Initiative IFN

I am very pleased with this result.

IFN is now free of the restrictive debt covenants that paralysed it for years. Escaping cost $43.3m (Slide 16) Ouch! This was a known, revealed cost and holders simply have to grit their teeth and bear it.

The restrictive covenant loan was replaced by a relatively high interest rate corporate facility, which has already been run down by $138m on free cash flow - a process set to continue.

Fresh investment into Bodangora is a (relatively) inexpensive project facility. Future projects - Flyers Creek and Cherry Tree looking the earliest - will be on similar facilities, so the corporate facility will continue to shrink to be eventually refinanced at a more competitive interest rate. Reengineering liabilities could never be done with a single gesture.

IFN still has $26m in deferred tax assets. It also has $118m in unused tax losses for which no deferred tax asset has been recognised (AR Note B5). So no tax liability for a few years yet.

The PPA deal to sell the output of Windlab's 31MW Kiata wind farm is an interesting development. Small, but it diversifies intermittency risks and increases supply options.

The next HY will be clean with all the restrictive covenant costs rinsed out and a solid contribution from Bodangora. I expect a strong market response. BUY

Ash