- Tech & Gadgets
- BRW. lounge
Published 14 September 2012 08:06, Updated 17 September 2012 06:03
Like ow – wipeout ... Andrew Forrest’s net worth has been pared from $5.9 billion in May to $3 billion this week. Photo: Gillianne Tedder
Concerns over Fortescue Metal’s Group’s debt financing have wiped hundreds of millions of dollars off BRW Rich lister Andrew Forrest’s fortune.
The latest decline – which has seen Forrest’s net worth whittled from $5.9 billion in May to $3 billion – came after The Australian Financial Review reported that Fortescue has asked lenders to give it financial breathing room by waiving all its debt covenants for the next 12 months.
Investors slashed 14 per cent off Fortescue’s share price on the news, leaving the stock at $2.99 at the end of the day’s trading.
The company – whose share price was over $6 in late March – has more than $10 billion in debt, which has become a cause for concern in some corners of the market after the iron ore spot price plunged 27 per cent since the beginning of July.
Plummeting Iron ore prices have taken a toll on many of Australia’s mining billionaires and Forrest – who owes most of his wealth to his holdings in Fortescue – has had nearly $800 million erased from his personal fortune over the past week alone.
Just as hard hit is Gina Rinehart, whose fortune in May stood at a staggering $29 billion but is now down around the $20 billion mark, threatening her place as the world’s richest woman.
The changing fortunes of the country’s mining elite put billionaires who built fortunes in sectors such as property back in contention for the top spots on the BRW Rich 200 list.
Names such as the Pratt family, the Lowy family and James Packer have seen their fortunes overtaken in recent years by mining magnates thanks to soaring iron ore prices. Now the resources sector is coming back to earth with a thud, these established names might experience a resurgence.
Find out how the resources sector’s changing forces are affecting Australia’s young wealthy elite with the BRW Young Rich, which will be on newsstands and online from September 27.