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NuStar Energy L.P. Message Board

  • bjfcpainc bjfcpainc Sep 5, 2012 4:33 PM Flag

    9% is NS's cost of capital.....

    You cannot generate distribution growth when your cost of capital is that high..... NS would be far better served dumping the rest of their POS asphalt ops than raise capital at this remarkably high rate. It is doing a disservice to shareholders to pay this high of a distribution in order to raise capital.

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    • I may turn against Greehey very quickly. After all, they get paid regardless whether NS performs or not. I am disgusted. Perform or I vote my measly shares againts the current regime.

      • 2 Replies to threeeputtt
      • "Perform or I vote my measly shares againts the current regime."

        How? Limited partners get to vote on little. Takes 2/3 of holders to remove GP who makes decisions. Take a look at how many units GP owns.

      • You can vote what you want with a limited partnership. The GP runs the company and the limited partners have almost no vote on anything - sorry.

        As to paying 9%. That is sort of the going rate where a company is not growing thier distribution. The good part is the new projects have rates of retrin that look like in the 20% area and should get NS back on track.

        As to asphalt. They made lots of $$ until 2 years ago. Should they have sold 100%- I thikn so but asphalt is a good business about 3 years out of 5. Lets hope they get a couple good years and can sell the other 50% at a good price instead of a fire sale.

        I sympathize about your feelings but NS has simply gotten to where they decided to finance their $$ needs for their expansion now. The market is not happy but they now can concentrate on completion of their projects instead of sweating equity. Also selling the equity says to the capital markets they are stable and will not get more downgrades on their credit rating. I guess for now the CEO putting in another $25M is good enough for me.

    • Agree. How can NS offer these shares below stock price? Almost a $3 drop at opening. 24 hr. notice. no chance to sell.Slowly bleeding to death. I really thought this was a good company.How much more is it going to drop?

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