GRANGE RESOURCES LIMITED. (ASX:GRR) - Ann: Corporate Update - Grange Strategic Developments, 31491400, page-32 - HotCopper | ASX Share Prices, Stock Market & Share Trading Forum

Originally posted by Stockholm ↑

From Michelle

Many thanks for raising your concerns and feedbacks. Please let me to give you a bit more background on property development:

The Company is committed to realising the full value in our assets and providing positive results to our shareholders. The Company’s core focus is on reinvesting in our core mining assets in Tasmania to deliver sustained and stable returns.

The decision for our property venture fits well in our Company’s long-term strategy to manage and diversify our overall risk profile while seeking to deliver higher returns on our investments. We are also seeking a strategic investor(s) to help develop our Southdown asset in WA to fully capitalise on the value in this project. At the same time, the Company is executing a capital allocation plan in which we will deploy a small percentage of our capital to invest in higher-return investments with a manageable set of risks. The objective is to build a portfolio of investments along a spectrum of manageable risk-to-return levels with short to medium term time horizons. With regards to the Property Venture, we have spent quite some time exploring this sector and its potential. We have carried out our due diligence to better understand the market uncertainties and to ensure the Company can manage the risks that come with this venture. We see great potential in the small-scale, high-end residential apartments sector in the Melbourne market. This is underpinned by the demographic and economic make-up of the Melbournian population. As we see baby-boomers down-size their homes, while wanting to keep the lifestyles in the suburbs that they are comfortable living in, we see great growth potential in this sector.

We firmly believe and have the confidence in our management team in delivering results, as they have demonstrated throughout the years, particularly by overcoming the difficulties of the past few years in a depressed iron ore market and bringing the Company out of a very tough period in a very strong position. ROC Built was referred to us by one of our Company’s independent directors who has extensive knowledge of the property market in Melbourne and through his network saw a good fit between the two Company’s objectives. ROC Built although a relatively young company has much experience in this niche market that we are investing in and its CEO and our JV partner. Our venture into small-scale, high-end residential property is a part of our capital allocation plan to deploy a small percentage of our capital to invest in higher-return investments with a management set of risks. We have not specified an amount for our property venture and will be dependent on the investment opportunities that we can identify that meet our objectives. All investment proposals go through a robust due diligence process to ensure we understand and can manage the risks.

Best regards

Michelle

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Thanks for the trouble in posting Michelle's reply - interesting but predictable in what she has said.
You can already predict which JV partner will come out of this better.
It really is a totally insane move IMO and for every dollar invested it will decrease free cash flow by that amount and take away from shareholders' dividends a quarter of the amount invested. So if they invest $40mil then $10mil(or 1c/share) will be deducted from the dividend pool that shareholders were expecting/entitled to under their dividend policy.
It stinks to high heaven.

Vol.	Price($)
1562328	14.0¢

Vol.

Price($)

1562328

14.0¢

Price($)	Vol.
14.5¢	192015

Price($)

Vol.

14.5¢

192015

Open	High	Low	Volume
14.5¢	14.5¢	14.0¢	1.509M

Thanks for the trouble in posting Michelle's reply - interesting...

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Last 14.3¢		Change -0.003(1.72%)		Mkt cap ! $167.8M

Thanks for the trouble in posting Michelle's reply - interesting...

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