Forum Archive Index - December 2000

["Grant Keymer" <grant@jenlogix.co.nz>]

Gerry,

 

In answer to your point:

 

>about all the bad news being on the table, though

>wouldn't CNIP receivership be more back news? 

 

Maybe, and maybe not.

Newspaper reports I have seen stated that in the event of receivership, FFS would most likely be appointed by the banks to continue managing the partnership.

 

And to add further fuel to the fire:

Today's Business Herald has quite a lengthy article pointing out that the most recent valuation of the CNI Forests is 1.97 Billion, meaning that US$180 million of FFS's US$230 million Junior Debt is covered.

 

So, in the event of receivership, FFS would get most of its money back, and CITIC would get nothing.

This is assuming of course that CITIC's legal action is unsuccessful.  Who can say what the likely outcome there is?

One thing's for sure, the legal action is likely to be extremely drawn out, pending the inevitable appeals etc.

 

Meanwhile, the Kiwi $ continues to appreciate, further strengthening FFS balance sheet due to debt denominated in US$.  In short, I can see more upside than downside, but as always, time will tell.  I feel relaxed about punting $12k on the outcome though, as I am not expecting a quick return.

 

Cheers

 

Grant Keymer
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