Forum Archive Index - October 2000

["G.P.Thompson" <gp.thompson@bitworks.co.nz>]

Mick

I have been following the FCL saga for some time now. It has been rife with rumour and speculation much of which has been published in the Herald. The company announcements have been more circumspect and consistently refer to their objective to realise shareholder value in the company with announcements made by the end of the year.  It is clear that they are trying to make decisions regarding the remaining letter stocks, FFS, FLB, FEG at the same time as they are somewhat intertwined.  

The next way point, so to speak, is the Commerce Commission  ruling on the sale of FEG to Shell due out on Friday 13th.

To sell FEG FCL must also deal with FFS as the cash flow from FEG is reputed to be covering the debt at FFS.

With regard to FFS there is also the unresolved wrangle with CITIC over the Central North Island forestry partnership to be sorted out. CITIC have also been slated as a potential bidder for FFS and according to the latest rumour have been playing hard ball over both the sale and the CNIFP wrangle which is supposed to be going to court.

It is these rumours of a breakdown in negotiations with CITIC that have sparked the sell off in recent days.

HOWEVER the company is still a going concern with a growing asset (forests), has NTA of $1.69 per share as at June.

It reported improved earning in June and is further benefiting from exporting with a lower dollar.  

What to do? Follow the herd and sell: too late now IMO. May as well buy more and ride the recovery which could be equally rapid.

 

GPT