IFN Valuation, page-6

Thanks to all for doing their sums.

A couple of other matters not considered by posters are:

1. Refinancing. IFN has expensive debt, reflecting the very bad ownership structures of the former US assets. It still has multi-currency borrowings though Oz-only assets. and hedging is very costly. I expect refinancing once the banksters are satisfied it is a clean business and substantial cost cuts and cash flow advantages will emerge in interest and hedge expenses. This may also allow new projects to proceed - all at a usefully lower rate of interest. The Clean Energy Finance Corporation will be a key player in this.

2. Development. Bodangora and Forsayth are both 50% interests and require no further financial commitment by IFN. Manildra is similarly advantaged. So Cherry Tree, Flyers Creek and Woakwine are probably more do-able than anyone realises. IFN will be a substantially different business in 2-3 years time.

The rear-guard action by fossil-fuel generators to extract the last few dollars from these stranded assets will soon be exposed. Expect then a resurgence of interest and investment in low-cost renewables.

This will benefit solar and wind. I regard solar as less attractive as production must compete on identical terms with all that roof-top solar installed for non-economic reasons. Large-scale wind is where capital can be fruitfully employed.

Ash