revisiting investment thesis, page-32

Post NZ sale, TPI's Assets will be ~$2.6bn, of which $1.3bn is goodwill reflecting the debt fueled acquisition spree of the prior decade. For mine, with a new CEO in place, I wouldn't be surprised if we see another round of serious asset writedowns (to better reflect TPI's actual FCF generation), which will assist in boosting the ROE. TPI is now virtually debt free, affording it significant capacity to re-gear the balance sheet. At a conservative target EBITDA/Int Cost ratio of 5x, implies TPI can add ~$800m in debt. If the right acquisition can be found at the right prices, this would add more than a few % points to ROE as well.

As I have said previously, I think earnings risks are to downside for FY15. So no need to rush and buy the stock in my view. But as to the query re ROE, TPI now has serious BS optionality to rectify that ROE deficiency.