Monday, January 05, 2009


Received the documentation and forms for the revised version of the planned EBI delisting today. I'm going to withdraw 6000 of my 8707 shares from EBI and apply for shares in the new unlisted EAIT. The number that I'll keep in EBI is exactly the number that I was going to withdraw from EBI in the previous delisting proposal. No redemption of EAIT units will be allowed till the end of this year. Keeping EBI shares allows for some liquidity and reduces my EAIT stake to 5% of net worth (at the NAV value). The plan is to gradually wind up EBI and distribute the proceeds. My impression is that a big chunk will be distributed this year and then the remainder over the next few years. There can still be some hitches in this process mainly concerning financing. Currently EBI holds $1.57 in assets for every $1 in equity. This is accomplished through a swap provided by Macquarie Bank. Macquarie still hasn't said whether this financing arrangement will be maintained for EBI once EAIT is delisted and Laxey Partners become the effective investment manager for EBI. Financing for EAIT is in place (subject to some conditions).

In the meantime, the share price of EBB the current manager of EBI has skyrocketed from a low of 3.5 cents on December 8th to 12 cents at today's close and an intraday maximum of 14 cents. In response to an ASX query EBB stated that there is no news that the market is unaware of and that they will be announcing a positive operating profit for the financial year that closed 31st December. Actual P&L will be a loss due to writing off of intangible assets. The real news is that the various companies controlled by Steve Eckowitz have been selling shares in EBB including sales by Harsit Holdings of 17.7 million shares on 17th December and 14.9 million shares on 31st December. In total they have sold a net 34.3 million shares of the 48.8 million that they held last December. Ecko Investments sold essentially all of its 3.8 million shares - most of them in December and Pointyen Pty sold all its 225 thousand shares on 31st December. This seems to be due to margin calls related to ANZ from what I can tell. I suppose that traders think that the (forced) selling must now be over. Wingate Group's purchase at 4 cents a share is now looking like a brilliant move. I hold 20,000 shares with 10,000 bought on 17th December for 6.1 cents.

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