That restructure essentially confirms that most of the $775 million in funding AMC organised under pressure in 2001 has been lost, including $400 million of private money, $100 million-plus of Queensland taxpayer funds, $150 million of federal taxpayer funds and $100 million-plus of Newmont shareholders' funds. Then there's the $200 million invested over the previous decade.
AMC shareholders who contributed to the $525 million equity component of the 2001 raising will, however, eventually reclaim $127 million of their investment, $100 million of it from the Queensland Government, which underwrote that amount to enable AMC to pay a dividend. It is the remaining $63 million of that dividend commitment that will be returned to investors over the next 18 months.
The Queensland and federal governments (the Commonwealth underwrote a $100 million subordinated debt facility) went into AMC with their eyes open, albeit bedazzled by the promise of a whole new industry, built on leading edge but commercially unproven CSIRO technology, producing a "space age" metal.
In mid-2001, AMC had failed in an attempt to raise $680 million of equity funding conventionally. It was shunned by international investors, although the attempt revealed significant interest from retail shareholders.
The professional investors' main concern was that AMC was using technology untested at commercial production volumes to produce a metal for which demand was uncertain, despite a contract with Ford to take half the plant's output.
With first production originally not scheduled until 2004, and the plant not achieving its optimum production until 2006, it was also a project that would have no positive cash flow for four years and would not achieve full commercial production for five.
That was where the Queensland Government came up with its oh-so-clever idea of offering investors a dividend from a project that didn't generate any cash or profits.
The Queenslanders guaranteed investors in the scaled-down $525 million raising would receive income during the construction phase.
The dividend bore no relationship to the underlying economics of the Stanwell project - indeed during the period the dividends were to be paid Stanwell was a construction site.
The diversionary device worked. Late in 2001 AMC raised the required funds, supplemented by the federal guarantee and $100 million in new equity from Normandy Mining. Normandy was later acquired by Newmont.
AMC also negotiated $932 million of bank funding. The banks made their funding conditional on some AMC achievements, including that it either had to negotiate a fixed-price construction contract or be able to satisfy the banks it had adequate reserves to cover contingencies.
Earlier this year it became obvious AMC hadn't been able to lock up a fixed-price contract with Leighton, largely because it was already about $200 million (it won't know its exact position until later this month) over budget on construction costs.
So it couldn't access the bank funding to complete the project. Reality forced it to halt the project. The bank facilities were cancelled yesterday.
As its plight emerged, AMC sought more funds from the governments and Newmont, which weren't prepared to send good money after bad. It talked to potential investors around the world, without success.
The lack of interest is revealing, because there is an opportunity to effectively take control of the project and benefit from the massive investments already spent for a relatively modest outlay.
A new investor could capitalise on the wiping out of the existing sponsors, including the shareholders who have effectively lost, it appears, more than 60c of the 80c a share they subscribed (the rest represents the taxpayer-funded dividend payments).
Someone may emerge after Fluor Corp's review - due by month's end - of the cost and time of finishing the project. The restructure buys time to assess its findings and present them to potential investors.
But construction wasn't supposed to be the risky bit. That came later, when the plant's ability to produce at commercial scale and develop profitable markets would be tested.
That viability may remain untested and the Queensland dream/delusion of developing a 21st century industry may never be realised.
