But when major short term risks pop up then the focus should be on the short term. In this case QIN does not have the cash to meet the short term outflows and has stopped plantation sales, a great source of cash (if and when the investor pays). Until there is a solution to that rather big problem ,the value of the assets and there potential future value is benign as they may not be in the current shareholders hands.
Then there is the much talked about debt for equity swap. Assuming half the debt is swapped using a share price of 40c that would mean an additional ~400mil shares would be issued, doubling the current number in issue and placing control in the hands of the debt holders.
There is no short term saving grace from selling the plantations that QIN recently "repossessed" as a result of an investor not paying. Why would anybody buy them. If QIN are not able to pay their accounts how will they be able to manage your newly purchased investment. Not the type of risk I want to take on especially in the position QIN currently finds itself.
I'm afraid the only return on this gamble will possibly come from a takeover offer which unfortunately will only benefit those late to the train wreck as I imagine any offer between 80c-$1 would be welcomed with open arms.
QIN Price at posting:
29.5¢ Sentiment: None Disclosure: Not Held
