Forum Archive Index - May 2002

["tonysw" <tonysw@xtra.co.nz>]

Thanx Snoopy
I was really hoping you would take a bite at it, very much appreciated for
your input.
TW
----- Original Message -----
From: <tennyson@caverock.net.nz>
To: <sharechat@sharechat.co.nz>
Sent: Saturday, 25 May 2002 10:00 a.m.
Subject: Re: [sharechat] FFS


> >
> >
> >Can someone give an indication as to what value the shares would be
> >if the latest proposal was successful. Sometime ago a value of near
> >.45c was mooted.
> >
> >
>
> OK, no-one has bitten at this so I'll give it a go.  The question is
> what happens to the underlying share value if the new CITIC $US200m
> cornerstone shareholder deal goes through.
>
> As at December 31st 2001 there were 2,781m shares on issue, being the
> combined total of FFS and FFSA.
>
> Net tangible assets were $1127m
>
> This gives an asset backing of 1127/2781= 40.5c per share.
>
> Of these shares on issue Rubicon owns 17.6% or:
>
> 0.176 x 2,781m = 489m shares.
>
> The new CITIC recapitalisation proposal is to introduce $US200m cash
> (which translates to $NZ444m at $1NZ= 45c(US) ) at 37c per share.
> This will create 1,200m new shares.   The plan is then to buy Rubicon
> out of it's position.
>
> According to FFS chairman, Sir Dryden Spring:
> "We are also progressing with Rubicon, our largest shareholder, as
> part of the overall transaction, the buy-back of most of their 17.6%
> shareholding interest in the Company in return for Rubicon acquiring
> part of our forest estate."
>
> This reads to me as though Rubicon is to be 'bought out' of its
> holding by giving it trees.  So FFS will in effect cancel 489m shares
> while at the same time losing 0.405 x 489m= $198m in trees.  That
> $198m must come off the NTA of the company as I see it.
>
> The result of all this will be 2,781m + 1,200m - 489m= 3492m shares
> on issue.
>
> Net tangible assets will be:
>
> $1,127m + $444m -$198m = $1,373m
>
> So NTA per share will be 1373/3492= 39.3 cents per share.
>
> According to Sir Dryden, CITIC will at this point be the new
> cornerstone shareholder in FFS with 35% shareholding.
>
> According to my figures the percentage of shares that CITIC owns will
> be:
>
> 1,200/3,492 = 34.36%
>
> That isn't too much of a discrepancy, so I'll take it my figures are
> not too far out.
>
> It is from this point that FFS will buy the central North Island
> forest partnership.
>
> Now here is where things get interesting, as how much will FFS offer
> the receivers to get those forests back?   If they have bid low they
> will get a bargain, but will such a bid undermine the values of their
> existing forests and so force them into another big write down of
> their assets?   And what will Rubicon do with $200m in trees, once
> they are decoupled from the Fletcher Forests structure?  Is this a
> good deal for Rubicon?  I don't know.   I'm just posing the
> questions.
>
> SNOOPY
>
> disclosure: No RBC, FFS or FFSAFFSA shares held
>
>
>
>
>
>
>
>
> ---------------------------------
> Message sent by Snoopy
> e-mail  tennyson@caverock.net.nz
> on Pegasus Mail version 2.55
> ----------------------------------
> "Sometimes to see the wood from the trees,
> you have to cut down all the trees."
>
>
>
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