Moody Memphis, and anyone else with balls of steel. The real...

Moody Memphis,
and anyone else with balls of steel.
The real thing shareholders can do is up their holdings for the vote and be prepared to lose it all or make a killing,when the alternatives arrive.
An EGM and tipping the board leaves a boat without any crew,unless you have a MD and competent steel industry board sitting to one side to take over.BSL would love to see Whyalla shut down and out of the local market and collect the Profit making ARC furnaces and down stream plant for peanuts.
Do the reality thing.
Bankers don't want to lose their investment and take 50c upfront,but will if they have no choice.
That will come down to Shareholders Vote and bankers providing solvency-leniency in repayment terms
OR a stock facility of $500m.which will occur anyway,before or after this deal,with existing or new control.
Someone wrote that agreement very carefully -obtaining the $500m facility doesn't null the agreements non-negotiation plan,but does leave the bankers their easy out - Supply facility -knowing it provides sufficient leeway to restructure and also meet 2017 repayments without killing the company now.
I can just about hear the bankers thinking.-restructured ARI with new owner,we'd still lend them $500m against steel stock in the yard with near the same board.
Do the current boards LEADERSHIPS actions to restructure the company and costs justify the lifeline upfront to the existing debt structure with over $200m worth of costs being reduced or in the pipeline?
$200m cost exit adds $2Bn to the market value of the businesses concerned from where we are now and may lead to some write-ups.

ARI if liquidated might give them 55-60c with no value from tax losses available on any sales.
ARI's 2-3bn tax losses are worth $2-300m when steel/mining makes a profit.-no different than Alinta's a few years ago - hence the deal done to get the shares rather than just the business assets of Alinta.Steel WILL make profits after restructuring without a doubt.
Tax payments come before debt in any liquidation as do employee pensions and wages/holidays outstanding.

Listening to Mr J Maycock at the AGM answering questions,leaves me in no doubt -He's got balls.
Did the unpalatable and said up front(in my words) -
Debt is too large - we need to Cut Debt - a nod to lenders worries.
We need to value our business to give lenders confidence and liquidate what we can at book or above value to reduce debt.
Losses are unacceptable - make businesses cut their cloth to fit their clothes -cut costs -OR EXIT.
Their book value is nothing if they are not making money-we need to make money
Steel is a mess - board member steel --- GONE very publicly.
However you look at this play-out.
The board and Mr J.Maycock are doing what any liquidator would be doing with the same force of inevitability as to outcome,while at the same time preserving other assets that add business value to ARI.
I suspect this is Mr.Maycock showing his true skill at making a business survive-Ruthless Bluntness.
"The James Family" runs on the smell of an oily rag and may give you some insight on continual survival doing good works assisted by Mr Maycock.
Much like Churchill and the Battle of Britain - no-one ever gave them beyond a week to survive.
6 weeks later -when the dust settled the world was a very different place.
In 6 weeks from the 6 monthly ARI will have reduced business costs,received Industry protection and additional increased sales and profits from reduced now unpatriotic imports,cash flowing in from most if not all operations in its sight and be in a very different place as far as business value goes.
Accepting the surrender offer from the Blackstone WILL NOT be in the best interests of shareholders,
Or their lenders.
WHY do I think this way.
Many years ago I was fortunate to take specialist classes held by one of My countries foremost liquidators.
Beyond the specific course matter over the year much dealt with avoiding the hidden pitfalls of Business ownership and avoiding hidden debt liabilities and the way a liquidator addresses a business when appointed.- and believe me it's all about stopping any cash bleedout -Immediately.
That's why such a quick clean out of Metalcentres.
It has saved me considerable money since and forever changed my view of any" friendly" business relationship between Supplier ,Customer ,Owner,Employees,Unions and Bankers.
Mr Maycock has very publicly placed ARI in a "we'll do it ourselves situation"in the hope of saving the business as a whole situation.Can't get much blunter to those who think they can sit on the sidelines ignoring the OTHER OPTIONS,thinking their life can go on obliviously to ARI's well being.

as always DYOR + DYODD every $10m saved is $100m added ARI equity and business value.