thorn in the side gone, page-4

yes I spoke to Peter a few days ago, and ended up buying some.
The bank covenants will probably be broken at the end of the year because of the hedging position. I dont know if they screwed up on their Forex hedging but the underlying business seems to be a cash cow (debt service ratio of 3 ) and to me an Australian bank may give it a chance and not call in its loans while the company can easily meet its mortgage payments due to good cash flow , so it can sell down its debt and trade its way out of the problem.

THe problem here is the loans are with Japanese banks who are considerably more risk averse than Australian banks and will probably want to cut their losses, without loosing any love

also the market is dead in japan they cant seem to sell properties above the average loan value on the properties therefore there is little chance of reducing gearing through asset sales


Long term the stock has potential if it can trade out of current situation and I would think at current sp the investors realisation that the company will break its covenants has been factored into the sp.

I give it about a 30% chance of being able to not go bankrupt but if it survives in a couple of years there should be a 10 fold appreciation in the sp to close in on the NAV of the shares at $450m



Its only 5% of my portfolio due to how risky it is. I have bought a few in that category over the last 10 days BEC, BBI BBP and may get some RNY. UBS is involved with GJT but not sure how the association is someone else may better explan this I tried for Peter to tell me but it was too hard for me to understand