Why I'm not buying BOL, at this stage, page-2

ERROR ALERT

Not sure if anyone has been paying sufficient attention to notice a very important error that I've made above. My error cocnerns the depletion of NTA's due to the monetisation of PPE and debt pay down. I have assumed that paying down $15m of debt, comes with a hit of $25m to PPE (15/0.6), thus causing a hit of $15m to NTA (hence my stated 14% depletion).

However, what I neglected was to increase the NTA value by the amount by which the liaibilites are reduced. That is, assets reduce by $25m, but liabilities reduce by $15m, thus resulting in a net hit to NTA of $10m, or a about a 6% hit to NTA's (or the loss on sale of the sold assets = 0.4 x $25m = $10m). This should have been obvious, sorry!

It means the net hit to NTA's, in the first year, will amount to about 25% (instead of my previously estimated 33%). Two years of such conditions and NTA's will amount to about $0.18 per share, based on this assessment. If the market managed to re-rate the business to NTA immediately after the second year, it may generate an attractive return to buyers at todays prices (however, I suspect such a dramatic re-raiting before the business indicates an adequate return on its assets, may be unrealistic).

However, if depressed conditions persist for a 3rd year, then NTA's will amount to $0.08 per share.

So whilst this no longer indicates a poor investment prognosis, for me, there is still too little certainty.