Bit busy tonight and haven't reviewed but the crux is that at least one bank and probably both the Jap banks have a couple of pseudo-equity clauses included in the deal. Basically they get 25% of any gain in asset value above the new independent values being done for 31st March I believe. Of course the banks will be assigning their own "independent valuer", so we can expect it won't be a "BJT" upbeat valuation. This is a little sweetener for the bank to agree to roll-over for a couple of years.
There are also "minimum valuation gains" type clauses whereby the minimum they can get is some ref rate plus a margin.
Bottom line is the banks wre always going to want to gouge some extra fees etc as penalty for breaching loan covenents. No big problem cause we are holding at 2c any any sort of return will mean upside. I am just suspicious that RJT management are negotiating away shareholders value to preserve their ongoing management fees. If RJT managed themselves with only shareholders best interest at heart what deal could they have done?? Would an administrator have been much worse? Until I have picked it apart properly benefit of the doubt goes to RJT management and the deal is good. Would just like to know how we can forc a wind up in a few years time to actually realise value not just some miniscule annual divi after fee gouge.
cheers
RJT Price at posting:
0.9¢ Sentiment: None Disclosure: Held
