What is interesting is whether CSR will keep, unload or increase its joint venture interest in the Tomago aluminium smelter.
The present effective 25% interest, if properly managed, is a consistent cash flow generator for the company. The EBIT from this undertaking last financial year was $112 million, representing over half of CSR's total EBIT.
On the other hand, the Tomago asset is valued at about $A 1.05 billion; CSR's portion being about $262 million (@25%). If the company realised its interest, where would the proceeds be reinvested to get a better return?
There is also another option. It might be able to increase its stake in the smelter for a significanlyt discounted price.
These alternatives require careful analysis.
CSR Price at posting:
$2.43 Sentiment: Hold Disclosure: Held
