Dependson the whole package - terms of debt restruture, how many shares, etc. Could be a good deal, bad deal or neutral to MTL shareholders. Since all the leaked info is lacking in details, we can only guess. Based on the supposed results of the Chelyabinsk for the 1st Q 2015, I hope they don't have to give up much since (assuming the numbers are real) this appears to translate to an annualized income to MTL of approx. $510 million. If there isn't anything funny in the released numbers and without knowing how this will translate to IAS or if will be repeated in the next three quarters, Chelyabinsk income could get them over the hump until the next phase of Elga is completed.
No, the Rouble is not gaining for zero reason, the rouble is gaining mainly because the oil markets seem to be stabilizing with Brent firming in the upper $50's now that those who forecasted oil in the $20's or $30's have been proven wrong. The rouble crashed because oil crashed and the rouble will rise when oil rises. Forget sanctions, they are almost meaningless to Russia's real economy and are likely a slight positive for local businesses and employment. If oil goes back to $80, the Ruble will be back in the 30/1 USD range in no time.
With RUB at 35, MTL was not a bankrupt company - they continued to generate adequate cash flow to pay all interest on the total debt. They stopped paying VTB because VTB jacked up the interest rate to over 30% on the RUB debt. MTL's biggest problem is getting the funds to finish the second phase of the Elga project which will increase production capacity about 5x. Look for good things out of the steel division in the next year. Patience will be rewarded.
Has anyone figured out what this "government" assistance is all about? The language is so vague and lacking in details, I don't see where we can rely on this to add any value to MTL other than possibly encourage the banks to cut them a break. You say the government will help once MTL successfully restructures its debt. Seems like if MTL successfully restructures its debt, they won't need any help. Sort of #$%$ backwards - they need the help in order to restructure the debt.
Very savy move on the part of Raiffeisenbank. They know the Euro and USD are on the verge of collapse and are locking in one of the few truly "hard" currencies left in the world!!!! Don't laugh (I know there a lot of "HA HA's out there) but US Debt to GDP and unfunded liabilities is all you need to look at in order to see the US Dollar has become the biggest Ponzi scheme in the history of the world.
Actually, I believe last year it was charged in July - prior years was usually in Nov. The custodian (Deutche Bank is the custodian for the Pref ADR's - don't know about the Common)is the same regardless of which broker you are using but some brokers take longer for it to hit your account than others.
You mean those slimeballs at Deutsche who've been ripping us off with $0.03 ADR fees on a $0.10 stock for the last two years?!!!!!!!! At least they went back to $0.01 this year.
Probably means they are under pressure from the US to give all Russian companies a #$%$ credit rating but do not want to give misleading ratings and have just decided to no longer rate MTL.
"The whole country could fail"?? Not too likely since Russia's total Debt to GDP is a fraction (about 10%) of that in the US or most EU countries. In fact, it is the lowest of all major countries - about half that of China. Russia has more than enough reserves to finance their projected deficit for several years. The Western media has totally overblown Russia's financial problems while we continue to ignore the much more precarious financial condition of our own countries. If the rest of the world wakes up one day and decides to quit buying the worthless US dollar and Euro, the Russian Rouble will look like gold.
Common now $1.41 in Moscow - ADR's at $1.26 (12% upside for parity). Pref. $0.44 in Moscow (adjusted) - ADR at $0.34 (30% upside for parity). Love those Preferred ADR's!!!!!!!!!
If the Forbes article is the same one where they cite the Minister of Economy as saying MTL will be put in bankruptcy, I think the info is a little out of date.
Mechel just re-appeared as one of the stocks in the MICEX and RTS indices today and is up about 12%. Not likely they'd be adding it back if bankruptcy was a probability. Guess those "non-believers" will now have to admit they have been wrong.
Not if it's converted to USD's at today's exchange rate. MTL could make a second killing when the Ruble starts climbing against the USD, which I think is a good possibility in the next year when the oil glut is over. If I were MTL, I wouldn't have a problem converting to USD at 60 or more.
As I've always said, cash flow will be the only important thing that determines whether MTL is forced into BK and MTL seems to have adequate cash flow to service the interest portion of the debt. Key will be whether VTB agrees to extending maturity terms for paying off principal and/or whether MTL can get another lender to refinance VTB's loans on more favorable terms. Assuming rational individual decisions, I don't see bankruptcy being necessary and it would probably put the lenders in worse shape over the long run than letting MTL continue to work through the current market conditions.
If you are referring to the Bloomberg article, I can't figure out what they are trying to say. The headline reads "MTL rallies" (or something similar) but then the article itself talks about how the price cratered on Friday. Since the Moscow market is closed today (March 9th), what "rally" are they taking about since the stock hasn't traded since Friday and was down big time. I didn't read this to be any news about goverment assistance and assumed they were just talking about the previous "government guarantee" that was announced without any specific terms.
I would never trade based on "reports" like this. MTL's prospects haven't looked so good in the last couple of years - all their coal production is pre-sold through 2015, they unloaded Bluestone that was costing them $60 million per year, and looks like the steel division is setting up for some big positive surprises. MTL has always had more than enough cash flow to keep it going which counts a lot more than reported earnings. Wouldn't surprise me in the least if this was released so some VTB folks could pick up MTL shares on the cheap. Bankruptcy at this point just doesn't make sense.
First, if they don't become profitable, neither the common or preferred's will be worth a whole lot - I'm just looking at the value of the preferred shares in relation to the common - if you don't think they'll be profitable, you shouldn't be in either. Most importantly, the pref's. get an automatic 20% of income for dividends while the common may not see much in the way of dividends before some additional major debt reduction which could be several years away.
As far as profitability, with the recent sale of Bluestone, they've now dumped virtually all their unprofitable segments which were previously a big drag on earnings. They recently announced that all of their anticipated coal output for 2015 has been pre-sold and production from Elga continues to improve with a major jump expected in 2017. I think the big surprise next year will be from the steel division which will see much higher demand due to Russia's military budget and the planned expansion of the national railways, including the high speed rail to China. Anyway, current cash flow is more than adequate to service the interest portion of the debt, much of which has been reduced with the devaluation of the Ruble and they'll continue to pay down principal as cash flow allows.
Not flirting - just pref. just hit 64 RUB, or about $1.03, or $0.515 equiv. for ADR. Great buy compared to the common ADR. Based on last dividends in 2012, I calculate a yield of around 13% on the common ADR's and 115% on the pref. ADRs. I'm holding for long term dividends so there's no question which I'm choosing.
Based on the dividends paid in 2012, that's your choice between the common and preferred shares. Common ADR's got 24 cents and now selling for $1.79 (13.4% yield). Preferred shares got 52 cents and now selling for 45 cents. Give me all the BS about liquidity you want but I'll take the preferred any day. When MTL starts paying dividends in 2016 or 2017, I'm guessing those who picked the common may be happy but those who picked the preferred's will be absolutely ecstatic!!!!!!