yeah - read again and you might learn that NADL does not sell any oil at all.
exactly as predicted - covering here from $6 after hours short - giant gain, a nice finish to 2014
this is just plain dumb - the prolonged downturn of oil, iron ore and coal is putting severe pressure on the company's finances. And while the company hasn't exactly been overleveraged so far the new normal puts things in a different light. If conditions persist or even worsen the company might very well face bankruptcy over the longer term.
The company won't be cash flow positive at the projected revenue levels. Cash will be eaten up by debt service and severance and other right-sizing requirements.
I guess this won't help CVEO if Saudi Arabia chooses to supply the markets with cheap oil for some more years to come.
you don't get it - they are heavily overpaying for the new assets by issuing a giant amount of new shares, diluting your current share of the business almost beyond recognition. The ill-fated deal makes the new HSOL appear severely overvalued compared to its much healthier peer group and this leads to more people selling / shorting the shares. There's plenty of downside at these levels.
Expensive and risky transaction, company is losing its appeal as a west coast producer isolated from the mid-west problems.
conference call will be held SEVEN days from now, no numbers about the claimed accretion, no presentation
would short the shares
obviously not enough to give investors any details to assess the deal.
To my knowledge Aventine tried to sell itself to Valero in spring 2014 but failed as most of their outdated plants required too much investment to deliver acceptable margins. Valero ended up acquiring just one facility then. There are still Aventine facilities sitting idle as the company did not have the money to modernize them and put them back into production.
PEIX will have to invest substantial amounts to bring the Aventine plants up to today's standards. I really have some problems with the rationale of the transaction.
that's close to nothing given the fact that they emerged from chapter 11 almost 5 years ago. Given this low number I would expect required capex to reach unprecedented levels in 2015 and beyond
add another at least $50 million (perhaps much more) in required near term capex to bring the outdated Aventine plants up to required standards to meet minimal margin targets.
They are issuing 17.75 mln new shares to current Aventine owners in exchange for the company. These owners are the former Aventine creditors who had to accept new shares in exchange for forgiving most of their claims in bankruptcy back in 2010. They will be eager to finally cash out. And of course the debt is included in the deal.
The agreement is pretty clear. Classic takeover, company assumes assets and debts. They would have mentioned such an abnormally agreement. It wouldn't make sense anyway - what do you think would happen with that debt ???
Actually they really can't know if the deal will be accreditive as this will be solely a function of ethanol prices going forward. The issuance of 17.75 million new shares will put brutal pressure on the share price as the current Aventine owners have waited for years for this moment to arrive. The Aventine plants are mostly outdated and will cause giant and immediate capex requirements going forward. The "west coast only" advantage of PEIX is gone. The company was debt free and now again faces $135 mln in debt.
This is a BAD deal and investors will feel this going forward. Sell.
you must be joking - I would expect the call to become a disaster as accretion will be just a function of ethanol prices going forward. The company enters the crowded and risky mid-west market instead of remaining isolated from the problems at this region. They are issuing tons of shares to the Aventine owners which will be eager to unload them to the market asap - these guys have waited for many years for this day to arrive. Actually they just need to short the shares NOW to fix their selling price.
And again PEIX will be saddled with debt which very well might fire back on them pretty soon.
There's no rationale for this deal. PEIX exposes themselves to new risks at a high cost and they are killing the share price by issuing almost 20 million new shares to people just waiting to sell asap at any price
so they claim to have $83 mln receivables against the subsidiary now sold to Apex Flourish but their latest balance sheet does show nothing like this.
so if there are hidden assets like the ones claimed by SGOCO are there any hidden debts accompanied with it ?
If not the company stands to net $93 million from this deal which is 9x times the current market cap of the company.