Forum Archive Index - August 2000

[Stott <bincqs@ihug.co.nz>]

Good afternoon folks
Long time reader (congrats on 1 year Ben and co.), first time writer!

I would like to start a discussion on Fletcher Forest (FFS).  I am
interested in this stock's VALUE rather than performance.  

It would appear that very shortly the company will be sold....

"Merrill Lynch is handling this process, also in its final stages."
 - Fletcher rejig into last stage, By GEOFF SENESCALL 9/8/00
 (http://www.herald.co.nz/storydisplay.cfm?storyID=147166)

While the company carries a lot of debt, the "Net Assets backing each
share" (Is this similiar to Net Tangiable Assets - NTA?) in the last annual
report was US$0.73 (NZ$1.39) (There was no mention in the annual report of
how many shares have been issued, does anybody know the total number?).  

The stock is hanging around NZ$0.84 (on pretty good volume) today - a major
discount to the assets backing.  It would appear that if the company was
going to sale for NZ$1.25+ per share, then a nice 50+% gain could be made
(if one is patient).  But I feel like I am missing something here.  I would
appreciate others thoughts.

Also if Fletcher Forests is not going to be sold (which seems unlikely),
its balance sheet will need to be recapitalised.  This will involve either
bringing a new shareholder on board or selling assets.  
How would this scenario effect the shares value?

Yours 
Simon


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