I note Lord and Zwu have only posted on FEAs future in recent...

I note Lord and Zwu have only posted on FEAs future in recent months since all the problems with TIM and GS and note that they are now experts on Forestry. In the ASX release it states that most of their land assets have been revalued with no material change from last year. This means that % gearing should either be maintained or improve this year. I also note current assets should outweigh current liabilities (Quick ratio greater than one) as cash position has improved. FEA can plant 2009 projects on exisiting land bank, so no more borrowing required to fund land acquisiton, plus have signed a lease deal with NSW forests for future plantings. Govt has encouraged MIS through tax breaks and I think by the time the inquiries end (sometime in 2020 - note cinicism), there will be little change to deductibility arrangements as sustainable forestry is required to meet demand and govt is NOT willing to fund it. That said 09/10 financial year may be tough for FEA if MIS sales do not improve this year. But Bell Bay mill throughput should improve dramatically and chip is still being sold at last year's price (I repeat NO PRICE FALL!) which will help offset some (but not all) of the fall in MIS sales. However, it is a PERFECT opportunity for GNS to take out a major competitor in FEA for next to nothing, particularly if ELD want out. GNS bought close to 20% of FEA for $7.2Mill, which values the company at $30-$35 mill which is really a joke given land assets and the fact the Bell Bay mill alone is valued at $72 mill. Particularly if GNS gets a JV partner for Pulp Mill, I think you will see a GNS takeover. That is my prediction which is just a personal opinion and should not be relied upon. To say, however that GNS and WFL will be the only ones to survive the GFC is, I think, a load of cow dung, but I do think their will be further consolidation.