Forum Archive Index - August 2002

["Lindley Smith" <lindleysmith@bigfoot.com>]

I think I've read from time to time that Molokai Ranch is very difficult to
value. Sounds like it is not much more than a largely undeveloped island, so
it's value could be . . . your guess is as good as mine. Is it possible that
the book value is the purchase price plus capitalised development costs ie.
nothing at all to do with it's market value.

Can't be sure about the Bass Strait royalties, but years ago they sold them
off in some form or another as they were a steady income stream. At the very
least they should be able to get a pretty accurate picture of their value,
but I don't no how they are valued in the accounts.

Overall I think it may be difficult to value BIL as a Molokai, AIR and THO
don't have any obvious buyers at the moment.

Perhaps they should do a Fletcher Challenge ie. pay off a pile of the debt,
and distribute the THO shares pro rata to existing shareholders. Everything
that is anything left call it Rubicon II and sell a 20% shareholding to GPG.
:-)

FRN could continue too be sold off, BSR could be sold off, AIR can
eventually be sold to Qantas, leaving the shareholders to change the company
name to Molokai Ranch Ltd.

Arguably shareholders would lose out on getting a top price if THO was then
takenover, but we (yes, I've been in there for far too long) aren't exactly
getting a good price at the moment.

That's my 2 NZ pesos worth, hopefully BIL shares will continue to be worth
more than that. If not they can always consolidate the shares again.
I'm still waiting for Paul Collins/Bruce Hancox's promise of $2/share from
many years ago.

----- Original Message -----
From: <tennyson@caverock.net.nz>
To: <sharechat@sharechat.co.nz>
Sent: Friday, August 02, 2002 6:23 PM
Subject: Re: [sharechat] The 'BIL International' equation


Dear Chatters,

As promised, this is how I see the 'BIL' equation.

Global assumptions used are as follows:
--------------------------------------

Exchange Rates: $NZ1= 47.5 USc
                $NZ1= 85 SGPc
                $NZ1= 30 UKp


Total number of BIL International shares on issue:

1,368,000,000


Specific assumptions, relating to the assets below are included with
the relevant calculations.  Where not specified below the dollar and
cents amount shown represent New Zealand dollars:


--------------------------------------


>
>
> Assets:
>
> A1/Property Plant and Equipment
>

$US4m, or 0.6c/share.


>
>
> A2/Investment Property (Molokai Ranch)
>
>


$168m, or 25.9c/share.


>
> A3/Investments in Associates
>
> -3a/ Thistle Hotels
>


BIL International holding is 46%.
Total of 'Thistle' shares on issue is 998,800,000

Asset backing is 1.120(THO), where THO is the thistle share price
quoted in UK pounds but the result is in $NZ


>
> -3b/ Air New Zealand
>


Air New Zealand total holding is 5.4%
Total Air New Zealand shares on issue are 4,203,354,290

Asset backing is 0.1659(AIR), where AIR is the Air New Zealand share
price in $NZ, and the result is in $NZ



>
>
> A4/Listed Investments
> -A4i/ Fraser & Neave
>
>

Fraser and Neave total holding is 8.8%
Total Fraser and Neave shares on issue are 295,572,803

Asset backing is 0.02237(FRNM), where FRNM is the Fraser and Neave
share price in $SGP, but the result is in $NZ

>
>
>
> A5/Other Investments
>
> -A5i/ Bass Strait Oil Royalty
>


$US69.1m or 10.6c/share



>
> -A5ii/ Unlisted Company Shares
>
>


$US20m or 3c/share


>
> A6/Short Term Assets
>
>


$US552.4m or 85c/share


>
>
> Total:  SumA1A6                          {&1&}
>
>


125.1 + 0.02237(FRNM) + 0.1659(AIR) + 1.120(THO)


>
> Liabilities:
>
> L1/Due under 1 year
>
>

$US157.9m or 24.3c/share

>
>
> L2/Due 1-2 years
>
>

$US600m or 92.3c/share

>
>
> L3/Due 2-5 years
>
>

$US110.6m or 17.0c/share

>
>
> L4/Over 5 years
>
>

$US219.4m or 33.7c/share

To all of this must be added the 'provisions' (liabilities on office
relocation and pension schemes)

$US9.4m or 1.4c/share

>
>
> Total:  SumL1L4
>
>

168.7c/share

>
> SO to get the result we want, the net tangible asset backing is:
>
> NTA= SumA1A6 - SumL1L4
>
>

This gives:

NTA=0.02237(FRNM)+0.1659(AIR)+1.120(THO)-$NZ0.436

If we put in FRNM= $SGD7.85 AIR=$0.65c and THO=£1.28, which are the
market prices (near enough) at the time I write this we get:

NTA= $NZ1.28

So the answer to the question is BIL International trading at below
its asset backing is 'very much yes' as I see it.

*Provided*, that is, you believe all the asset values that are listed
in the annual report.  Would anyone like to put forward an argument
that one or more of these assets is not recorded or trading at fair
value?

SNOOPY

disclosure: hold BRY






---------------------------------
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."



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