Ann: Rural Services Trading Update , page-45

No need for either to get wiped out, wookie. The ELDPA's are on market for $34.80. Taking a haircut from $100, if CBA is correct in their analysis, means people could still nearly double their money. Ok, so the markets aren't like that, and if it were a real possibility, the market would drive ELDPA's well over the current price. Is it possible for ELDPA's to get $100? Not likely. Of course ELDPA's would compromise. ELD has $295m debt, plus say $100m discounted hybrid debt (see it as debt forgiveness if you like). So, $395m all up debt. Are Futuris and Rural Services not worth that amount? Some left over, maybe, and that goesto equity holders. People can use the CBA analysis, but it could be outdated. Actually, there is less debt with the sandalwood assets being sold and ELD getting $21m cash. The company is also paying off debt as it goes about its business.

ELD is not like PPX/PXUPA, for example. The ACCC has been doing some testing to assess the impact of RHL taking over Rural Services, so it's almost a foregone conclusion that this will happen- or why would the ACCC waste time and money doing this? PPX, on the other hand, may have solvency issues, whereby one can see hybrid and equity holders in competition. There need be no competition in this case for ELD, because *both* will get a return. RHL want Rural Services. They *need* Rural Services.

ELD has said once they pay off debt, they can see about paying the ELPDA distribution around June. Fully franked, it could be a nice gift. These ELDPA's are still reasonably priced, so why would anyone not take a discount to $100 when they can be bought on market for so much less? The market knows it, too, and that's why they have volume. They may go cheaper, as the ELD shares go cheaper, but if it all goes to plan, money will be made here.