NZF Group (NZF and NZF010)

[invessi]

Not a good comparison, ALF is rooted, not so NZF!

[Tony Two Gloves]

The market still values ALF at over 10 times the current value of NZF Invessi, I know you are exteremly optimistic about them, based on what i'm not to sure, possibly a large share parcel??

If NZF was a good bet why isn't someone snapping up the 300,000 shares at 0.045??

LOL Mini, at least with a smack in the face you may see it coming.......

[Enumerate]

If NZF can reduce reliance on retail debt funding (which, as pointed out before, is NOT the most significant of their funding sources) they should be able to:

- clear about $10m in operating earnings, per year
- show some growth prospects in all of their categories of finance activity

With the new shares, they have a market capitalisation of about $5m?!?

The new notes, at about $20m, give them an extra margin of about $600k over the cost of the prior notes issue (plus the approximate $2m new equity contribution).

You have got to admit that directors will be well pleased with the outcome of the notes rollover.

Valuation of finance companies or banks is not done on assets. As long as they meet capital adequacy provisions, as long as their funding sources are secure (and, hopefully, long term) - they should be valued on EDBITDA. We will see if the two prior conditions can be met when we are allowed to finally understand the role of the new partner in funding the company. If this is good news - I would expect a re-rating in baseline valuation.

Would you pay about half annual expected operating surplus to own an established finance company at this point in the economic cycle?

[Enumerate]

I think that the resignation of John Callaghan probably foreshadows the seriousness of his illness. I have never met him but have exchanged emails with him a couple of years ago. He was polite and courteous - responded very fully to a "half baked" idea that I put to him. He did not need to do this. In hindsight, he was probably dealing with his illness, though this was not public knowledge.

I regret, very much, that he is unable to continue in a role as director for the firm. I think alot of the "culture" of NZF comes down to the character of the principals. I was very impressed, at that time, and now am simply saddened by recent developments.

I hope this "retreat" will signal a future "advance" - a return to health and the firm.

[invessi]

I would not be too concerned about this, one of the founding executive directors is still at the helm and they have the same executive team that have been with the company for some years now, nearly all of them are ex bankers!

I think that the resignation of John Callaghan probably foreshadows the seriousness of his illness. I have never met him but have exchanged emails with him a couple of years ago. He was polite and courteous - responded very fully to a "half baked" idea that I put to him. He did not need to do this. In hindsight, he was probably dealing with his illness, though this was not public knowledge.

I regret, very much, that he is unable to continue in a role as director for the firm. I think alot of the "culture" of NZF comes down to the character of the principals. I was very impressed, at that time, and now am simply saddened by recent developments.

I hope this "retreat" will signal a future "advance" - a return to health and the firm.

[Tony Two Gloves]

I agree Invessi I wouldn't be concerned about that, I would be more concerned about

1 The S&P downgrading and potential future downgradings
2 The disappearing funding options for this group - Debenture holders and bankers all want their money back
3 The lack of profitability and a clear path forward towards profitability for each of the business segments.
4 The resounding silence from NZF about the potential partner, an extremely long due diligence for a company with 19 loans! Will it be a "White Knight" or "Good Night"
5 I hear things are so bad they have even turned off the light at the end of the tunnel

Apart from that, nothing to worry about.....

The company has struggled since the departure of Callaghan who in my opinion was the driving force. Without him they would have never got off the ground and got listed. I don't see anyone driving this company in any of their business segments, they are lacking leadership and direction. Maybe there is a reason they are EX bankers ??

[invessi]

NZF
21/03/2011 15:58
ALLOT

REL: 1558 HRS NZF Group Limited

ALLOT: NZF: Issue of Securities

21 March 2011

MARKET INFORMATION

NZF Group Limited (NZF) - Issue of Securities

Announcement in terms of listing rule 7.12.1

Please be advised of an issue of securities as follows:

a) Class of Security: Ordinary Shares (fully paid and quoted).
b) Number issued: 33,290,954.
c) The issue price: 33,290,954 shares at NZ$0.061.
d) Payment was settled in full by way of conversion of NZ$2,030,750 NZF010
Capital Notes.
e) See d).
f) The percentage of the total Class of Securities issued: 30.28%.
g) The reason for the issue: Ordinary Shares were issued to NZF010 Capital
Noteholders who did not elect to renew their Capital Notes on 15 March 2011.

h) The specific authority for the issue: Ordinary Resolution to issue up to
56,135,496 Ordinary Shares passed at a Special General Meeting of
Shareholders on 14 March 2011.
i) The terms or details of the issue: The 33,290,954 Ordinary Shares issued
rank
pari passu (equally) with all existing Listed Ordinary Shares.
j) Total number of securities in this Class after the issue: 109,957,622
Listed Ordinary Shares.
k) N/A
l) Date of issue: 15 March 2011.
End CA:00207063 For:NZF Type:ALLOT Time:2011-03-21 15:58:38

[Tony Two Gloves]

Hard to get a handle on what's happening with the SP at present, at 0.03 its a 50% loss of capital if you converted which is better than the current offers on the NZF020 with the best buy at 65% would lead to an 86% loss of capital - but not much is trading on either as per usual. I wonder if we will see the ALF scenario of the SP gradually declining... I personally don't think it will be that bad as the company only issued an additional 50% of the shares that were on issue unlike ALF where the numbers were mind boggling. Looks like everyone is playing the waiting game and I wonder in a few months if we look back at the 0.03 and say that was a bargain or "Bugger, should have taken that".....

[invessi]

TTG, looks like the bond holders who converted to shares are in panic mode, they must think the company is going down and cutting their losses, I wonder who they are talking to for professional advise....not!!

Bids
Quantity No. Price
100,000 1 2.1
50,000 1 2
Asks
Price No. Quantity
3 3 420,888
4.5 1 303,834
5.5 1 409,836
7 1 81,967
9.8 1 3,000
10 1 45,000
Recent Trades
Price Volume Time Cond
3 200,000 11:50 SP

Hard to get a handle on what's happening with the SP at present, at 0.03 its a 50% loss of capital if you converted which is better than the current offers on the NZF020 with the best buy at 65% would lead to an 86% loss of capital - but not much is trading on either as per usual. I wonder if we will see the ALF scenario of the SP gradually declining... I personally don't think it will be that bad as the company only issued an additional 50% of the shares that were on issue unlike ALF where the numbers were mind boggling. Looks like everyone is playing the waiting game and I wonder in a few months if we look back at the 0.03 and say that was a bargain or "Bugger, should have taken that".....

[Tony Two Gloves]

Yeah there will always be those that have to sell so at 0.03 they are getting a hair cut that's for sure. Mind you if they retained their bonds and had to sell its almost a complete shave, rather than a 50% loss it would be around 85% loss - ouch !! Some interesting shareholder changes on the companies office website for NZF......