Hi again,GPT NTA did not drop 50% in one day. That is...

Hi again,

GPT NTA did not drop 50% in one day. That is untrue.

Maths can be deceiving, and we need to be careful. Yes, GPT did a 1-1 issue but that does not have the effect of halving the NTA when the the share price is trading at a big discount to NTA.

To illustrate this in simple terms, consider this hypothetical example.

COMPANY "A" has NTA of 100c per share (could be GPT or GMG even). Lets assume (in simple terms), Total Assets of $2b LESS Liabilities of $1b = Net Assets of $1b.

Shares on Issue 1,000,000,000

= the 100c NTA

Last Trade Share Price: 45c (discount to NTA)

COMPANY A does 1:1 placement at (say) 30c to raise $500,000,000.

Shares on Issue now becomes 2,000,000,000

Total Assets go from $2b to $2.5b after the cash raised goes on to balance sheet LESS the Liabilities of $1b

LEAVES Net Tangible Assets of $1.5b

$1.5b divided by shares on issue (now 2b) means NTA is 75c.

So, 1:1 placement DOES NOT dilute NTA 50%...not by a long way.

This placement will be positive for GPT long term if indeed markets are stabilising.

It will be the same for GMG.

Regards

Coop
PS: Happy to be corrected, but I think I have got this right