Pretty complicated and I don't like the "debt for equity upside" deal that sees banks share in any bounce back of asset value from the latest "independent" valuation (yeah right... low as you can go bank crony valuation). Nothing changed in the sense that we will see no cash return for a couple of years and the banks are running the company for their own good.
Call me cynical but who has the shareholders interest at heart?? The Rubicon managers (ALLCO operated) negotiate whatever the banks like so long as the keep geting paid $4.5M pa in management fees. All Rubicon want is the bank to keep the fees rolling in for them over the next few years.
I said a short while back that administration would have been preferable because frankly the administrator would have cost considerably less than the Rubicon fees of $4.5M pa. All the properties pretty well take care of themselves and RJT pay for the guys on the ground who manage the properties out of expenes anyway. Rubicon extract $4.5M each year for nothing. The banks would have come to a similar "period of grace" to sell down assets when markets improve while ring fencing all free cash for themselves regardless who they are talking too. The fact remains that an administrator would be trying to return excess capital to shareholders while Rubicon management are trying to keep the $4.5M fees rolling in for perpetuity. Until we can rid ourselves of those parasites they will keep RJT alive as a zombie entity for ever given the chance. They have absolutlely no motivation to wind up the trust and return excess funds (which could be substantial in a couple of years time).
No hedging losses and so with deprection of aussie against yen there could well be 50c per share NTA even after latest write down up for grabs. But how to force a wind up in 2011/2012 rather than bleed to death under the Allco fee gouge??
goodluck
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Pretty complicated and I don't like the "debt for equity upside"...
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