doomsdayers, page-2

Okay lets address this little diatribe step by step.

1) I am no expert on forestry but I do think I am fairly expert in financial analysis. The way these companies are run survival is all going to be about financial analysis at least in the short run. There is no question that GNS and equally FEA have the best position in forestry due to the reliable growing conditions in tasmania. WFL is weaker on this point due to drought. TIM/GTP and ELD are weaker again due to poorer locations.

2) Yes I have started posted on FEA because I think it is in trouble. I have been posting on the other forestry companies for much longer. I dont see a problem with that. I am just airing my views and actually I hope the company does survive on its own, its just not my view that it will.

3)I agree and hope that there will be no further changes to government legislation or tax. It is not really needed.

4) You emphasise FEA asset and gearing position but I suspect cashflow is going to be the problem...it has none. If it has no MIS sales how does it pay interest costs? No one will buy the land at the prices you talk about so how does it pay down debt? Maybe I am wrong about the mill but it seems to have been a disasterous time to spend that money just to piss Auspine (GNS) off. Given the current operating profits of most mills (which are negative) it seems to be to hopeful to rely on a turnaround here.

5) You say it is cow dung to say that just GNS and WFL will survive (I also said TFC will survive). But who else do you think will survive? TIM and GTP are clearly gone. ELD is desperately trying to save itself by selling everything so I dont think it will support ITC let alone FEA. As for FEA it will probably be sold by the banks to survive. As you say maybe GNS will buy it when the mill deal is done and that is actually my hope. But that is not really survival or rather it is a desperate form of survival with little value left for shareholders. Tell me why do you think Perpetual sold out their stake to GNS at 10c? because they want to do GNS a favour? perhaps they saw the writing on the wall. There is no-one else left amongst the listed players so I dont think it is cow dung to say that only 2 will survive.

The way you write you sound like you either work for the company or are a major shareholder or work for a company that has significant dealings with the company. The line you give would seem to come straight from management. Look I hope you are right but I just fear a capital strike on the whole sector will cause the dominos to fall and if you dont have access to other cashflows then you will be in trouble. I am no expert on growing trees but that is clearly not the issue here.

I am sorry if you felt I was dancing on their grave but you have told me nothing that would change my view that they have a pretty dicey future ahead. And when I said only 2 will survive I was rather thinking of FEA as being sold under the GNS wing or alternative just being sold off in pieces. it is true I dont think it will survive on its own.