IMO the Aged Care business is not broken (far from it), the industry business model likely needs a little adjustment. With EHE - it is about having an equity issue of $50-$100m.
Dividends could be cut to retain $20m but will still be paying circa 8% grossed up.
Write to the MD and ask her to ensure that- should there be a rights issue - it should
be a full entitlement to shareholders. Furthermore, shareholders should be given the
right to apply for more than their entitlement - the shortfall, if any, should be directed towards shareholders and not to underwriters.
And - a takeover bid is a distinct possibility - the sums works IMO.
(Xmas is 3 weeks away)
EHE Price at posting:
$2.62 Sentiment: Buy Disclosure: Held
