the rock of gibraltar, page-22

interesting points bongo, but i'm not sure i agree with you.

the aussie debt has been restructured, the european debt is off balance sheet and non-recourse, and gearing is a modest 43%.

valad has $100m in the bank that can be utilised to prevent any breach of aussie debt covenants.

as for mccabe debt, well a deal has been struck. either he gets his shares for 10c, or if he doesn't then the interest is capitalised until 2012. so we have certainty on that front.

i don't agree valad is in a precarious position. mdt is precarious. valad has been stabilised and is in a good position imo. the fact is valad moved quickly to reduce debt via asset sales rather than heavily dilutive rights issues like gmg, gpt.

if she goes to 30-40c then i wouldn't rule out a rights issue, but there is no need to raise equity at these prices. all this talk about a spp at 10c is misguided imo.

her current market cap is $200m which puts her on a p/e of 10x with $20m in NPAT. that is entirely reasonable and imo there is plenty of upside.

i'm sticking with my 20-25c call price target over the next 2 months.