It is simple, yet also complicated.
NEW is being liquidated.The NTA is $1.17.
But transaction costs, US tax, advisor fees, winding up costs, reduce the amount shareholders will receive to $0.95 to $0.98. And it will take a year to receive the final payment.
But since the $0.98 was calculated in late August, the A$ has fallen dramatically, hence the strong share price.But they have FX hedging in place.Of course, they did.So, the total payout will probably be more than $0.98, but not the full benefit of a falling A$.
The problem I see is that on August 25, NEW announced the initial payment of $0.82 to be expected “Late Sep/early Oct”. That won’t happen as NEW is still awaiting some conditions precedent.Even if everything goes smoothly from now, the Capital Return can’t be paid until November at the earliest.That is obvious, yet NEW were silent on this yesterday, even though they made an announcement to the ASX.
NEW, like URF and other Evans Dixon products, this deal may fall through.It is alarming that on Aug 25, everything was set for a late Sep payment, yet now in mid Oct, NEW is still awaiting consent from asset financiers amongst other outstanding conditions.
My concern is that with the market volatility, will the asset financiers still approve this deal.Why are they holding things up?
Should the deal collapse, expect the share price to retreat as the stockmarket has fallen quite hard since August.
