macrae: why did you buy / why do you hold?

G'day all.

This post seeks engagement of the shareholder base.

As you would have picked up from a previous post I represent Macrae Holdings (WA) Pty Ltd; the Applicant to the Takeovers Panel. Macrae Holdings is the corporate trustee for a family trust, I am a director of the trustee. Who am I? My name is not Sam; I'd rather leave my name out of the public arena for now as I do not wish the media to get a hold of me, but you can call me Sam!

(for those that do know me please do not post my name or employer, it can only have an adverse effect on the outcome of Panel proceedings)

The trust has not been a long term holder of BWN and does not have the history or knowledge of BWN as many of you do, nor would the trust sit on as big an unrealised capital loss as some of you would.

Why did the trust buy BWN? I see value in BWN.

Where is the future value in BWN? I see that we have just experienced the biggest coal price boom for decades where the coal price near tripled in a couple of years (to US$300/t in JFY2008) and then dropped back to US$129/t in JFY2009. Given that:
- the March 2009 benchmark HCC coal price contract price occurred during the middle of what is arguably the worst worldwide slump seen in industrial demand (steel demand) seen for decades;
- that it remained the SECOND HIGHEST PRICE EVER;
- the current spot price for HCC is US$160-170 per tonne; and
- Chinese demand for imported HCC is around 30mtpa now, and a year ago was practically nil
- I see steelmakers, from India and China, desperate to secure assets in the world's premier coking coal province (yes, that is the Bowen Basin in Australia) so as to secure future supply. These steel makers may not seek to develop any assets in Australia for some time. They may sit on them for decades. These new entrants to the Australian sector have a very long term strategic view

=> I'd day the future for hard coking and PCI coal looks pretty good (pending of course any GFC Stage 2)

Consider that the HCC price is up to US$160/t now, and US AND EUROPEAN DEMAND HAS NOT YET FULLY RECOVERED from where it was in 2008. If the coal price went gangbusters before to US$300/t WITHOUT CHINESE DEMAND, where will it go in the next commodities boom?

BWN needs to position itself to capitalise on the next commodities boom and create value for shareholders.

Why did I lodge the Application to the T/O Panel on behalf of the trust? Among other reasons, I see that the shareholder base needs help. You guys, and ladies, appear to have been struggling to have your voice heard for some time. In addition to being about value, its about principle, and maintaining a market that we have confidence in, one that has integrity, one that we can have confidence in.

I have a background in mining. I work for a major coal miner and have experience in valuing coal assets. (note: my involvement in BWN is entirely personal in nature; my employer is most definitely not interested in BWN's assets). I'm in a position to articulate an argument for the mum and dad and amateur shareholders, and thats what I'm doing. I don't seek praise or attention, but I do seek your engagement. 40% of shareholders have not sold. Why?

I have no idea how the Application to the Takeovers Panel will pan out. However;

I'd like to get some dialogue going on:
- why did you buy BWN?
- why do you still hold BWN?
- what do you expect of BWN? Where do you want BWN to go?
- what do you expect of your Board?

Please respond to the above four questions. Please try not to make any discriminatoy or emotive comments. Repost this post on any other forum and direct readers to this Hotcopper forum. I'm sure the owner of that forum will understand that it is in the best interests of an efficient and fair market that such a post include such a redirection.

Look forward to reading your posts.

Sam