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It would appear then that Board made a genius move in having the...

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maybeadog

456 Posts.

31/03/16

00:39

Post #: 17387066
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Originally posted by Boges ↑

Best offer is as follows:

Arrium board has backed the banks and unsecured lenders into a corner. The alternative to being more lenient on interest and debt repayments is tipping it into administration which given the costs of closing Wyhalla and Iron Ore Mines could mean they get back 30 cents out of every $1.00 of debt owed and in some cases even nothing ($0) after everyone else gets paid.

So it comes down to this: whoever buys out the debts for the highest price (65 cents, 70 cents or 75 cents in the dollar) will now have Arrium in their pocket. This may be why the offers for Molycop were low; you see the private equity firms knew the levels of debt were too high and the lenders were unsecured - a clever way therefore of buying Molycop or Arrium in total via the backdoor and cheaper.

Make no mistake; Arrium's board will be trying to salvage something for shareholders as they own shares and also there will be hell to pay if they are diluted into oblivion.

So debts bought at A$2.4 Billion x 70% = $1,680 million. Now a takeover price for the rest of Arrium of say 9 cents = A$270 million. So they have bought the whole company for around A$1,950 Billion.

The new mob who owns it will have to take on the risk that if markets turn bad in iron ore and steel of dealing with expensive closure costs of Wyhalla and the Iron Ore Mines.

The board will also be doing their work to ensure Blackstone is not the only bidder - competition puts the price up - so may get 12 cents or even 14 cents per share.

Given the way banks have bent over customers and given it to them in the behind in the past 10 to 15 years (Subprime mortages, "Wealth managers" and Insurance) isn't it nice to see them take a 30% cut in the amount of debts they are owed and for shareholders to then get something in return???? For once, the banks have been Fu%$ked. The alternative of course is that they tip Arrium into administration which means they may get $0 after everyone gets paid. The price you pay when you lend a board money as an unsecured lender. Surely these people should have learnt their lesson from the halycon days of the 1980s when they burnt their arses lending money to the likes of Bond and Skase.

H/C members thoughts on this????

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It would appear then that Board made a genius move in having the Banks' loan as unsecured...

ARI Price at posting: 2.2¢ Sentiment: None Disclosure: Held
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