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
