another 2 days, page-6

Yes - I think you're right glenso. Probably a little bit more than a "coincidence" that Growers with loans must reply by the 26th of Feb with their indication as to whether they will pay out their loans or possibly be sold to a third party (with the possibility of exit fees). I would say they have had an offer for the loan book, but it is likely to be substantially less than 100c in the dollar. Much better for the balance sheet to get 100c in the dollar from investors that have the ability to refinance.

Others would have investors believe that all is lost. If I hear the words "Ponzi Scheme" again I think I'll scream. For the uninitiated, such a scheme is an operation that pays returns to separate investors from their own money or money paid by subsequent investors, rather than from any actual profit earned. To my knowledge, FEA has never paid investor returns from new investor money (although I understand other MIS operators who are no longer with us may have "topeed up" past returns). Yes MIS (which is a part - not all - of FEA's business) relies on new money being raised each year. But I will ask one thing, how many business would survive today, if they had no new customers or did no new business for 12 months? Almost every business relies on new business to grow and survive.

No doubt FEA and maybe other forestry companies are in a precarious position. Being in a debt covenant breach puts all the power with the financiers. We have seen this time and time again over the last 2 years with many companies from many sectors. My hunch (and hope for the industry) is that they can ride this out. Hopefully the Mill and forest products figures are improved for 1st half 2010.

As far as MIS goes, I know FEA in particular have been working hard on their 2010 offering with investor security the no. 1 priority via the use of a new custodian arrangement. I suppose this begs the question, "why did they not do it sooner?".