Australia's 'Golden Boy' Faces Bankruptcy
AFTER he won the America's Cup in 1983, Alan Bond became the "golden boy" of Australia. With what seemed like a Midas touch, Mr. Bond built an empire based on brewing, mining, media, and property. Now, Bondy - as he is known - is facing bankruptcy.Justice Andrew Rogers of the New South Wales Supreme Court, decided Sept. 23 that Bond must honor a personal guarantee on a $195 million loan. The banks forcing Bond's hand immediately asked to have a trustee named to manage Bond's financial affairs. "It will take him a while to bounce back from this," says Francis Douglas, the lawyer for the Hong Kong Bank of Australia, one of the banks seeking to enforce the guarantee. Bond is appealing the decision. In court Sept. 23, however, he admitted he had only $50,000 in his bank account and had an income of $8,000 per month as a consultant. If Bond is forced into bankruptcy, the action may close a chapter on one of Australia's most colorful entrepreneurs. "Alan Bond captures and projects the essence, the very spirit of 1980s Australia: our Alice-in-Wonderland age," writes Terry McCrann in the forward to "Bond," a biography. Bond was proof that almost anything was possible in Australia. He started as an ambitious sign-painter in Freemantle, Western Australia and became one of the country's most wealthy men. And he was catapulted into international fame after he bankrolled Australia II, a 12-meter yacht that took the America's Cup away from the New York Yacht Club for the first time in 132 years. Fame gave Bond instant access to money. "The banks were hurling wheelbarrows of money to Alan Bond without asking 'Where is your cash-flow statement says Joshua Owen, director of the Institute of Administration at the University of New South Wales. With the money, Bond went on a buying spree. In 1983 Bond Corporation had revenues of $309 million (Australian: US$242 million). By 1989 Bond Corp.'s revenues were $7.6 billion. Bond owned a media empire, the second-largest brewery in Australia and the fourth-largest brewery in the United States, large oil and gas interests, some choice Australia and Hong Kong real estate, the St. Moritz hotel in New York, half of Bond University in Queensland, gold mines, and the Chilean telephone company. The acquisitions piled up debt. In 1987, Bond owed $1.2 billion. By 1989 the debt load had swelled to $8.23 billion. By 1990 the interest payments and the devalued Australian dollar, combined with a recession and the sale of many of the assets below cost, resulted in a loss of $1.565 billion, a record for Australia. On top of his debt problems, Bond is under investigation by the Australian Securities Commission for possible breaches of corporate law. A spokeswoman for the Commission says the investigation is "enormously complex" and has been going on "for some time." Although Bond himself has few assets, his wife and children are well taken care of by various family trusts which cannot be seized by the banks.