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To ensure that the ALC will survive we need to get rid of the losses of the estate Free Trade Hub. The sims Zurich City, Zurich Hillside and Peaches are still not profitable. The Free Trade Hub was loosing L$ 142,678 in September. Even with the new renter the loss of the Free Trade Hub will be about L$ 100,000 per month and it will probably take monthes to reach break even at the Free Trade Hub.
I have developed some strategies how the ALC can reduce the loss and become profitable again.
Option 1: Selling the Free Trade Hub
I will buy the Free Trade Hub for L$ 500,000. This will bring additionally money to the ALC. I think it will be possible to make the Free Trade Hub profitable again, but it will take some time. That is the reason why I want to develop it privately.
To ensure that the ALC will survive it is possible to get rid of the losses that the Free Trade Hub is making, so getting some money for it is probably the best solution for the ALC.
The advantage of this option is that the ALC would get some money fast and the losses of the Free Trade Hub will be gone.
The disadvantage is that the shareholders do not benefit from the profits, if the Free Trade Hub becomes profitable again.
Option 2: Making the Free Trade Hub its own company
The plan is that every shareholder of the ALC who has at least 10 shares will get 1 free "Free Trade Hub" share for every 10 ALC shares he or she has. For example if someone has 1,000 ALC shares, he or she will keep his 1,000 ALC shares and will get 100 Free Trade Hub shares.
I will borrow the Free Trade Hub as much money as is needed to keep it running.
This has the advantage that the losses will be gone from the ALC and that shareholders can benefit from the profits if the Free Trade Hub will become profitable again.
This option will only work, if the ISE will accept the Free Trade Hub to be listed as a new company. Probably the Free Trade Hub will only be a penny stock for several monthes, as the losses will still be there.
Option 3: Making the Free Trade Hub a subsidary of the ALC
This spin off is nearly the same as the bad bank model. As the Free Trade Hub will be its own company it will have its own accounting and the losses will no longer be counted to the ALC.
The Free Trade will be owned to 100 % by the ALc. If the Free Trade Hub becomes profitable again, the ALC will benefit from its profit.
The advantage of this option is that the losses will no longer be in the accounting of the ALC.
The disadvantage of this option is that it does not solve the problems, it will only remove the problems from the accounting.
Option 4: Keep everything as it is
This option is probably not the best option as the losses of the Free Trade Hub are distroying the ALC sooner or later. It will probably take several monthes to bring the Free Trade Hub into profit.
With this option it will probably not be possible to pay any dividends during the next years.
Option 5: Delisting the ALC and selling back the shares to me.
With this option I would buy back the shares of the shareholders who are still owning ALC shares. I would pay L$ 1 per share. As probably many shareholder are no longer in sl, I think this will cost me only about L$ 300,000 - L$ 400,000. This would be even cheaper for me than buying the Free Trade Hub.
The advantage of this option is that people who want to get rid of their share can sell it to me at L$ 1.
The disadvantage of this option is that people who rather want to keep there shares and still want to participate at the ALC will be forced to sell back there shares. That is the reason why I personally don't like this option.
If the ALC will be delisted it will not be possible for me to pay any dividends, so people would need to sell back there share even if they don't want to.
Please select which option you prefer.
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I'm in favor of the hub going public as its own company to benefit the share holders. As i read the options, this is the only one that puts the interests of the share holders first and offers some measure of rewards for patients offered to the ailing firm as things are currently.
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The situation at the Free Trade Hub is becoming better. The new renter at Zurich Hillside will rent the whole sim beginning November 1, so Zurich Hillside will get into profit next month. And she will help getting more people to Zurich City, so I am sure Zurich City will get into profit soon too. So it could be possible that the Free Trade can get into profit by the end of this year.
That would make Option 4, keeping everything as it is, also to a good option.
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