AEJ redbank energy limited

Ann: Change in substantial holding , page-11

  1. 69 Posts.
    Fitnfam

    I agree with you.

    The 2010 accounts showed net cash (ie EBITDA less interest) coming in at approximately $65m. I can only assume the business has performed better this current year.

    A 10c per share offer equates to $80.7m for all the equity giving the banks control and a payback of less than a year and a half.

    The directors didn't tell us what the other offers were for the total buyout as I assume the equity holders got a better deal than what the bankers did. The directors stated that this is the better deal because all the debts would be paid off. What they didn't say was that over 40% of the debt was bought by the bankers for less than 80% of what is outstanding so the bankers are walking away with a minimum profit of 20% with a seven fold upside on a relisting after 5 years.

    This is very similar to the deal that occured with Pasminco where the equity holders got nothing and the banks then relisted pasminco (as a different business) and made a fortune. Pasminco was a different story in that the business did go broke where Alinta is still generating cash.

    I would also like to know why Guiness Peat would be interested in holding the remaining listed vehicle that the directors are saying has no value. Unless it really has value and GP want to buy it for nothing.

    I also vote my 1% a big fat NO! I believe if AEJ is generating $65m pa after interest then the value needs to be closer to a 3 year payback or 25cents. (which I suspect other parties had offered the directors)
 
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