Okay - this is the million dollar question.Let's do some math on...

Okay - this is the million dollar question.

Let's do some math on how they 'value' a company for an IPO.

The company is currently not earning revenue so the underwriters will look at the companies near future expected cash flow.

So - lets presume the off takers are taking all 125m ton of IO at an agreed price just below $80usd p/t. So therefore 125million x $75USD = approx $10 billion PA USD.

Some underwriters will multiple that by 2.5 or up to 5 to determine 'near future value'. If there are contracts in place this will help that process (ie off take agreements)...

So equation 1 - 2.5 x 10 bil = 25 bil USD (36 bil AUD). 25% state = 9 bil AUD. 5.7bil shares on offer = approx $1.57 per share (ratio)

equation 2 - all the same figures but only a 10% state = approx 65c per share (ratio)

Lets do near future value at 5 x cash flow:

equation 1 - 5 x 10 bil = 50bil USD (73 AUD). 25% state = 18bil AUD = $3.10 per share

equation 2 at 10% stake = 1.2 AUD per share.


One thing to consider is the amount of IO the off takers purchase. If it is only 50mil ton P/A divide all these figures by 50%. ie Equation 1 would be 75c and 32c and equations 2 would be $1.55 and 60c. I guess they are best and worst cases IMO...

Also there are 100 different combinations ie - underwriters determine value at 3.5 x 50mil IO P/A...

Looking forward to the company updating us on liquidity early next year hopefully.