Goodluck to all who hold. I sold but hope it goes well for...

Goodluck to all who hold. I sold but hope it goes well for you.

Has anyone really studied what the announcement means.

To me it means a further write-off of any equity in UK European assets. The 1 times interest cover ratio seems to me to be a work-out scenario. A little bit like superllc within the centro group.

I posted articles that Bank of Scotland was looking at supporting distressed property and it looks like they have. Remember that the bank holds 50% OF Kilmartin and it was rumoured that Kevin McCabe was to be put in charge there. While I cannot find any news, it would appear McCabes reputation with the bank helped the deal. I wonder if the bank is contributing Kilmartin assets.

The positive is that there is a three year workout for the assets and that Valad will be the manager (earning fees). However Valad will need to contribute exta cash to Duke over the 3 years. The major advantage is that the loans all just became non-recourse, therefore the iiquidation risk from the fall in European assets is removed.

The funds management arm, if sold in 3 years, will be required to pay those monies to Duke. I assume therefore, is that for 3 years this asset really has no goodwill. Will this require further write down.

To my mind what has been achieved is a structural separation of the Australian and European business. Long-term the rewards can still be great, but I believe it will depend on an improving Europe. What Valad has done IMO, is limit its European downside risk and bought time for upside reward through a change in the cycle.

How this translates into cash flow (even though funds management will increase with Duke) is yeat to be seen. To expect large dividends in the short-term, given the effective lock-up in Duke, Scarborough payment, extra contributions to Duke required, plus Aussie debt servicing may be a bit premature.

I would really like to see some figures and cash flow forecasts to really see the growth prospects. That being said the survival rating of VPG has increased dramatically given the shift of liabilities to non-recourse.

This are just some thoughts.

Goodluck to all and hope you make a fortune.

Cheers