eldpa, page-5

From prospectus and announcements around the prospectus.

In summary, Elders are expected to have an annual interest bill of $26m after the sale of ITC . They are forecasting an EBIT of 84 for 2010, and a doubling of margins as they restructure the business - so EBIT moving to (say) $164m as a forecast for further ahead. Banks will lend to them at an EBIT of 2 times interest (even at 1.5 times with some arm twisting). (I'm taking $164m EBIT to be what management is truly aiming at, so that they will look good).

Also somewhere it mentions gearing of 14% once you exclude borrowings securitised against receivables (typical habit in a annually cyclical ag co) - not sure where this figure comes from. My numbers would strip out receivables to get assets after receivables ($770m) of $2b, give or take $500m, with $200 net debt against (not sure but max of 13% here).

Ag has good years and bad years, but the lenders will look through that in bad years. They could go under, but does not look likely.

Have a look at the prospectus and accompanying Anns for yourself - don't rely on my quick sums!