It is interesting that the price rallied going into this trading halt, making the market feel that perhaps an answer has been found.
However, having been over the accounts, would have to think that a positive outcome was closer to 50:50. It is possible that the rally was triggered more as a negotiating move than out of real optimism.
Re selling the NZ vineyards, they would be doing well if they could sell at current value. Although Delegats might well want to secure supply, you would have to think they would have their hands full financing their Oyster Bay bid. In addition, if the price they are offering to Oyster Bay holders is indicative (apparently equivalent to about $50,000 - $60,000/hectare for Malborough land), then would suspect any offer to CWT would also be below current fair values. This is unlikely to help very much other than possibly to pay down the immediately due bank loan, but further worsen the security for the remaining debt.
For cap raising, perhaps the equivalent of a 2:1 at 15cps would work if fully underwritten, but NTA would be down to 21cps before any further decrease in valuations, so doesn't exactly suggest a lot of short term upside.
I am interested in CWT, but risk is too high until the solution/dilution has been established.
CWT Price at posting:
19.0¢ Sentiment: None Disclosure: Not Held
