AFG 0.50% $2.01 australian finance group ltd

what does this mean for ahug

  1. 216 Posts.
    After a some consideration it's worth noting that:

    * There are no sale pre-conditions that require Allco to do anything
    * The value in AHUG right now is not in the Allco letter of support, it's in the potential sale.
    * When there was no sale AHUG traded at $10 with one interest payment still due. That puts the Allco letter of support at $5 or less of AHUG's value when Allco looked like it would survive until after AHUG had to be redeemed.
    * The trust has Allco's money right now and even if the sale doesn't go ahead, the trust can sue to stop Allco getting their money out without honoring the letter of support (or in part). They may not have to give all the money back to Allco and then line up as an unsecured creditor, if the courts agree. So of that $5 there is still some value in the letter of support.
    * AHUG has already dropped a lot and some of that is on the basis that Allco may go into receivership.

    With all that said there isn't a fundamental reason for a drop of more than a few dollars in AHUG. If we see a big drop tomorrow it'll probably be a buying opportunity with the vote coming up in a few days.
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