I've been over the 10-Q pretty closely. There are certain subsidiaries that cannot upstream dividends but others are o.k. What capacity exists or what the parent looks like I don't know.
If no dividends can be paid, and the parent is cash starved it can certainly lead to a bankruptcy filing. The last 10-K had some parent company information and to be quite frank it looked like there were errors or at a minimum the information was put together poorly. My guess was it was put together poorly. In any event they have had the reverse acquisition that would mean that the old parent company data from the 10-K is out-of-date.
Actually, the true cost was far higher than 19% when you factor in commitment fees. I really don't know for sure what the fee was but the capitalized amendment fee was $8.1 million. Maybe there was another amendment but I don't think so, I think the $8.1 million relates to the $21 million so the effective interest rate was far higher than 19%
Transparency is not their strong suit. I've looked through their regulatory documents and have no idea what the parent's balance sheet looks like. Maybe it is in some of the proxies associated with the Canopius acquisition but I couldn't find them. Can you???
The subordinated debt comes due in 2030s. The convertibles with face of $145 million are due Sept. 2014. I just find it hard to believe they can't refinance that or draw some dividends from some of the subsidiaries.
They have been issuing vague comments about unusual activity in the share price for a couple of years now. It is just "puffing" and should always be ignored. Kind of like your posts and mine as well if the truth be known.
PAL is in the business of selling shares and mining is of lesser importance except to the extent it allows the issuance of funding. Right now they would be wise to at least pretend to be focused on mining.
Without being closer to the process it is impossible to say. I do think the entire process of negotiating the waivers has been fairly easy and the banks legal fees seemed pretty reasonable (very low). The banks have been more accommodative than I would have guessed and I can't quite figure out why.
Is Barclay's and Bank of Montreal just being suckers? I tend to think not but that runs counter to my belief that one cannot trust much of anything coming out of TWGP.
It is conceivable that the share issuance was done to support sales growth rather than simply limp along. Maybe...I don't really know or have any insights on this.
It is pretty bad. Who knows what is going on but obviously transparency and competence have not been their strong suits.
You think the waivers have been onerous? They seem easy to me.
There has been nothing there for many years at this point other than the Kiplinger brand name which still carries value.
NAP is ran by a South African right now. The very worst investments are South African mines ran by Canadians. Maybe a South African can run a Canadian mine but a sharp American or Englishman would be better.
Lots of rude generalization there but there you go.
The reasons that have been provided are that the surface mine is fully mined out and the subsurface mine is transitioning from a mined out zone to a new one. I'm sure that is true but it isn't the only reason. They have also talked about problems with hiring qualified personnel.
The truth is that they have never really been successful. There are so many failed mines in the world and in my mind there isn't any shame in failing but the Canadian ones seem to have a real knack for attracting suckers to invest in them. There are great mines in Canada but the ones ran by Canadians tend to be the ones with potential that never really deliver sustained profits.
Obviously there is a point where it matters but Palladium prices have been increasing steadily over time and NAP has seen costs skyrocket. It just isn't close at this time.
Maybe that will change someday but the track record is terrible.
Very unlikely you see $1.60 barring (1) surviving the next two months without a huge dilutive stock issuance or conversion of debt to equity and (2) spike in platinum prices beyond anything seen to date. Of course, a stock market bubble could change things too.
There are no wildly successful platinum mines in the history of man. SWC has some moderately successful mines but their ore bodies are much more productive.
There is no significant inside ownership. The current management team is fairly new and it would be much easier for them to restructure the thing than carry on as a weakly financed entity that is always on the edge of death.
You bought when things were in a bubble. You might find that you feel better when you sell and make a point of forgetting about the company. That has been my experience with big losers. The only thing that would keep me from selling if I were you would be if you know the management team better than me and have great confidence in them.
Of course not but what do you expect? This is a highly leveraged firm in danger of bankruptcy in both the long and short term.
A five or even 50% move isn't much when you examine it on an enterprise value basis which is exactly how you should be examining it.
You arguably have it backwards. As the Fed has increased asset purchases longer term interest rates have increased substantially. Nothing says they can't decline when tapering begins and in fact they have declined as expectations of tapering has increased. The whole inflationary expectations thing can really mess with rates and it isn't obvious what happens to rates when the taper begins.
Few points worth mentioning from recent regulatory documents:
* TWGP has a material $80 million in accumulated losses sitting in "other comprehensive income" as of June 2013 that is largely the result of losses incurred as a result of Fed asset purchases which DROVE UP (not down) long-term rates. It is a big loss (around $80 million) and it has decreased book value of shares even though it has not flowed through the income statement. Seems reasonable to assume that they will have a $50-$60 million loss in the third quarter and a small gain in December quarter based on where rates are currently. This reduces book value by a little over $1 a share. I'm guessing $6 - $6.50 tangible book when they report in the next couple of days.
* Their future income from investments will likely be higher because they have almost certainly sold their MUNI portfolio (15-20% of portfolio) and redeploying it into higher yielding taxables as their fuly reserved for net operating loss carryforward offsets the additional income. If they have not sold the MUNI portfolio or at least thought long and hard about selling it someone needs to be fired.
*Go to the last 10-K. They provide very good data on interest rate risks.