canyoubus goes long

After a quick look at the preliminary final report out on 26/8/09, I found the following, please note there are plenty of info, I just took a few that stood out

(page 10)

“AEZ retains the support of its lenders”
“No loans have been called for repayment”
“AEZ remains within all interest cover and debt service covenants”
“AEZ is not a forced seller of any asset”
“Detailed resolution strategies presented and being actively progressed with lenders”

(page 24)

Strategic review identified several options to deliver restoration of value
- asset sale
- debt renegotiation
- privatisation
- capital restructure, including M & A, or
- A combination of these

I found it interesting they didn’t mention anything about hybrids like CNP or BBI or a possible capital raising. Very surprised they mentioned a possible M & A, which is not something a company would say lightly unless they consider it seriously. (merger and acquisition for those who don’t know)

I did a comparison to CER (I hold), I understand they are different, since CER is in AU/US and AEZ is in Europe and they each have different debt situation, etc..

(These are rough numbers and I could be a little off)

Market cap: CER: 285mill AEZ: 35mill
NTA: CER: 30c AEZ: 33c
Gearing (LT) CER 75% AEZ: 67.7%
Profit/share CER: 6c AEZ: 4.37c
Interest cover ratio CER:1.2x AEX: 1.44x

(Scottport also did a comparison with VPG)

Its interesting that CER is just about double AEZ share price

As mentioned by someone, orbis is going crazy buying. Reminds me of VPG at 7-8c when orbis was buying, but orbis basically saying “are you guys crazy?I am maxed out at near 20% and yet you guy’s don’t want this bargain?” Yes they could be wrong, and yes there are risks, but the risk/reward is highly favourable. IMO it should up at 10c+ with the other reits (I guess the other reits are more well known?) Very glad to see orbis still buying at 6-6.5c

I realized greedygekko, asteroider, and a few others have been posting very valuable information from last year, just went through them all. Must’ve been a crazy ride from 20c, 15c, 10c, 5c, 1.9c!

My favourite post:

Well, no-one's had anything to say about AEZ since the last rather depressing announcement. Tomorrow, the 25th, is results day. Could the mood be any worse? Stock at 3 cents, no divvies, lots of debt, no confidence about the banks, likely further deterioration in conditions in Europe, too small to attract instos attention. Must be time to buy!!!! Only joking, although that's certainly one strategy - 'when there's blood in the streets...'. I would rather see a glimmer of good news before making a move, and I'm not expecting that tomorrow. Can this thing go belly-up after all? It's certainly priced that way.

I decided to wait for the index balance before entering, regret not getting in at 6c instead, I guess if everyone knows about the balance, does not become such a bargain as shown.


(Should be doji but chart was delayed)
Nice uptrend hugging the moving average with the stoch turning up for a potential run up to 10c+. Resistance at 7c should not be hard to crack

Once again keep in mind there is a dilution risk