iba rights issue = $11.4 mill aep profit

Hi guys,

I reckon that the rights issue by IBA could result in a capital gain of $11.4 million for AEP based on current IBA share price and assuming that AEP also takes up convertible notes rights.

Does this calc look right?

AEP holds 204.4 mill IBA Shares = 58.4 mill rights @ .55c = cap gain of $8.17 mill at IBA share price of .69c (note this price is ex rights entitlement)

Warrants 1.28 mill - no additional rights

Convertible notes 45.97 mill = 13.1 mill rights @ .55c = cap gain of $1.8 mill

Convertible notes convert to 1.157 ord shares = additional ord shares converted from the 13.1 mill rights = 2.06 mill FREE ordinary IBA shares = cap gain of $1.4 mill @ .69c share price.

THUS - AEP benefits to the tune of $11.4 million in capital gains for a total cash cost of $39.3 million.

Proceeds of rights issue to IBA used (amongst other things) to repay loan from AEP - Thus AEP receives $60 mill in cash + accrued interest. Overall transaction is postive net $20.7 mill to AEP.

AEP will lose the 20.5% interest revenue from the $60 mill IBA loan, but benefit from increased IBA profits via equity accounting of investment and whatever income received from net cash increase and also receive dividend payments from IBA starting in FY09...

With IBA now ASX200, reduced debt, increased drop down profit from EBITDA to NPAT share price of IBA must improve significantly...

... gotta be a great deal for AEP... have I missed something?