Yes, the only business unit of value (ie desirable) is the water...

Yes, the only business unit of value (ie desirable) is the water management fund. The property fund and the private equity fund are worthless in my opinion.

That opinion is based on the following:

1. The value of the business unit is in the established processes and experience that deliver outcomes.

2. The property business is now exclusively student accommodation and based on my read, they are going to struggle to rent the beds based on projections (a mix of falling property prices, reduce international migration - via student visa pathways, lots of competition being delivered). So given the division won't be achieving outcomes, I fail to see the value. Plus when you have debt in a project, and the valuation drops, your capital erodes pretty quickly.

3. The private equity group made terrible decisions and have an average track record of creating a system to grow, they rely upon the partners - which can be ok, if your good at picking partners, which recent experience shows, they are not. When shoes of prey was clearly dead, they continued to dump more and more BLA money into it, hoping that it would float. It goes to the decision making process and the outcomes.

4. I have real concerns about the trade creditors - from BLA funds. The idea that BLA is owed current creditors $20million (was owed $30million and they wrote off $10million) is a real issue. Thats before you factor in the loans to the entities... You have to assume that these are from the property or private equity departments, the water fund is supposed to be more liquid and should be paying regularly. When you look at the half year report, there were $31.5 million in outstanding current BLA fund creditors at 30 June and $29.8 million at 31 Dec 18 (before write - offs). A reduction on paper by almost 2million - ie they collected almost 2 million (actually $1.7million) plus the reduction in the non-current creditors of 3 million (ie collected). So, Ok, yay, they collected about $5mil from their funds in money owed to them - in 6 months. But the bigger issue is, they wrote off $9 million of it... almost a 3rd of the BLA fund arrears was wiped.

5. Given that the total revenue from management fees for the period was $14million, and 9 million in owed management fees was written off, how many of these funds are failing?

I would argue that the private equity division is a basket case and the only reason they still manage 300million of assets under management is that they are continuing to loan BLA money to failing funds, to keep them alive - hoping that they turn around. That the student accommodation division when construction is finished and operating at "normal" levels will trigger another write down.

So yes, I do not believe that there is any liquidation value left in the business.

Thats not to say that there isn't a silver lining - who knows what the new CEO will do, he could take out the axe and swing it at all of the dodgy product and try and clear the decks, hopefully, keeping Oaktree at bay, the guy is supposed to start work in a week and a half.. But all of that is dependent on Oaktree waiving the requirement for the period.

If - and i do mean if - they get the recurring spending under control, the management business profitable, and quit trying to be too smart, then this business is worth circa 75cents a share, maybe a $1, but there are a lot of moving parts between now and then, just wait then for the next capital raise, of $50million, and if they get that right, and start investing in good ideas, the upwards momentum will begin again.