Let's get everyone's opinions on best and worst case values...

Let's get everyone's opinions on best and worst case values realized in asset sales of Elder's main assets:

- Futuris Auto
- Forestry
- Rural Services

Then let's see where that leads us to ultimate outcomes for common and ELDPA.

My own numbers (very rough research, and I'm hoping others here will create better boundaries):

Futuris: $120M to $165M

Forestry: -$20M to +$20M

Rural Services: $300M to $400M

Let's assume $300M net debt, which seems to be a reasonable target bank debt after the recent asset sales.

Using these parameters as the boundary, let's first consider the best case. In this case we realize $585M in asset sales and subtract $300M of secured bank debt to give us net asset value of $285M. Subtract from that the Hybrids at $145M and you are left with $140M for shareholders. Divide by 449M shares and you have 31 cents to common. That is my *best case* outcome based on the asset sale numbers I present, and it gives full payout to ELDPA.

Now consider the low end numbers I gave. In this case we have $400M realized from asset sales, including in effect our paying $20M negative asset value to someone to have them take the toxic forestry assets off our hands. Subtract the secured bank debt and there is $100M left.

That $100M has to satisfy BOTH ELDPA hybrids and the common holders. If we offer ELDPA 50 cents on the dollar that gives $73M to the hybrids and leaves $28M to common shareholders. Divide by 449M shares and you have only 6 cents per share to common.

Do you think common are going to vote for this deal if they only realize 6 cents per share? Does any ELDPA holder start to appreciate how difficult it will be to keep this out of bankruptcy and get every class affected to vote yes on a deal if the asset sales don't realize good prices?

The point in all of this is we are hanging by a thread here. It was absolutely critical to realizing a value over 30 cents for common that we get good prices for the asset sales. I think the banks forcing Elder's hands significantly weakens their negotiating position, and it will certainly worsen the price paid for these assets.

Based on this exercise I have gone from bull to bear on common shares, and I would need to see them around 10 cents to make it worth speculation. The hybrids are more interesting and might be worth a shake at 30 cents.

What would be very constructive here would be for others to present their estimates for the low and high values for each of the three assets, and their reasons for those values. Everything else falls into place from the values realized in those sales.