EVF

[Lizard]

Recently Evergreen Forests announced their intention to sell off their forestry estate. According to their half year report, shareholders equity at 31 December was $72.5m or approx 46.5cps. Why are shareholders rushing to sell at 29cps? Have I miscalculated? Granted, forestry's "bright" future may still be a few years off, but can the forest valuations be that far off?

Cheers

[k1w1]

Lizard I put this one in my picks for just that reason. However if you look at NUH- they sold their forests at well under NAV which I hadnt bargained on. Thats why I sold my EVF.
Opio on the other hand sold for above NAV but they bought the units not the forest.

[Lizard]

The share price differential implies the forests are overvalued by approx $27m or 25%. Already written down by $14.6m this half year - would expect the latest valuation to have taken into account the Nuhaka sale price, so a 25% over-valuation would seem surprising. I don't hold any - but it looks tempting with the bid at 24cps...

[I.T.Ancient]

I also picked in the comp & continue to hold. With such a low price/NAV and forest prices at historic lows, I figured that this one would hold up in what I believe will be a significantly bearish year. It would be a shock if the realisable value were less that 30cps. Some of the buying was coming from overseas, so maybe it's just that our market is losing popularity offshore while forestry assets are still very unpopular with local investors. I sure hope that the company isn't hiding any skeletons.

[morv]

from memory,opio sale of units was value of forest plus value of freehold land. nuhaka is value of forest but is on leasehold land, and evergreen is forests on a mixture of freehold and leasehold land.

[Lizard]

Latest forest valuation is out at $90.6m. Looks like shareholders equity after latest valuation is somewhere just north of 37cps. With only two days till final bids are due in, would have to think this was a clear signal as to what EVF are worth. Still, they can probably waste a few cents in the process of cashing up.

Discl: Don't hold any

[Steve]

This $90.6m valuation excludes land. Does anyone know what the current land value would be?

Disc:Not a shareholder.

[Lizard]

Land value at HY = $26.6. Plus $2.8m roading and improvements.

[Lizard]

Land value now $43.5m! Well that makes up for the fall in forest value. Adds another 10.9cps. So even at the current price, of 37cps, there is still around 48cps of asset backing which could/should be realised in a sale...

[kura]

OK Guys what gives here,? they announce sale for $104M and price drops to 31 cents ? I thought price would have gone up, not down ?

[Paper Tiger]

quote:
If shareholders support an asset sale then Evergreen would propose to
distribute the net proceeds of sale to shareholders with an initial
distribution by year- end. Further distributions will follow the sale of
remaining forest assets and conclusion of the warranty period and release of
the retention. Current estimates suggest this sale and proceeds from
realisation of remaining assets will yield a range of 28c to 31c per share.

[Lizard]

quote:Originally posted by Lizard

Land value now $43.5m! Well that makes up for the fall in forest value. Adds another 10.9cps. So even at the current price, of 37cps, there is still around 48cps of asset backing which could/should be realised in a sale...


And they can cash it up for 28cps! A demonstration of how meaningless asset values can be I guess. Personally, if I held the shares, I'd be looking pretty closely at the rights issue option...

Management have quite a bit invested in this company...I guess they won't be happy either.

[k1w1]

quote:Originally posted by k1w1

Lizard I put this one in my picks for just that reason. However if you look at NUH- they sold their forests at well under NAV which I hadnt bargained on. Thats why I sold my EVF.
Opio on the other hand sold for above NAV but they bought the units not the forest.


This is what I dont like about forest companies. They persistently have NAV on balance sheet that are well above what the market is prepared to offer for them. I sold EVF but there is another lesson for me here. Dont hold them in the stockpicking contest either.