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TransMontaigne, Inc. (TMG) Message Board

  • thinkprecisely thinkprecisely Dec 1, 2004 3:52 PM Flag

    All day, but all out

    It took all day, but I am all out of TMG. I was in over the last 3 months at prices from 5.06 to 5.25, and I am not all out today at prices from 5.6 to 5.68.
    It took from 9:45 am to 3:46 pm.

    For me, it's a story of the recent deal creating more shareholder dilution than is appropriate, and the sketchy manner in which it was initially fed to us. I think Morgan Stanley got too much of the pie, shareholders got too little.

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    • abc123c59102,

      Don't be so harsh on vuss49. Yes, he is very negative and critical without posting any real substantial details on the contracts, (care to help us see the light vuss?), but me and vuss email often and he is not a basher type, just posting legitimate questions, although the tone and phrasing was awful indicative of someone that was trying to could have posted the questions in a more professional manner.

      But to add some color to the subject, I am going to speculate that he is refering to the fact that after TMG takes physical possession of the products that then they are exposed to losses(as per the press release), although one could read into the release and surmise that maybe they meant physical loss as opposed to monetary loss(i.e, being long oil in a decling market).Something that vuss conveniently forgot to mention is that hedging can remove alot of the risk of holding oil in a declining market.

      Regardless of the situation, no business is 100% safe from market fluctuations(be it commodities, health insurance, D&O insurance, fuel, rent, interest rates etc etc). Anyways, lets all remember that the total debt load at TMG is around 200 million, give or take. They should receive around 80-90 million for the linefill, which, when added to the cash on hand(around 10 million), means net debt of around 100-110 million. Then, when they IPO the MLP, all they need to do is IPO say 50 million. Remember that they will be receiving 36 million from Morgan Stanley when MS excercises those warrants. That would knock debt down to virtually nil and TMG the GP, which will most likely retain a lare stake in the MLP, can use the MLP cash distributions to delever, or they can place some of the debt of the MLP balance sheet....anyway you look at it, the balance sheet ought to be substantially better in thenext 6 months or so.

      Anyone see today that KMI(which is the GP of KMP, which is the largest MLP) announced that they expect cashflow of 625 million in 2005...that is huge, and most of that is due to KMP, although NGPL does add a significant amount to that sum. Not saying I expect TMG to get to that point, but what I am alluding to is the fact that the GP/MLP structure is very rewarding to both the GP and MLP holders.

      All of that being said, this is a situation where you have to have patience, just let management get the financial deals done and the prospectus written and the IPO done and then we should be able to recognize the fruits of their labor....its still early in the ballgame....

    • I have similar thoughts, the linefill is probably good for $90 million. Then they IPO say half of the MLP to the public and raise maybe another $100 million. That gives them proceeds of $190 million and that helps them knock down the $330 million in debt and working capital down to $140 million, which the MLP can easily handle. Again, not sure what the mix will be as far as debt and assets at the MLP and the GP, but the end game is this, sum of the parts worth significantly more than lumped as a c-corp. Having Morgan Stanley as a strategic partner does not hurt at all, afterall, Morgan is a financial backer of Canterra Resources and this could provide another outlet for them to exit their midstream assets while also keeping some upside (warrants). They recently sold some gas gathering assets to Penn Virginia, but I suspect that they will have more incentive to help TMG grow, especially since they have warrants for 5.5 million shares.

      Thing is this, TMG might actually end up paying a dividend as well as having an MLP that pays a distribution, as the GP will probably end up holding half of the MLP units. Should be real interesting to see how this all plays out...I really like the GP's and have owned alot of them (KMI,PLX,MWP,etc).

    • God---stong buy

    • I'm not sure what they will do, but I think it's foolish to get bearish at this stage in the game. In my opinion the long term bonds and s&p ratings will be history by the end of 2005. This company is going to do great because of people who are retiring(76m over20 years)and looking for yeild.

    • ab123c59102-Fom your post, I gather that you think TMG will only IPO a small MLP(40 Million). They mention that that is indeed one of the options. I think that perhaps another option is floating new debt, using th proceeds to retire the old debt and then IPOing a larger MLP.

    • Find out more about TMG.A -read the bios on these guys.
      All these people have big positions in TMG and you can bet they are watching out for their interests. One other thing to keep in mind is when the MLP is formed there will be no double taxation on some of the profits. 40m(IPO)+100m(feedstock)=140m-220m(bond redepemption)=80m finanaced thru other sources.Bond warrants invalidated=no dilution. Morgans going to issue a buy on TMG as soon as thing get figured out. Morgan only gets paid if the price of TMG goes up.