I just posted this on the ozl threads and mentions...

I just posted this on the ozl threads and mentions CUO....

"....the problem if the banks refinance or even if they raise $1bn through a placement or other form of cap raising is the cash burn. From memory they had about a 1 bn in cash not long ago and now in a net debt position which suggests a high cash burn rate. Prudence by management to reduce cash burn rate? The appointment of administrators in CUO raises the question about directors in numerous listed companies and their collective diligence. We've seen corporate America have no effective regulations and the emerging debt issues and the management of these issues become one of regulation by government to protect shareholders in public companies. Is the current fed government up to the task of reforming company reporting and financial transparency? Probably not.
CUO and OZL are both good companies but the directors seem to have some issues ( to put it politely). The issues could have been addressed some time ago. I attended a function about 6 months ago at which an ANZ manager highlighted the cash restrictions/lending regulation constraints that apply/ and had evolved in Australia and ceo's and directors of public company's in Australia would have been expected to be aware of such fiscal constraints across the banking industry, as part of the responsibility attached to being directors of public companies. What the CUO directors have allowed to occur by leaving it to the last minute to try and refinance with banks instead of other options (like equity partners, asset sales, issue of interest bearing securities and public fund raising etc) escapes logic.
I hope OZL directors are considering more than just refinancing the debt.....there is much more they need to do by the sounds of it. Even with a cap raising at say one for one at a ridiculously low 40c a share isn't going to stop the cash burn is it? And should they be successful with the refinancing this weekend, the directors still have a lot of decisions to make don't they.
What were they discussing at the board meetings six months ago?
I think one of the things the government needs to do is have shareholder representatives present at board meetings. Directors would kick and scream at the thought but it would make for better transparency, accountability and consideration of shareholders sentiment. Leaving the financial management to directors doesn't seem to be working ( it should but it doesn't) so a major review of corporate regulation and associated legislation designed around shareholders is something that needs to happen.
Just a few thoughts .....cheers fatstocks"