Ann: Decmil Capital Raising , page-2

In summary, poor decision. DCG is now looking to expand into property ownership. They have paid $40m for a 50% share to become a property owner, with the only objective of securing a build $80m contract (ie CBA funding is the only cash return on this investment up-front). A number of questions to be answered:

- what is the end value of the development;
- what does the $40m acquisition price represent per existing room plus the DA approved development (at 50% ownership) - this is excessive;
- what is the exit strategy;
- the basic cashflows are: CBA funding $80m (the rest is funded by DCG) and management/rental income (what are the projected numbers);
- I see this as a loss leader to secure other projects as I don't see them making a satisfactory return on this project;
- DCG tell us that the impact of the investment will be "significantly EPS accretive", but do not actually tell us the numbers;
- "Short pay back period" - what is the period?;
- $46m mezz finance - at what rate, terms.

I had been seeling around the $2.25 mark and I have only a small shareholding left. This is now a good reason to sell the rest.

Poor..poor..poor.