Early1 ... I agree the value of the transaction is not obvious...

Early1 ... I agree the value of the transaction is not obvious but as you say, at least its done now.

For what it's worth I did do some maths on the capital hedges ... I suspect there will be an accounting loss attributed to the capital hedges this year of about AUD5.0M. Yawn yawn I say but it will raise an eyebrow or two ...

The beauty of transaction I think is in having access to the collateral $5.3M. It does suggest that management are looking in every log for access to cash. Also, as the hedges are now terminated, that counter-party's rights in event of any default provision has gone away ... certainly a positive for AJA's negotiation position.

The A$ continues to strengthen which from a liabilities perspective is a good thing I suppose ... not a good thing from a distributions perspective. Also relative to last reporting date, rates did soften which might be the source of some good news.

The business does continue to get simpler and simpler and simpler...and in some respects more vulnerable to an opportunistic takeover at significantly less than book value. An MBO proposal would be an insult!!

My hunch ... there will be few clues in this announcement as I would interpret management are diligently keeping their cards very very close to their chest...but I expect an awful lot of clues as and when the May negotiations are complete ... both struggling facilities are with a common lender and the more attractive position is negotiable in May ... a foolish move then will not bode well for the sequel negotiations.

Best guess ... distributions for December half @ 10cps, preserving cash internally ... I wouldn't expect any material surprises in results other than possibly some very conservative financial provisioning my AJA, might recognise additional tenant deposit provisions... if anything will squeeze results to retain cash internally ... [sadly] nothing will restore any alignment between security price & NTA ...

All opinions of course. DYOR.


Have a great day