Padilla was boxed in by liquidity and political pressures. All he really wants is some cash at a rate that gives them some hope.
The NPP is the group that really baffles me. They have done nothing indicating a sincere belief the obligations should be paid.
He was a sharp guy but really not up to the task. Need systems/finance people more than engineers.
Yea I'm smart but it doesn't matter as anyone who says they current value of the shares is $2, $0.50, etc. is lying to you. It is a great big guess.
I could make probability based guesses and even then I'll get things wrong by a huge amount. Would have told you that there was no way they would enthusiastically embrace a reverse stock split. Would have told you that there was no way eliminating the dividend was necessary given the asset backed lending available.
The new financing is largely noise as they didn't provide enough details and it is a very small part of the overall capital. What is the borrowing rate, what portion of the plant assets (and value) are secured by loan? Does term loan get first mortgage on the plant? All of those things have to be considered. It makes me angry when companies make incomplete disclosures but there is no doubt those stupid press releases drive the share price.
I have an opinions but have not pulled them together to make a fully coherent guess at fair value. Call it a "wimp out" if you like but that is where I'm at.
It is an out of the money option.
Not as difficult as say placing a value on one of the heavily indebted coal mining companies that have to see huge recovery in pricing in the near future to survive but similar. It can't be valued in conventional sense.
They are not transparent and were "tools" of Apollo so it is very hard to say. I think they plan to issue equity which would be somewhat acceptable had they made it clear that was the plan prior to the Apollo sale.
Why they would issue equity right now is beyond me but that it what it looks like.
Only thing I'm really sure of is that the second quarter is going to be ugly. Not so ugly that they need to issue equity but that is what their actions are consistent with.
There was no good reason to suspend that dividend that I can see. Only positive might be that it communicates we need to drive costs down.
True to a large extent but they is a minimum level of capital expenditures that are required to keep the plant running and competitive. They are not generating sufficient cash flow to cover their interest expense at this time. Will take some changes in the market before they can hope to do so.
The New Madrid plant won't go anywhere as long as it has a competitive power contract unless demand collapses or China goes completely nuts exporting aluminum.
The revolver is asset secured. It expires in 2017. They will be able to renew that.
The debt guaranteed by the subsidiaries is still yielding around 6% in secondary markets. They should be able to roll that.
The debt guaranteed only by the parent was yielding around 13% last I looked. That $175 million tranche is the one that is tough to roll. Maybe things will improve, maybe things won't. If they don't that one gets tough.
The hope is that the cycle will turn before the end of 2018 and allow them to refund their debt. No one thinks they will pay off the debt anytime soon.
Sure you are new. They are reporting losses and you are posting things about profits without qualifying them to say they exclude certain item(s). Everything you have posted has been littered with errors.
Yea they've been buying them up all over the place haven't they.
You can pump away all you like. I'm not going to get in a tit for tat thing but if they dilute the heck out of the shares I hope your conscience can accept that you are intentionally attempting to mislead people. It's one thing to be wrong, quite another to do it on purpose.
I don't claim any particular expertise but to not acknowledge that it is a negotiation indicates you are not very familiar with the regulatory process or the aluminum industry. It is not a given that the PSC would approve the same rate and there is zero chance that Ameren would not do all they can to get an extra penny or two.
The rate ruling would by definition be void as it specifically says it does not apply in the event of a takeover. The entire process would have to be repeated. Might they come to the same conclusion, sure, but Ameren is part of the process and I doubt it would be a rubber stamp process.
CENX and private equity are the only ones who would potentially buy the smelter. PSC would reject a new private equity firm so that only leaves CENX and they only do smelting (no mining, refining or rolling mills) so it strikes me as unlikely unless part of a larger more complex deal.
It is part of the order. Sale means the rate increases although I'm sure they could try and get the same rate. I just don't think the PSC would grant it and Ameren would fight it. I may be wrong but I feel pretty comfortable with my opinion.