Wednesday 5 March 2008

Hedley down

Hedleys ASX listed Hedley Leisure & Gaming group down 30% in first half hour of trading this morning.

Punters paid $3.50 each for last year. Last trade 90.5c down from $1.30 yesterday afternoon.


Anonymous said...

An abundance of unsold apartments and a change of council imminent ... why am I not surprised

Anonymous said...

Hedley has reneged on some payment to National Leisure and Gaming, but I am unsure of any details. Check their website.

Anonymous said...

While the stock has nothing to do with Hedley's development business (it was just a way for Tom Hedley to try and offload some of the risks with the hotels and gaming rooms), it's being marked down for the same problem that plagues Hedley development as well as CEC.

Too much debt, too much risk, and now they can't pay it. And in the current environment, they won't be able to refinance it.

If Hedley and/or CEC go down (CEC in my view very likely, Hedley now only 50/50 for survival), over a thousand jobs are lost directly, plus another thousand or so in the region.

There's your recession.

Anonymous said...

Hedley have this afternoon made a market sensitive announcement on a very complex financial transaction involving their interest rate swaps, which is the means they have used to hedge their interest rate for 10 years.

$45 million in funds from swaps have been used to reduce debt and reassure the market on their position. Not sure how they do this while retaining the interest hedge as they have stated, and they are still down 30% today. While Hedley has hedged the interest rate for 10 years their current debt funding arrangements expire in 2010.

Not sure i'm as pessimistic as 'retired sharebroker' but there are questions to be answered. Risks for Hedley are more likely related to their tenant NLG and asset valuations. Many punters don't seem to realise that their 'yield' from Hedley is not just an income distribution, but capital, which requires the assumption of ever rising property values to be sustained .... just like pulling equity out of your home value.

Anonymous, if you look for recent columns by Bryan Frith at The Australian you will find a big spray about shenanigans between Hedley and his main tenant NLG. Don't look for such adverse comment in The Cairns Post though ......

Anonymous said...

thanks, thersites. I have been trying to find out as much as I can about NLG and Hedley.