Just had a read of the NXS annual report, in relation to AZA....

Just had a read of the NXS annual report, in relation to AZA. Interesting.

At the present AZA share price, NXS is sitting on in excess of a $60m loss. Because it's presently unrealized, NXS hasn't yet booked this to their P&L Statement. However, if they were to sell out to ROC, they would need to book the loss straight away. You can see how they wouldn't be very keen to do that (given their entire 2007/08 revenue was $65m, for a $24m profit).

However, the situation is a bit complicated by the fact that they funded part of their purchase of AZA shares with a $40m loan. That facility was originally due to expire in early October, however they have now arranged an extension of the facility to 14 November 2008.

So, there you go. I have no idea which way NXS will jump. However, I don't think anyone can automatically assume that NXS will sell out to ROC, given the affect it would have on NXS's profit for the coming year.

I guess the key question is what would happen to the AZA share price if, come next Monday, ROC has less than 90% of the shares and can't move to compulsory acquisition?