Forum Archive Index - May 2002

["tennyson@caverock.net.nz" <tennyson@caverock.net.nz>]

>
>
>Can someone give an indication as to what value the shares would be
>if the latest proposal was successful. Sometime ago a value of near
>.45c was mooted.
> 
>

OK, no-one has bitten at this so I'll give it a go.  The question is 
what happens to the underlying share value if the new CITIC $US200m 
cornerstone shareholder deal goes through.

As at December 31st 2001 there were 2,781m shares on issue, being the 
combined total of FFS and FFSA.

Net tangible assets were $1127m

This gives an asset backing of 1127/2781= 40.5c per share.

Of these shares on issue Rubicon owns 17.6% or:

0.176 x 2,781m = 489m shares.

The new CITIC recapitalisation proposal is to introduce $US200m cash 
(which translates to $NZ444m at $1NZ= 45c(US) ) at 37c per share.  
This will create 1,200m new shares.   The plan is then to buy Rubicon 
out of it's position.

According to FFS chairman, Sir Dryden Spring:
"We are also progressing with Rubicon, our largest shareholder, as 
part of the overall transaction, the buy-back of most of their 17.6% 
shareholding interest in the Company in return for Rubicon acquiring 
part of our forest estate."

This reads to me as though Rubicon is to be 'bought out' of its 
holding by giving it trees.  So FFS will in effect cancel 489m shares 
while at the same time losing 0.405 x 489m= $198m in trees.  That 
$198m must come off the NTA of the company as I see it.

The result of all this will be 2,781m + 1,200m - 489m= 3492m shares 
on issue.

Net tangible assets will be:

$1,127m + $444m -$198m = $1,373m

So NTA per share will be 1373/3492= 39.3 cents per share.

According to Sir Dryden, CITIC will at this point be the new 
cornerstone shareholder in FFS with 35% shareholding.

According to my figures the percentage of shares that CITIC owns will 
be:   

1,200/3,492 = 34.36%

That isn't too much of a discrepancy, so I'll take it my figures are 
not too far out.

It is from this point that FFS will buy the central North Island 
forest partnership.  

Now here is where things get interesting, as how much will FFS offer 
the receivers to get those forests back?   If they have bid low they 
will get a bargain, but will such a bid undermine the values of their 
existing forests and so force them into another big write down of 
their assets?   And what will Rubicon do with $200m in trees, once 
they are decoupled from the Fletcher Forests structure?  Is this a 
good deal for Rubicon?  I don't know.   I'm just posing the 
questions.

SNOOPY

disclosure: No RBC, FFS or FFSAFFSA shares held 








---------------------------------
Message sent by Snoopy 
e-mail  tennyson@caverock.net.nz
on Pegasus Mail version 2.55
----------------------------------
"Sometimes to see the wood from the trees, 
you have to cut down all the trees."



----------------------------------------------------------------------------
To remove yourself from this list, please use the form at
http://www.sharechat.co.nz/chat/forum/