Re-hashing my post 11th March. True to form the petulant approach of mgmt./board was predictable & hence ensuing outcome:
"The clock is ticking & it appears Arrium is 3 weeks away from its ultimate demise. Per the 'business update' from the esteemed Mr Roberts, nothing has changed since the earning announcement & the GSO offer remains the only viable alternative in keeping Arrium afloat (i.e. wipe out shareholders, lenders & ultimately employees once Blackstone churn & burn).
Yet again another classic communique from the IR team with ambiguities, vagaries & repetition (albeit at least they communicated something).
Whilst lenders will likely reject the GSO deal, am certain they will get the liquidators in to obtain a better payback outcome. Any hope of lender goodwill (i.e. extending loan maturities, interest free amnesties) was destroyed by the petulant & amateurish behaviour of management. Only other viable alternative is for another suitor to put in an 11th hr bid for Molycop which may have been the brinkmanship plan from the board to force all the players hand for a better outcome (which may account for the bizarre approach over recent weeks). However clearly that strategy (if indeed that was the intent) clearly not working with government, workers, potential suitors & likely lenders not taking the bait.
Why is that we never knew what the various bids were for Molycop?..media speculate it was 1.1 billion, was it perhaps more? who is to make the decision what hurdle to accept the bid?...selling the asset (albeit at lower multiple) would still provide some breathing space in paying large chunk of debt & allow the company a chance to turnaround the other divisions. Whilst challenging & perhaps instigating a slow death, certainly better than the GSO deal!
The management arrogantly demand paycuts from workers, yet have taken no significant paycuts & true to form provide no coherent plan or specific background/outcomes of the strategic review - workers had every right to be suspicious and demand more details.
What was potentially a salvageable situation 12 months ago has quickly descended into an absolute farce at shareholder & lenders expense. Management & board have absolutely squandered this once great company and bought it to its knees with complacency, indecision & recent indifference/disdain for its key stakeholders. As one poster rightfully described, the mere fact we are rooting for the lenders and not management speaks volumes!
Only winners out of this = Lazards, UBS & PE firms who will pilfer the cheap assets once liquidated.
ASIC should be called to conduct full review on the sequence of events, director minutes etc as to how events have transpired. Have no doubt much will be uncovered".
ARI Price at posting:
2.2¢ Sentiment: Sell Disclosure: Held
