new management, page-2

The only reason I can think of why the banks are hesitant to RJT's wish to refinance its short term debt is because of the association with Allco. The assets, and interest coverage and gearing, althought being a tad on the risky side, are not that bad.

I think the banks probably wanted to wait for the dust to settle after Allco reported their results. They probably had a hunch that there could be uncertainty over Rubicon as managers. The rubicon/allco name has been mud of late so any self respecting banker would not be in a mad rush to agree to RJT's wish to refinance without doing plenty of due dilligence first surrounding the whole Allco link. If Goldman Sachs can move swiftly to somehow displace management (and surely this has been on Goldman's mind for quite sometime the way they have been building up their stake) then the banks have certainty about the business going forward. And I agree Yonder, it could well be Allco's bankers are ready to offload the rights a.s.a.p., so we could get quick action on this front, just what the doctor ordered for RJT. It then is a no brainer from the banks point of view IMO, to give RJT another 6 months or so to slowly look at opportunistic sales. Because really the RJT model looks fairly simple, just a tad too highly geared in this environment. Just property on its books, no evidence I can find of prices falling in Japan, in fact things seem to have risen since RJT's valuation dates, and no investments in loans or associated margin calls with RJT.

So we have the Allco share overhang and associated short selling pressure removed (surely all margin investors who are ever going to buckle have bailed by now), and highly likely the disgraceful Rubicon management will be removed quickly. Given this, what have the banks got to worry about with RJT? And what should we be worried about?

Maybe a severe global correction in commercial property prices? Possible perhaps, but I have a hunch that in this environment the AUD/JPY may fall substantially on unwinding risky carry trades, which would increase the NTA in $aud terms?