Ann: Target's Statement and Independent Expert's Report, page-175

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auro

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21/07/18

10:13

Post #: 34491861
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Originally posted by HamburgerK ↑

DYOR:
I have now changed my posting as I now think best way to explain is:

Normally:
$100 profit -$30 tax = $70 NPAT

Using tax credits:
$100 profit -$100 tax credits = $0 NPAT, i.e. no tax payable.

So using $100 tax credits gives you $30 back in your pocket.

So my revised statement is:
($1.4b carried forward tax losses x 0.3)/(9.5b shares) = 4.4cps
What about all the other valued assets?
How is that fair?

Refer to page 109 in the appendix of the the following:
"Target's Statement" report.
"Taxation
As at 31 May 2018, Atlas Iron has approximately $1.4 billion of carried forward tax losses. BDO Corporate Tax (WA) Pty Ltd has assisted us in assessing Atlas Iron’s ability to utilise these tax losses as at 30 June 2017 and has concluded that the losses can be used against future profits. Therefore, based on the forecast cash flows included in the Adjusted Atlas Model, Atlas Iron has an effective tax rate of 0% over the forecast period.
Given the nature of the continuity of ownership test, Atlas Iron’s ability to utilise carried forward tax losses must be assessed at each reporting date, therefore there is a risk that this may change. However, given the tax advice obtained for the most recent tax period, we consider that we have reasonable grounds to assume this assumption will hold over the forecast period."

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So we're looking at 6.5c per share as fair value (2.1 fair valuation of assets from report plus 4.4 tax losses to be carried forward).

There remains a question if the port could be used by HPPL/FMG after acquisition which you would think no based on Government statements.

HPPL/FMG may not want to spend 6.5cps to then lose port access so may instead be happy with control of the board with combined 50.1% do Atlas remains listed and port access remains available to them?

Last edited by auro: 21/07/18

AGO Price at posting: 4.2¢ Sentiment: None Disclosure: Not Held
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