Meet GrainCorp’s unorthodox bidder
He’s been billed as the former investment banker and fund manager who is leading a $2.4 billion tilt for the Graham Bradley-chaired GrainCorp.
But self-employed financial engineer and big ideas man Chris “Crash” Craddock, 42, is not your archetypal master of the universe.
Margin Call can reveal that the South Australian-born Craddock — this week named as the managing director of GrainCorp bid vehicle Long-Term Asset Partners — has not had a conventional job for almost a decade.
And until earlier this year, Craddock led a peripatetic existence.
The intensely private man has moved from friend’s place to friend’s place for long stretches — mostly in Sydney’s inner east.
Craddock has crashed in the home of stockbrokers and Macquarie execs. He even spent a year or so at a financial journalist’s place.
About three years ago an ex-MacBanker introduced the enigmatic Craddock, who has been conceiving this type of transaction for more than a decade, to former Business Council of Australia president Tony Shepherd, who has become the chairman of Long-Term Asset Partners and is also the chair of Macquarie Specialised Asset Management.
(In a twist for Shepherd, a team from Macquarie Capital — led by David Mustow — is now working for GrainCorp defending the LTAP bid.)
In recent years, Shepherd has taken Craddock — whom he calls “Crash” after the 1950s rockabilly singer Billy “Crash” Craddock (of Boom boom baby fame) — under his wing.
Craddock was a guest at the businessman’s wedding to Maryanne Graham in March (at property developer John Boyd and his young wife Marly’s NSW Southern Highlands retreat; there, Crash had some one-on-one time with former BHP chairman Jac Nasser) and has been regularly attending AFL matches with Shepherd, who chairs the GWS Giants.
And earlier this year, Craddock moved into a rented harbourside apartment in Kirribilli,
almost neighbouring Shepherd’s place.
The GrainCorp board will be interested to know that the unconventional Craddock, who associates all agree is highly intelligent, has no deal-making track record.
Until recently, Craddock has been using his parents’ Queensland address on corporate records.
Contrary to reports, Craddock has not worked at Bell Asset Management, although he did have a short stint many years ago at Bell Potter.
It’s unclear what role, if any, he held at investment bank Deutsche.
His support team on the deal of his life comprises Shepherd and former Aurizon boss Lance Hockridge, who joined the board in June.
It sits alongside Hockridge’s role on the board of controversial Chinese telco Huawei, the only other directorship he’s acquired since leaving listed life in December 2016.
Andrea Staines, a former Aurizon director and Qantas exec, is also on the board. Former GrainCorp exec Nigel Hart is consulting to the bid vehicle.
All are betting their reputations on Craddock’s idea.
The group has this week been operating out of the offices of its lawyers Clayton Utz (a few floors away from former PM Malcolm Turnbull’s temporary Sydney CBD office).
Before that, Craddock had been running things from his laptop at home. The LTAP business is registered to an address linked to a corporate services business high up in Sydney’s MLC Centre.
A risky strategy
Perhaps the reason unlikely deal-maker Craddock and former Business Council of Australia chairman Shepherd are being so cagey about Long-Term Asset Partners’ equity partners is because there might be virtually none.
Goldman Sachs, with Christian Johnson advising the deal team, has committed to providing $3.2bn in bridging finance, while $400 million of debt will come from the Tim Poole-chaired Westbourne Capital. Poole is also chairman at Aurizon, of which LTAP director Hockridge is former MD.
Virtually all of GrainCorp’s equity under LTAP will be replaced with debt, which will have to be serviced.
Insurer Allianz is said to be willing to underwrite the GrainCorp business for 25 years, effectively smoothing out the group’s volatile earnings cycle via the unique derivative or securitisation-style structure created by Craddock so that the massive debt can be serviced even in the bad years.
But the visionary Craddock’s strategy is risky.
If something goes wrong and if there are termination clauses in the finance structure that are triggered (say by profit or volumes), the insurer could pull the plug.
If that happens, it won’t be just lenders and a few shareholders who lose money. There are other stakeholders. Farmers, for example.
That’s something Nationals leader Michael McCormack will want his Coalition partner Scott Morrison’s Liberals to have a look at, when they can spare a minute from their tedious self-reflection.
Leaving his Post
Another departure from Australia Post and this time from the very heart of Christine Holgate’schief executive office.
Margin Call can reveal Jared Newton has resigned from his role running Holgate’s CEO office, a gig she promoted him to only eight months ago.
Before joining Australia Post in 2016, Newton worked for Alan Tudge, a boss with an infamously high turnover rate.
Newton — a horse fiend — is off to head up corporate affairs at the Melbourne Racing Club, now under the management of Josh Blanksby.
Also leaving Australia Post are corporate services exec Chris Blake and his fellow Ahmed Fahour-loyalist Greg Sutherland.
The departures come amid rumblings that life is a little less zen at the national courier this festive season.
Although maybe Holgate’s critics are just jealous they missed out on the junket to Uluru that a team of Australia Post sales execs — and their chief executive — are now on.
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