article in todays fin review , page-16

seer, et al, what the author of the Fin article was talking about was Enterprise Value.

IIF and others are trading at an EV of close to zero; ie; were a buyer to make a bid for them on market (ie; buy our the listed capital/market capital) for the current share price, they would have to pay out the debts, and would then get the assets (including cash and an implied NPV for the cash flow).

Because the market cap is so low, and the debts are still below the implied market value of their properties, a purchaser would have to pay market cap + debt (in this case, around $160M + $2.2B = $2.4Bn) and would get the cash and current assets on hand ($226M?) which essentially would reduce the $2.4Bn to $2.2Bn. You would then get $4.3Bn - 15% for the current property implosion, or $3.6Bn in porperty. Ie; the EV is currently close to zero or in fact negative because the market capitalisation does not reflect the true value of the assets and cash flow.

Therefore, were you to make a play for IIF on an EV basis, you'd have to spend (nett) about $2.2Bn to get $3.6Bn of nett assets once you'd paid out the debts.

This is a no-brainer if you have a spare $2Bn lying around.

If, further to this, you can convince the lending syndicate to not call you on the clause to repay the loans on a change of ownership clause, then it becomes ridiculously cheap.