SHARES in Hedley Leisure and Gaming have been placed in a trading halt, the Australian Stock Exchange announced this morning.

The trading halt was announced pending an announcement by HLG.

Industry analysts said there were rumours HLG could have trouble refinancing its debt in 2010. This is understood to relate to concerns about smoking bans and poker machine tax law reforms affecting returns.

ABN Amro Morgans Cairns manager Michael Ryan said such fears were unfounded, however, and just reflected a nervous market.

He said Hedley’s value could just as well improve as decline by 2010.

"People are shooting first and asking questions later," he said.

"It is based on rumours from an industry source that capitalisation rate expansion is a possibility in the short term."

In a prepared statement, HLG chief financial officer Stephen Donnelly said they would manage interest rate exposure to deal with any cash flow issues.

"Significantly in this environment, we are seeing the value of HLG’s decision to hedge our interest rate exposure for 10 years," he said.

"These factors highlight that at current trading levels the share price is significantly undervalued and does not represent all of the tangible and intangible assets embedded in the fund."

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