Spent some more time going through these financials,...

Spent some more time going through these financials, particularly the notes. I'll quote /comment on a few items below:

* Page 46: "In the event of AFGL (Allco) does not continue as a going concern; management and administration services to the trust may be impacted. Should RAML (Rubicon) be replaced as Responsible Entity or undergo a change of control without prior approval of lenders, this could lead to an acceleration of debt repayment."

In short, the position of Rubicon & Allco could impact the position of REU. It might not be as simple as replacing the RE. Although it might be assumed that if a competent and financially sound RE was selected the financiers would agree to this, it is also possible they might take it as an opportunity to reduce debt so call it in.

* Auditors Report: "significant uncertainty regarding continuation as a going concern".

Statement is essentially based on a combination of the Allco relationship and impact this could have on REU, and the balance sheet - particularly the current liability position. Noting, however, that the current liabilities are weighted towards the CRE loan facility - classified as current as it can be cancelled within 364 days.

It is impossible for REU to address the Allco issue, however they are taking actions to address the current liability position. If this is successful with assets sold at good values there is definitely upside. If not problems.

Given a couple of the properties that had been purchased in 07/2006 were revalued at 12/2007 at on average less than 5% below purchase price (which includes costs) I would think that the portfolio overall is in reasonable condition. I guess we'll find out over the coming 6 months or so.

Definitely a high risk stock.

MJS