new debt officer, page-2

Spoke to the trustee today for clarification . The reason they now feel they can do something is the fact the deferred margin is becomming a substantial proprotion of the total debt. ($40m out of $140m)and as it earns no interest the overall return to the noteholders is becoming very low, so they are more likely to negociate and take some kind of a haircut on the deferred margin. Coupled with this is the difficult conditions of disposal that are currently in place . If they can come to an agreement with the noteholders they will probably sell off more assets and payout the entire debt and not refiance at all. This would leave any remaining assets and income derived from them ours.

If they are unable to strike a good deal with the noteholders then there is no point refinancing, as you could not get a better deal than we have at present. Remember only $100m of the $140m attracts interest. Yes the $100m is at a high rate but when you average it out is very low. On top of this all future repayments will reduce the $100m not the $40m So the further we go the lower the rate of return and the cheaper the fianance becomes for us.

Any new financier would naturally want interest on the entire balance.

There will probably be another $20m to $30m repaid this calander year . so the average rate would get even lower.

just my view . do your own research