Love is in the air, but Emeco remains blushingly coy

However, there were some suggestions a transaction could be in the offing, perhaps with the help of UBS.

Emeco is fairly highly leveraged at 49.6 per cent, but it does not need to refinance until August 2011 and it has plenty of headroom within its covenants.

Its 12 per cent share price gain on high volumes before the trading halt was called seems to suggest those in the know don't expect to be diluted by a raising. Notably, though, Boart Longyear's shares have actually risen on speculation it will issue equity to help solve its debt woes.

Other possibilities for the Emeco trading halt could include a takeover, asset sales or an early revamp of its loss-making European business.

A Credit Suisse analyst, Rohan Gallagher, was not expecting an update on the European business, until Emeco releases its results on August 26. He recently deemed the stock "unloved" and one of the cheapest on the bourse.

Gallagher also follows Boart, and he believes its banks will refinance its $US585 million ($709 million) of debt since, in effect, they have no choice, in the present absence of a market for surplus drill rigs.

He estimates Boart could launch a 2-for-3 rights issue at 38c a share to raise $US300 million, and the remainder of the debt be refinanced.

Boart isn't the only ailing group in its industry. Yesterday Commonwealth Bank said mid-tier mining service providers were among those struggling the most with loan repayments.

Newcastle catch

Coalmine investors and buyers beware. It appears the BHP Billiton-led Newcastle Coal Infrastructure Group (NCIG), which is building a third coal loader at Newcastle, is loath to allow new entrants when a mine or project changes hands.

Xstrata bought Centennial Coal's Anvil Hill project (since renamed Mangoola) for $1 billion in 2007. It had hoped that meant it would be given an equivalent share of Centennial's stake in NCIG to allow it to ship the coal from that terminal, since the Xstrata- and Rio Tinto-owned Port Waratah Coal Services is operating at capacity.

But as a Federal Court ruling revealed this week, the agreement between the NCIG partners  including BHP, Centennial, Felix Resources, Donaldson Coal and Whitehaven Coal  means the existing partners have pro-rata rights to any stakes in NCIG should they become available.

Because Felix will be sold outright to Yanzhou Coal Mining, it doesn't appear it will lose its port capacity under that deal, which has yet to be finalised.

But it does mean that any consortium members looking to sell individual mines or projects outright, rather than just minority stakes, could find the port capacity associated with those mines or projects will evaporate, and the price achieved from the sale likely to follow.

Smaller crown

Crown's stake in its Macau joint venture with Hong-Kong listed Melco International is be diluted marginally to a tad more than 35 per cent.

Melco Crown announced plans yesterday to raise $US190 million and repay some of its debt of $US1.8 billion. Most of that relates to the construction of its City of Dreams casino.

Last week Melco posted a larger than expected net loss in the second quarter of $US144 million, It suffered a loss of $US5.7 million in the same period last year.

Adding spark

With external management structures now out of fashion, there is speculation Spark Infrastructure could follow its peers Babcock & Brown and Macquarie Bank and internalise its management.

In what could be a precursor, Spark recently started posting a daily update on "notional performance fees" on its website. Since its share price has been falling in recent weeks, there is now a $230.9 million fee deficit, meaning no fee is payable.

Merrill Lynch estimates it would cost Spark $50 million to buy the management rights from Cheung Kong Infrastructure and Deutsche Asset Management, plus another $3 million a year of management costs from that point. That compares to Merrill Lynch's $130 million net present value of the management costs.

The benefits would include no exposure to performance fees, the unlocking of a potential takeover premium, and a widening of the investor base since some institutions are barred from investing due to the management structure.

Unloved wine

Kirin Holdings has not foreshadowed any major changes to Lion Nathan's small wine division if its scheme of arrangement is successful, but it is worth noting the Japanese group has sold Raymonds Vineyard and Cellar in California's Napa Valley for an undisclosed price this week.

Lion revealed last week it had about $29 million of wine assets for sale. Its boss, Rob Murray, who will head Lion Nathan and National Foods if the Kirin deal is successful, has previously indicated the entire division could be sold when the market improves.

Help for distressed

Australian property trusts looking to shed some assets around the globe will certainly take note of Brookfield Asset Management's new $US4 billion real estate turnaround fund which has been launched in Canada.

It is looking to invest in equity and debt of "undervalued" real estate companies, targeting corporate property restructurings with a minimum $US500 million equity commitment.

Its will focus primarily on assets in North America, Europe and Australasia.

xchange@smh.com.au