Post by
mingzhu on Dec 04, 2014 3:58pm
bankruptcy is not the interest of Brookfield
Fate of ARF is largely determined by Brookfield as well as the the business itself. One of the benefits of bankruptcy is to wipe out the value of the shareholders as to restart new. But 5 million is just petty, not worth it even trying. If Brookfield manipulates the downfall, it may face lot of law suits. At same time bankruptcy will give a great damage to the name of ARF, shall i say Goodwill which i insist it dose exist even though written off from the book. After bankruptcy, the client both current and future will look at ARF with great suspicion, concequently dimish the prespect of future bunsiness deals. Even Brookfield want to sell parts of company, the value of those parts wil be much less after bankruptcy. Buyers know they have to sell, because they are not suitable managers of the infrastructure business. Recently ARF obtained the 70 million contract. Who would give ARF tens of million of dollars project without thorough acessment of risks? There are many other bidders,.why would i give it to a comapny at great risk of bankruptcy? They must be fools. But businessmen are not fools, it is their livelihood at risk ,so it is absolutely neccesaary to be very cautious.
Business profit is marginal, any favouable trend or slight advange in certain period will make great difference. ARF in 2009 made net earnign of $2, shareprice in $20s, in 2014, shareprice is 0.20s, 1 % !!! But look at the company, any great difference? NO. So the weather and commodites price will make big difference.