check out the figures, page-6

feeny


I reckon the best way for GPT to create value for us shareholders would be to walk away from the JV should asset values drop 10%

by walking away from the JV GPT will lose $2bn of equity

the balance sheet for GPT would look like this

assets $12 bn
debt $5 bn
equity $7bn

a 10% asset writedown would look like this

assets $10.8 bn
debt $5 bn
equity $5.8 bn

NTA $2.63

Gearing would be 46.2%

If assets fall another 10% or $1.08 bn then do a capital raising

Assets $9.7 bn
Debt $5 bn
Equity $4.7 bn

NTA $2.14
Gearing 51.5%

the banks might allow GPT to go over 1.5% the 50% covenant.

If they don't then do a capital raising

which would look like this

assets $9.7bn
Debt $2.8 bn
Equity $6.9 bn

the number of shares = 4.4bn

NTA $1.57

gearing 29%

If you bought at $2 you'd be in at $1.50 after the 1 for 1 rights issue of a $1

what you'd end up with then is a great REIT with a strong balance sheet and portfolio of fantastic assets such as australia square etc

the rents would amount to $500 m

which would be about .11 a share or 7%

but it would be a 7% you could be sure you'd get.

all the assets would have fallen by 20% by this stage

you may then find a buyer for the whole company who would be prepared to pay a 20 percent premium or $1.88 per share

anyway that is my dream!