actually the second part of the press release seems even more meaningful to me:
"in addition, the Company was able to purchase stock in open market transactions in excess of $10 million in principal amount during the open trading window pursuant to its previously announced buyback authorization. The Company also established a 10b5-1 plan to remain in effect during the closed trading window associated with the closing of the fourth quarter. All specific details of the Company's buyback activity and management purchases going forward will be reported on its regular quarterly financial reports."
This tiny deal with a tiny regional carrier has actually been announced THE THIRD TIME today by the company.
I didn't claim anything different. But I will help you understand the transaction:
The current Aventine shareholders want to sell as soon as possible - they were the former creditors of the company which went bankrupt already 5 years ago. The restructuring made them the new owners of the company and they had to wait five long years to get at least some of their money back.
So PEIX will issue 17.75 million shares to these guys which will be eager to hedge their selling price rather today than wait until the new shares are issued. This will put ongoing pressure on the share price right from the start.
PEIX will again be saddled with a huge debt load of $135 mln after paying off almost all of the former debt thanks to an exceptional year for ethanol producers.
PEIX will now be exposed to the low margin, high-competition mid-west area.
The Aventine plants are outdated and require millions of dollar of immediate capital expenditures to reach acceptable margins.
Given that crush margins have continued its recent slide it is hard to imagine the rationale for the deal. PEIX is paying more than a dollar per gallon of acquired (outdated) capacity which looks pretty expensive given the even weaker margins in the mid-west.
The deal will fire back heavily if crush margins continue to move down and might easily push PEIX into the red in 2015 given new interest payment and capex requirements.
a tiny regional carrier is actually the opposite from what has been speculated so I would expect the shares to turn red during the session
hopefully the guy will go to jail for his pumping one day
no - production remains the same, they are just giving up on distribution in the PRC
Obviously you did not understand the transaction - the company sold its Chinese distribution arm, but despite being a 100% subsidiary the claimed receivables don't show up in the balance sheet of SGOC. They did not sell any of its production subsidiaries. So they will continue to produce all kind of display products, they are just giving up on their own distribution channel.
The company sold its Chinese trading arm but still has revenue generating subsidiaries so the company remains active. As long as they are up to date with their reporting the company will remain listed. But they might need a reverse split at some time going forward.
with covenant breaches ahead the company might be forced into bankruptcy by their debtholders, equity will be wiped out
With the same experience and analysis you calculated a price target of $30 for a company soon breaching its credit covenants ? Would expect shares to take another huge dive based on the Jana news.
I don't think so. The news looks like a hoax rather.
So you think ethanol prices are going up that much in 2015 ? I don't. The deal is negative as the claimed accretion is solely a function of ethanol pricing assumptions. If ethanol prices move down the deal will be heavily dilutive to earnings.
Even worse it will take months to work through the 17.75 million shares the company has to issue to current Aventine owners who have waited 5 years for this day to finally arrive and will sell immediately. Actually they already started hedging their positions most likely.
The biggest negative is the $135 mln in debt PEIX is assuming - if ethanol prices take another nosedive they will be pretty close to chapter 11 very soon then.
And there will be huge capex requirements to update the outdated Aventine plants to operate at acceptable margins.
the unit should have shown up in the consolidated balance sheet, but it does not
ouch - the Yahoo data is meaningless as the company has not reported to the SEC since filing for bankruptcy.
The enterprise value of the deal is 17.75 x current PEIX share price + $135 mln as published in the press release.
and another $46 mln in advances to suppliers. Not really sure what to make of this.