Bottom LINE ... the russina report showed that MTL was going to Default on his debts at around DECEMBER 2013 (had not been found a solution with debt-holders). Cash wasn't simply there ... to make Interest rated payments beyond December 2013!
This was the real problem! ... at the HOLDING level.
.. It's really unfortunate that U.S. shareholders remained on the DARK!
Now, thanks to the Holidays the bank gave MTL... the problem is hopefully postponed till the end of next year.
MTL has been flirting with Default over the past month! .. I bet ... it was at some point ... just hours away!
As of September 30, 2013 ... MTL Holding had only 54m in Cash ... and Monthly Interest Payments ... of approximately 30m USD. The Money sent to the Holding from the Subsidiaries ... was just 11m per Month...
30-11 ... = 19m ... 19m was the hole.
Given the 54m in current assets and the 19m monthly hole ... ... MTL would have been able to survive only for another 2.84 months
This would have been ... the last week of DECEMBER 2013!
From December 2012 to September 2013 ... MTL ... consumed 90% of its Current Assets to service Debt (since the money received from subsidiaries was not enough to cover interest expenses).
Current assets decreased from 456m USD ... to 54m USD!
This is not speculation ... it simple math.
"Maybe many warrants have been sold to U.S. investors and this is why NBG is falling more in U.S. than in Athens. " Lol! ...
well ... you need to factor in the Exchange rate USD/EUR ... since the USD has been strong over the past few days ... NBG in the U.S. have underperformed!
WWa .. that #$%$ yahoo .. did not even post my entire message! .. spent 20min to write it!
bottom line is ... that the Money the subsidiaries paid to the Holding .. was not even enough to pay the interest on the debt! ... this is why MTL is in risk of default! ...
the holding got his money ... in form of ... dividend from the subsidiaries.
the terrible fact is .. that Current assets .. at the holding level .. went down by approximately 90%
to less than 50m USD!
RIGHT NOW ... The holding company needed approximately 400+m USD to service his debt annually.
Unfortunately .. the revenue generated by the company (mainly from Dividends) ... only covers 1/3 of the yearly Interest Expenses.
-- Possible Default on the DEBTS at the holding Level
THIS IS WHAT SCARED THE MARKET ON NOVEMBER 13!
.... Once again, facts proved that the SEC is a joke ... when it comes down to regulated Foreing Operating ENTITIES ... LISTING shares in the U.S.!
Shame on the SYSTEM! ...
THE INCOME STATEMENTS
first nine months of 2012: 25.084b rubles
first nine months of 2013: 3.182b rubles = 0.1b USD
Cost of Revenue
first nine months of 2012: 0.036b rubles
first nine months of 2013: 0.089b rubles =
THE BALANCE SHEET!
31.12.2013 - 233.169b rubles
31.12.2013 - 234.749b rubles
30.09.2013 - 229.746b rubles = 6.97b USD
31.12.2013 - 18.220b rubles
31.12.2013 - 15.044b rubles
30.09.2013 - 1.782b rubles = 0.05b USD
-- you see the Incredible drop in Current Assets from December 31 2012 to September 30 2013!? almost 90%
IMO ... that's the number that caused the rumors about a imminent default of Mechel! Remember that this report was signed the very same day of the sell-off (november 13).
Shame on the SEC! ... How can the SEC allos that RELEVANT INFORMATION are relseas in russia ... but not in the U.S.? .. .
31.12.2013 -251.389b rubles
31.12.2013 - 249.793b rubles
30.09.2013 - 231.528b rubles = 7.02b USD
CAPITAL AND RESERVES
31.12.2013 -120.039b rubles
31.12.2013 - 130.084b rubles
30.09.2013 - 118.598b rubles = 3.60b USD
Long Term LIABILITIES
31.12.2013 -90.327b rubles
31.12.2013 - 70.399 rubles
30.09.2013 - 74.772 b rubles = 2.27b USD
31.12.2013 -41.022b rubles
31.12.2013 - 49.309 rubles
30.09.2013 - 38.157 b rubles = 1.16b USD
Waaw ... 1.16b Current Liabilities vs. only 0.05b in Current Assets! ... Impressive!
4.2. The issuer's liquidity, capital adequacy and working capital
Net Working Capital:
first 9 months of 2012: -27.511b ruble = -0.83b USD
first 9 months of 2013: -27.511b ruble = -0.69b USD
IV. Information on financial and economic activities of the issuer
4.1. Results of financial-economic activity of the issuer
Net Profit Margins:
first 9 months of 2012: 90.50%
first 9 months of 2013: -315.47%
Asset turnover ratio, times
first 9 months of 2012: 0.12
first 9 months of 2013: 0.15
Return on assets:
first 9 months of 2012: 9.21%
first 9 months of 2013: -3.99%
Return on equity:
first 9 months of 2012: 17.01%
first 9 months of 2013: -8.36%
Uncovered loss as of the reporting date:
first 9 months of 2012: 0
first 9 months of 2013: 10.038b Rubles = 0.3b USD
3.2.4. Markets of products (works, services) of the issuer
The main markets in which the issuer operates:
- Chelyabinsk region - 44.33%
- Moscow and Moscow region - 12.33%
- Kemerovo region - 11.98%
- Other regions of the Russian Federation - 31.23%
- Other foreign regions - 0.13%
- Total - 100%
REVENUE OF THE ISSUER:
Type of business: investments in securities (revenue from investments)
Revenue first 9 months of 2012: 22.998b RMB = 0.7b USD ... as % of total sales of the issuer = 91.69%
Revenue first 9 months of 2012: 1.422b RMB = 0.04b USD as % of total sales of the issuer = 44.70%
Revenue from investments in securities for 9 months 2013 decreased by 93.82% compared with the same period in 2012, due to the fact that the amount of dividends received in 2013 less than in the same period in 2012(by 94%)
Type of business activity: granting rights to use trademarks under a license agreement
Revenue first 9 months of 2012: 2.030b RMB = 0.7b USD ... as % of total sales of the issuer = 8.1%
Revenue first 9 months of 2012: 1.748b RMB = 0.04b USD as % of total sales of the issuer = 54.96%
Revenue from leasing trademark license agreements decreased for the 9 months in 2013 by 13.88% compared with the same period in 2012 (due to a decrease in sales of licensed products)
This can also explain the difference of the Data about the Debts/Borrowing/Payables. This report is about the umbrella Co. While ... it is very likely that some of the liabilities ... (approximately 60%) ... are at subsidiaries Levels
On page 12
2.3.1. Borrowings and payables
Long-term borrowings = 80.342b ruble = 2.44b USD
Short-term borrowing = 37.873b ruble = 1.15b USD
Total size payables = 13.133b ruble = 0.40b USD
Borrowing + Payables = 3.99b USD
(this is quite different from the figure reported in the U.S.)... Can you find a possible explanation?
Is it possible that MECHEL Russia ... only includes certain companies ... while in the U.S. we have the GROUP?
3.1.1. Business name (name) of the issuer
Full company name: "Mechel" OAO
Date of introduction of the current full corporate name: 19.07.2005
Abbreviated name: "Mechel"OAO
Date of introduction of the current Abbreviated name: 19.07.2005
The issuer's name (name of nonprofit organization) is registered as a trademark or service mark
Information about the registration of these trademarks
Well, you can read in the 20-F filed by MTL for FY2012 the following sentence:
"Mechel OAO is an open joint-stock company incorporated under the laws of the Russian Federation. From the date of our incorporation on March 19, 2003 until July 19, 2005, our corporate name was Mechel Steel Group OAO."
In addition, What is puzzling me ... is that in the Auditor's report for the ended 31 December, 2012 ... it was reported:
Full name - Mechel Open Joint Stock Company (hereinafter – the Company).
Short name – ОАО Mechel.
State registration number: 1037703012896.
Location: 1 Krasnoarmeyskaya St., Moscow, 125993. "
State registration number: 1037703012896. ... is the same number reported in the Document I am reading (3rd Q report):
"Основной государственный регистрационный номер юридического лица: 1037703012896"
on page 12 (top)
Market Fair Value of the Equity, Market Capitalization:
28.12.2012: 101b Ruble = 3.06b USD
30.09.2013: 49.860b Ruble = 1.51b USD
"Common shares and preferred shares of "Mechel" admitted to trading on "MICEX". Market capitalization is calculated on the basis of information "MICEX" as of 28.12.2012 and 30.09.2013."
Is it just a subsidiary? ... I think this is the original Mechel ... prior they initiated all the acquisition (2008-2009). You should go back and have a look at the structure of the Co.
Structure of Borrowing (page 12)
Long term borrowing: 80.342b Ruble = 2.436b USD
Short term Borrowin: 37.87b Ruble = 1.14b USD
Structure of Accounts Payable (end page 12-page13)
Total Accounts Payable: 13.13b Ruble = 0.40b USD
So .. the total Borrowin and Payable is assproximately 3.976b USD
buying back at 5 ... then ... ad 3
ah ah ah ! ... a lot of money? ... as of today ... 100k of jan6$ calls ... are worth 1.5m USD? .. does it seem you that a lot of money? .. for a HF .. that's nothing. even if there are only 100ppl that bought the 6 call ...it means that the average loss is no more than 15k ... (form today)...
"ENTERING THE MATRIX: PRINTING ARTIFICIAL EXTRACELLULAR
MATRICES AS A SUPPORT FOR SELF-REGENERATIVE TISSUE"
Currently there are three commercial 3D bio-printers in
development: (1) NovoGen MMX by Organovo, (2) an
unnamed printer developed by Wake Forest University, and
the newest one, (3) 4SPIN developed by Contipro Biotech.
All three of these printers follow the same basic concept but
there are aspects of each that differ and provide competitive
NovoGen MMX is the furthest along in development, but
is only capable of developing simple tissues and muscle
patches , the printer being developed at Wake Forest
University has demonstrated the capacity to print miniature
versions of a kidney, but is far from ready for commercial
application. Presently, the 4SPIN device shows the most
promise for clinical testing and commercial application in
the near future. In contrast with the synthetic biopolymers
used by both the NovoGen MMX and the Wake Forest
printer, 4SPIN utilizes a unique printing technique allowing
for the use of more complex and essential organic
compounds in the creation of extracellular matrices
NOT Very bullish ... right?
Apparently ... Organovo Technology (as April 2013) is not the most promising Technolgy out there!!
I'll write more later!