Not bad News,But Price Gone down,Why?, page-46

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8horse

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24/01/15

18:51

Post #: 14636455
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Originally posted by grandcaruso ↑

I don't think you know what your actually saying there. I don't think they actually have $2b in mining assets left to write off against. I haven't checked today but on Friday I went through their balance sheet and I know they had goodwill of plus $1.2B against mining which they probably wrote this current $1.1 B off. There maybe a few other assets that could be written down but they can't just write off against other parts of the business. reminds of the Seinfeld episode when Kramer says the post office just write things off, all the big companies write off everything and jerry says "do you know what a write off is" and Kramer says "no but they do and there the ones doing the write offs".

Anyway 6 more months of depressed IO prices and Arrium's balance sheet will be completely destroyed. They'll be forced to sell off profitable parts of the business to keep afloat, rating agencies will increase their borrowing costs , banks will want further scheduled repayments on the loans, shorters will feed on this like vultures and a huge cap raising/massive dilution will follow to payout loans. And you don't mothball a mine if you think IO price are heading for a strong rebound. Just reading between the lines.

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I don't think you understand my simple point. ARI had Net asset of $3.7b on 30 June 2014, plus, further cap raised $0.7b, total net asset would be around $4.4b (ignoring half year profit, exchange loss). But ARI currently has only $0.6b market cap! Therefore, market has been already priced approx. $3.8b asset written off.

ARI Price at posting: 20.5¢ Sentiment: Hold Disclosure: Held
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Not bad News,But Price Gone down,Why?, page-46

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