Forum Archive Index - April 2001

["mark walley" <mark_walley@hotmail.com>]

Geoff

The capital restructuring will result in SEA owning 100% of the equity in 
TTP.  Minority shareholders will be offered 35 $1.00 bonds,  @ 10% interest, 
  for every 100 shares.

So shares will receive 3.5c p/a for 10 years and 35c in cash.

These "secured" 2011 bonds rank behind the 2007 bonds (current capital 
notes) and borrowings secured by way of mortgage,  but,  ahead of SEA. 
However,  further debt taken on by TTP before 2011 would also be secured 
ahead of these bonds.

The re-cap will take interest bearing debts out to $780m (from $630m) and 
reduce capital funds to  $505m  (from $654m).  TTP total interest p/a would 
be approx  $70m -  while gross rentals are currently around $100m.

Interest on the new bonds ($15m p/a) would take current operating profit 
from $21-24m to $6-9m.  This is before property devaluations which have 
affected TTP over recent years.  If they continue, debt holders would be 
left in a very insecure position.

While TTP may be able to service the debt and repay the bonds in ten years 
time,  it is definately not a 'given'!

However,  taking up the bonds may be an improvement on the owning the shares 
and watching their value decline.

Based on a share price of 22c,  the interest yield from the re-cap is 16% 
and the potential gain is 59% (5% p/a).  Obviously this is less at the 
current price of 25c.  So if you are after the higher cash returns they 
promise,  hold on and ride the risk.

Mark

Disc - sold TTP in the last month

Sourced info from Market Analysis:  http://www.stockmarket.co.nz  - a great 
little read!


_________________________________________________________________________
Get Your Private, Free E-mail from MSN Hotmail at http://www.hotmail.com.


----------------------------------------------------------------------------
http://www.sharechat.co.nz/          New Zealand's home for market investors
http://www.netbroker.co.nz/        Trade on Credit, Low Brokerage. Join now.
----------------------------------------------------------------------------
To remove yourself from this list, please use the form at
http://www.sharechat.co.nz/forum.shtml.