ubs says sell fmg buy gbg, page-19

Major

I can see your point & yes its valid.

However if GBG is run into the ground who will pay back the loan (provided we get one)?

If GBG doesn't make money then Ansteel runs the risk of their JV partner pulling out (Who is responsible for 50%). Leaving massive debts & no ore.

You would say - but Ansteel will just buy the mine. No can do. GBG owns 50% & Aust. gov wont let the Chinese have it. Simple.

It's in Ansteel interests to make a profit out of GBG. Instead of thinking hey lets get the ore as cheap as we can & run the company into the ground Ansteel will be saying what ever the IO price we would have had to pay it anyway but now we are get 70% back through JV & ownership of GBG.

GBG Profit means profit for Ansteel. This profit will hopefuly outway the costs of running GBG into the ground.

Either way your point is valid & should be taken into consideration. Therefore we rely on the board members of GBG to have done the best deal for shareholders. Sure we don't know the in's & out's so lets hope that the board has thought of these issues & protected us to the best of their ability. If not then we shouldn't be in GBG