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
See IRG research reports
