Fair value, page-5

Looking at what we know and how the market is weighing up Arrium Limited current value.

On 12th September 2014 ARI share price closed at 0.65 cents x by the number of shares on issue approximately *1366 million = 888 million market cap.

*Taken from the Financial Report release on 19 August 2014

The announcement by the board took most share holders by shock and burn followed.

With the TERP being calculated by UBS with all hands on deck, the board releases to the market an Equity raising of $754 million dollars to reduce the long term loan. New shares priced at 0.48 cents each.

After this was announced, and the shares opened from its trading halt, the amazing sell to exit has now been in full swing.

So now the games begin, and I for one am watching how this plays out. The timing is not good as the iron ore price fell below $80.

Between trading on Monday and the close of trading on the 8 October 2014, cannot wait to see whether the market will push up the shares to the issue price of 0.48 cents.

My financial numbers from the information we have:
As of 16 Oct 2014
Outstanding shares 1366 + Equity raising $754million / 0.48 = 1570 = 2936 million shares X by current share price 0.375 = $1101 million market cap.

So, market cap on 12 th Sept 2014 was $888 at current price is $1101 if the share price get to 0.48 cents = $1410

Happy Trading.