Most likely Molycop will be sold - whether shareholders get...

Most likely Molycop will be sold - whether shareholders get anything back will depend on what it goes for either to a private equity buyer or IPO.

2015/2016 should do A$235 EBITDA (far less than the forecaset A$287 million the board told the market they would get when they were trying to sell it) and with tariffs now in place in Australian part of their operations (and maybe the USA will do the same in the next 3 months or so) they may earn $260 EBITDA in the 2016/2017 year (a 11% p.a  increase).  Assuming it could be sold on a conservative P/E of 8.3 x you have A$2,158 million (it was actually valued in the books at A$2.10 Billion and they paid 9.1 x EBITDA for it in 2009).

This leaves a debt remaining of $642 million.  Remember, the other debts were only relevant in the normal course of business and also if Whyalla and the MBR Iron Ore Mines had to be closed. This is no longer going to happen.

With a lot of the fat cut out of the business and a lean and mean machine now operating, steel and iron ore prices having recovered and A$2 billion of tax losses carried forward, the rest of Arrium to be sold by Morgan Stanley would have to be worth more than $642 million. Only thing to finalize is the EBA for Wyhalla Steelworks and the power generation for the steelworks. The Federal Government and State Government may be able to cough up more funds for this - esp. with Nick Xenophon Team holding balance of power in the Senate. My best get is if it goes for A$900 million you have $258 million. That equates to 8.6 cents per share for shareholders.

Watch this space for Bluescope to potentially make a cash and scrip offer for Arrium - everything is all in place for it to happen now.  And Posco, private equity firms and a Chinese consortium should be in the bidding process to ensure they get the maximum price for creditors (and hopefully something back for shareholders).