During FY08 Gemco Rail acquired a number of locomotives and wagons from various parties for the purpose of rebuild, refurbishment and future sale. In the second half of FY08 a number of locomotives and wagons were refurbished and sold to rolling stock entity Greentrains Pty Ltd. The basis for the sale agreement provided terms for payment, which allowed for the timely inspection, accreditation and acceptance of the locomotives and wagons. Ownership does not pass on these assets until the amounts due are paid in full including any interest charged where applied.
Locomotive Project Revenues due from Greentrains at balance date $82.713m
The Board has provided an extension until the end of October 2008 to enable Greentrains Pty Ltd to complete the events of the transaction. (what does that mean?)
In accordance with the above and considering all other information available to them, the CIL directors believe that it is PROBABLE that the full amount of the receivable will be paid.
CXG Price at posting:
80.4¢ Sentiment: LT Buy Disclosure: Held
