It’s open season now, from old man Gotti at Dad’s Army:
In February 2013, China made it very clear to Australia that it was going to cut its iron ore and coal usage…That was the time when Fortescue had to lift its equity and prepare for a price fall, although, at that time, we didn’t know how far it would decline.
China’s actions caused the problem and those actions were well heralded in advance. There was no conspiracy. We have to hope irrational statements by the chairman don’t panic Fortescue’s shareholders and lenders. The company is helped because as of March 2015 it had close to $2bn in cash and the first of its major debt obligations (about $5.9bn) does not mature until 2019. By that time the company needs to deliver on its promises.
And if it does hit snags, its infrastructure is very valuable — particularly to BHP.
For free it is, sure.
