Debt needs to be below $1 billion and more likely $500 mlllion. The interest payments are killing the company right now. He needs to figure out a way to lower the payments. The refinancing did not do this. The interest payments are higher now.
I think if LG gets enough money from Wabush and the sales of the infrastructure from the government, I can see him wanting to own a stake in Bloom Lake and continuing phase II. In the short term this will kill the share price but after 2016 CLF can look forward to a healthy $300 million in cash flow from being the operator of the mine.
LG needs to keep buying bonds! Who cares about the BOD. They stopped the dividend.
I agree with you, LG is the best CEO option for this company. It seems so many of the US miners bought assets at the top of the market. For instance look at all the coal miners who bought and are now saddled with debt. I think it is really odd that mining company's act this way toward their share holders. US mines should benefit US citizens. The fact that the miners would rather go Chapter 11 and dilute their share base rather than sell some crummy assets should tell you a lot about miners in general. Do not trust them. Just like don't trust LG to sell those assets because they only benefit the shareholders not the company. Look for him to buy back bonds with cash flow. He will only sell assets after these assets start losing money. The company most likely won't get much for them. Especially the coal. He might get something for the infrastructure but the mines are worthless. Doom Lake though has potential, lots of potential.
He most likely won't do anything other than buyback debt at less than face value. This is the best use of any cash flow generated from operations. I don't think he will sell anything until he is happy with the amount of debt the company bought back.
Without asset sales this company is a zombie company covered in debt. Day trade it and hopefully increase your shares. Long term this stock will be a big winner with a nice fat dividend. Looking forward to those days. Just going to have to ride out the turmoil until then.
The company isn't producing any news. The shorts own this stock right now. Until news this thing goes down. I think the opposite of you. LG will turn this company around. LG mentioned during the last CC that he is happy to continue to by back the discounted bonds. So until the bonds become fully valued expect LG not to do anything but buy bonds the company issued using free cash flow. This quarter alone the company will receive a tax rebate of over $100 million plus another $75 million cash from operations that can be used to retire some $200 million dollars of bonds. It doesn't make sense to throw value creation like that away.
For a guy that has been on this board for over 3 years you really have a short term memory. Did you forget that CLF is still up from a low around $4.25 reached in March? The stock won't go parabolic without news and Lourenco said on the CC that he is happy to keep buying bonds at less than face value so expect this to continue. The sale of Bloom Lake has been dragged out for 9 months now. So expect no news on this front. Really about the only good thing to happen was a quarterly beat but when the company is into debt up to its eyeballs one quarter won't break the bank. Really devoid of any news I don't see this going up except if there is a short covering due to the iron ore spot rising. Get used to red.
If Bloom Lake was such a great mine why has it taken so long to sell? Has there been any M&A action in this sector? Tells you what people in the know think of iron ore. My hopes are fading for this company.
Technically speaking if $5.80 is broken that would be a break in trend. Higher lows has marked this rally. This would break that trend.
This is going to be a 5 year turnaround. No way will LG make a significant dent in the company's long term debt.
I think short term trading is the way to go with this stock. Ever since it got rid of the dividend there really is no reason to own this long term. That and there is massive uncertainty here. Bloom Lake is a disaster, Wabush is another one, the North American coal segment has little returns, Asia Pacific will be lucky to break even, and the North American Iron ore segment has a gigantic contract due in 2016. Until things become clear short term trades are the only way to go.
Looks like CLF got a really good deal on both bond debentures. The interest rates are high but the devil is in the details. At CLF's option the company can start to repurchase both bonds starting in 2017. The repurchase price for the 8.25% bond would be 108.25% and the 7.75% bond is 103.75%. Paying these bonds off early would be prudent.
The stock is a $15 dollar stock. Greenlight vacated its short position at $10. Should tell you that this run is near its end.