by Lophophaps » Wed 04 Dec, 2019 3:58 pm
SOB, thanks. After 10 months and hundreds of posts, information falls off the back of my brain. The key point on the ASIC listing is that this is a Hackett company, and he calls the shots. With 60% of the shares he cannot be over-ruled.
There is another question - who is funding the proposal? In approximate numbers, a house that it similar to the proposed development would cost $200-350,000. Add extras like a helicopter pad, water, sewage, FIFO, a jetty and more and the cost could be $500,000. I suspect that with his dreadful business acumen (two failed businesses from memory), Daniel does not has the funds, so someone is funding this.
Investors look for a good return, ROI, return on investment. In today's business climate it's harder than was the case to borrow for investing, or a mortgage for that matter. Potential borrowers wanting to buy a house must satisfy the lender (usually a bank) that the four Cs of borrowing are satisfied: character, capacity, collateral and credit.
Daniel would not meet any of this. Based on his failed businesses, his character is arguably inadequate. Capacity to service the debt is also questionable. A loan of $250,000 paid off over 30 years at 4.0% principle and interest is about $14,000 a year. This seems viable - just. there would probably be cashflow issues.
The venture falls in a major heap with collateral. I have a house worth $500,000 and a mortgage of $250,000. if I default then the bank takes possession and sells the house, giving me proceeds after selling costs. With all the issues surrounding Halls Island, who would buy it?
There's another issue, perhaps the most important one. As some property investors have found, never buy dwellings or land in a one industry town. With the fall of resource prices and demand, housing prices and rent in mining towns have fallen up to 80%. Halls Island is a one industry idea, able to be thwarted by government at any time. If the political pressure becomes too much then the Tasmanian Liberal “government” (I use the word advisedly) will retreat.
I cannot comment on Daniel's creditworthiness, although I expect a low rating at Equifax, Experian and Illion. Funders behind Daniel would have to declare him as the prime mover, and this would be a big negative.
The bottom line is that this is a dreadful investment, high risk, limited return on equity, limited return on investment, inadequate security, and more. One metric I do not usually apply when assessing these sort of things is that there may be no fish.
SBS, Pow, wallop, biff! Mr Wilkie is my new bestie.