $25m investment fund by $4.1m. The report also noted some direct investments in sub-prime mortgage CDOs, which it claimed would be repaid at maturity.

Recent reports in the SMH and Age newspapers show that BMCC losses could be much greater. A table from The Age shows that BMCC had $11.3m invested with Grange, and a 20 April 2009 report in the SMH states councils have been offered only 5.6c in the dollar repayment of their capital.

If this figure is accurate, BMCC faces losses of over $10m, or in excess of $800 per ratepayer.

In November, council suggested that these problem investments would come good, but current reports suggest that council may be forced to accept the 5.6c in the dollar payment, throwing the council budget into disarray for years to come.