Forum Archive Index - August 2002

["Chris Castle" <c.castle@paradise.net.nz>]

Snoopy,

"I'm not waiting for a return to the glory days. Just pointing out a
possible opportunity here to play about with an odd box of assets
that everyone else thinks is a dog.   When the clouds of gloom
hang over a prospective investment and everybody else has lost
interest, isn't that about the time that someone like Warren Buffet
gets interested?"

That is exactly the point.

Cheers,

CC


----- Original Message -----
From: <tennyson@caverock.net.nz>
To: <sharechat@sharechat.co.nz>
Sent: Monday, August 05, 2002 9:55 AM
Subject: Re: [sharechat] BIL - Why Bother?


> Hi Jim and Winner69,
>
> In answer to your 'why bother' question, when the market is on the
> way down or skewing sideways often it is those companies that have no
> real expectation built into the share price that are the places to
> invest.  If a company is hyped up on growth expectations, then pop
> goes the expectation and down goes the share price.  Is anyone
> bullish about BIL?  Not that I've heard, so no expectations to pop.
>
> All the historical points raised by Jim and Winner have some truth in
> them but I must ask, are they still valid?   Paul Collins hasn't been
> part of the company for years now.  The share price of the company is
> 29.5c on a preconsolidation basis, but so what?  You have to look
> forwards not backwards.  Jim, you think the NTA of Brierley shares is
> only 55-60 cents?  I get $1.28, a fairly large difference,  (see my
> BIL equation post).  I'm not saying I'm certainly right, but I'd be
> pleased in you could point out the mistake in my calculation.
>
> Why invest in BIL rather than GPG?   From my point of view the
> discount to asset backing for BIL is around 50%, vs what (30%?) for
> GPG.  In other words BIL *today* is better value.
>
>
> >
> >
> >Jim wrote:
> >
> >Those still looking at the stock are better off getting
> >a few broker reports to read rather than attempt to make sense
> > of BIL's financials (NTA is around 55 cents to 60 cents)
> > or buying Thistle or Air NZ directly.
> >
> >
>
>
> Are you, Tim,  accusing the brokers of not making sense of the
> financials?  Why would you bother with a broker report that makes no
> attempt to look at the accounts?   As for buying into Air New Zealand
> directly, if ever there was a share that is way over-priced it must
> be that.
>
> The idea of buying into Thistle directly and quitting BIL is not so
> silly.  I might look into that in another post.
>
> You are wrong about Camerlin paying a dividend BTW.  BIL paid a
> dividend of 3cps on 30th January 2000 with Camerlin firmly in
> control.  That was a yield of 7.5% on teh share price of the day.  It
> made BIL quite a good income share to own at the time (which is why I
> had it Winner69), without the benefit of foresight of what was to
> come!  Actually I have to admit I didn't really understand BIL as
> well as I do now at the time.
>
> I do have some concern about Camerlin not being interested in
> minority shareholders.  But I take heart from the fine print of
> section 23 in the annual report 2001, where it states that all
> options granted to Selwyn Cushing had lapsed and expired
> worthless.   There was more joy welling up in my heart when I read
> that all of Greg Terry's options had been cancelled as well, and
> replaced with a new series of options that could only be exercised
> starting when the BRY share price got to $SGP1.10.   Following the
> sacking of Terry, he won't be getting any of those either -
> marvellous stuff!
>
> I am no longer of the view that the BIL debt is the uncontrollable
> nightmare that it was.   BRY can sell down their holding in Fraser
> and Neave over the next 3 years, and flick off the Air New Zealand
> stake to some plonking index fund manager.  That would raise around
> 30c per share.  We'll be conservative and say that only about half
> this will be available for debt repayment, as 5c per year will be
> needed to meet an operating shortfall every year for the next 3
> years.  The debt due to be repayed in the next 3 years is around 17c
> per share.  Given that I haven't allowed for any dividends to be paid
> from Fraser and Neave over this 3 year timeframe,  I think BIL have
> got their debt covered.  By then it will be FY2007, and BIL will have
> access to the full Bass Strait Royalty again, the 'hidden jewel' that
> is hiding away off the balance sheet.  If they sold the rights to
> this again, as they did in 1997, this will effectively clear the
> remaining debt.   If this scenario comes to pass, by 2007 they will
> have become a holding company for Thistle Hotels and the Molokai
> Ranch, and have no term debt.
>
>
> >
> >
> >Suppose the next big hurdles are when a large number of
> >capital notes are due for repayment over the next couple
> >of years. Obviously some concerns out there when you can
> >get BIL 9.25% notes on the market at 15-20% yield.
> >
> >
>
> The yield has been like that for 6 months or so now and the BIL debt
> position has improved considerably.  If I were a fixed interest
> investor, I might seriously consider picking up some of those notes
> at a 15% plus yield!
>
>
> >
> >Shame that so many old BIL shareholders are still holding
> >waiting for the glory days..........
> >
>
>
> The day the share price gets to $4, the equivalent of the $2
> pre-consolidated share price that certain BIL executives who shall
> not be named said it was worth, I'll be buying my ticket to the moon.
>
> I'm not waiting for a return to the glory days. Just pointing out a
> possible opportunity here to play about with an odd box of assets
> that everyone else thinks is a dog.   When the clouds of gloom
> hang over a prospective investment and everybody else has lost
> interest, isn't that about the time that someone like Warren Buffet
> gets interested?   Perhaps it is time to adjourn to the focus
> investment group...
>
> SNOOPY
>
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>
> ---------------------------------
> Message sent by Snoopy
> e-mail  tennyson@caverock.net.nz
> on Pegasus Mail version 2.55
> ----------------------------------
> "Stay on the upside of the downside,
> Anticipate the anticipation!"
>
>
>
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