G'Day Rice,I would suggest that you read everything on this...

G'Day Rice,

I would suggest that you read everything on this thread and the old FCL (FCLPA) thread posted by Watford. He has consistently made the case for the hybrids and I think he has been largely proven correct.

I got out of the ordinaries early this year and ploughed all my dough into the hybrids when they were low 20's - at that time there was a real possibility that they would go belly up - although it was apparent even then the only way forward was going to involve a massive dilution of the ords.

I think the future is secured, although near/mid term performance may be questionable.

The suspension of the divis on the hybrids (and the ords) is keeping the ELDPA price in the $50's. I'm not as confident as Watford in the company choosing to redeem in 2011, it may happen, but I will be more than happy if they just resume paying divi's as planned. The resumption of divvi's rather than Elders going out backwards is the key risk to the price of ELDPA in my opinion.

If you have read the prospectus you will be aware that the hybrids will share 50% in any takeover premium. I think that this will be the likely trigger for redemption and one that will return in excess of the $100 face value of ELDPA. The balance sheet is now in a state that will be attractive (perhaps attractive is too strong - probably better to say not a barrier) to would be suitors, the consolidation is another bit of window dressing for a sale.

All the above is my opinion only - hope it helps you to continue to DYOR.

Cheers
matt

Hold ELDPA only