SOL under $15 ?, page-18

Really the Rhl share investment they had wasn't a winner it actually dropped about 20% over the 10 years. The earnings were around the same as it was in 2000. The sale of the 9 odd percent in NHC made little sense - but a friend said that SOL and BKW had been impressed by the improved liquidity of their shares and inclusion on the ASX 300 index. He felt that freeing up 9% of the NHC share would also improve liquidity there - I am less convinced about that.

SOL had $300 m cash at year-end and NHC was $236 m so in their own right they really had $64 m - I am assuming they consolidate and then disclose the 40% outsiders as minority interests. So that is not a huge amount and in fact, they would only have got 60% of any distribution by NHC. With Wesfarmers looking to maybe dispose of its 40% in Bengalla it was probably better to sell 9% of NHC and let it ( NHC ) keep the powder dry for any acquisition of Bengalla. The structure really does lend itself to a small cascading rights issue if NHC was to have to raise say $400 million as Sol only has to find $200 M and they probably have a fair amount of that available.

I really would like to be majority holder in Bengalla but I think the price may well be the sticking point but Wesfarmers have sold the other half of their coal assets. Do I want to have an investment in more coal ... Not sure but they seem to have done well so you must back them to do well again.