The conditions set by the Federal Treasurer before any Sucrogen...

The conditions set by the Federal Treasurer before any Sucrogen sale proceeds can be returned to shareholders
are sensible safeguards. It will mean, however, payments to more so-called external experts. Nevertheless, these requirements should not deter directors from paying an adequate capital return to members.

CSR management has done a good job in negotiating a fair price for the sugar assets. However, I suspect there is
a real risk the process could continue to be drawn out
by the intervention of other parties, some of whom will be attracted to the large amount of funds potentially available. Possible parties that may interfere with the smooth running of this process include the highly unpopular NSW state government, who might try to politicise the issue prior to an election in an effort
to pointscore with the community, and the devious James Hardie, who is still smarting from its exposed acts
of past bastardry and deceptions involving funding asbestos liabilities. There are also various asbestos compensation groups, spurred on by ambitious lawyers and consultants, who may have something further to say.

Notwithstanding these pressures, in my view, the board should adopt a reasonable approach to ensure satisfactory
outcomes for all stakeholders. Given the Treasurer's conditions, I believe the alternatives for directors to consider when applying proceeds are:-

. returning adequate capital to shareholders (by
direct payment);
. reducing debt to improve capital structure;.
. setting aside funds available for asbestos
claims;
. retaining funds for manageable low-risk bolt-
on acquisitions in the future.

I think about 70% at least of net receipts would be a reasonable allocation to shareholders.




Disclaimer
Please note that I am not providing valuations, advice, information, recommendations or predictions. The above statements are merely my own comments and thoughts as an ordinary shareholder without any special skills or knowledge. I absolutely disclaim any responsibility or liability whatsoever for any consequences arising from the use of my comments and thoughts expressed. If
you require advice or information, you should seek the services of an appropriately qualified independent expert professional person as well as do your own proper research.