Ann: Trading Halt , page-7

Congratulations to FEA for raising capital from offshore sources and perhaps saving itself from insolvency. The big question now is how long will that money last. Even with this cash their immediate future is bleak and it seems that with no profitable cash flow source it is only a matter of time before they have to get more of the same from the free flowing Asian money bucket.

With these funds they have a chance to turn their fortunes around but unless the timber mill starts to show a profit and MIS recovers, which is in doubt, there seems only scant hope.

Shareholders should start questioning the capacity and quality of directors and senior management. They have successfully turned a profit in 2008 of $43.6m into a loss in 2009 of $14.1m. All very well to blame the collapse of TIM and GTP for their own MIS disappointments but at the end of the day the buck stops with the Board. If they cannot lift their game it means that the capital raising could be gone within 12 months. Unless they can get the timber mill to turn a corner and become profitable, or sell assets and reduce empire overheads, they will have to wait until June 2010 to see what good luck might come from tax minimising MIS investors. By then it might be too late.

Whatever, I hope for shareholders and existing MIS investors that FEA can keep it all strung together while divesting themselves of “non-core assets”, whatever they might be.

One thing FEA has in it’s favour is that it should have learned from previous experience about staying alive when the financial odds are stacked against them.