This is the only thing that makes sense, LG's goal on this whole process was the elimination of the $700 million in liabilities.
They did not extend the bid deadline, without any extension, they could not take on new bids. They could be working with current bids trying to get them to come up with a better price that CLF would accept. For example, getting a bidder to accept an offer by Quebec to be a partner in the purchase.
Let's see, the price is positive on fair volume… try just looking at the trades, not throwing out statements like you just did. As far as the day goes, I don't have a clue where it is headed, but in the long run it will go up from here.
So under this "Dark Horse" thing, do they have to settle it before the end of the "Stay"?
The CCAA has only one month left based on their last stay… FTI needs to release something soon. Do they really have that many bids that they need more time?
Seriously, have you looked at what IOC pays for iron ore? Deliver to the US free? You really need to look at the operations before you make a statement like this. I have and know exactly what their cost are, you should do the same.
Let's see, RIO ad BHP is getting $55 a ton for fines mined in Australia and shipped to China. Then you need to add $30 a ton to pelletize and $35 a ton to deliver the pellets to Essar's plant. $120 a ton will be Essar's cost, plus they will have to take a ship load of ore they don't have the cash to buy…. what a deal! CLF's delivered price of $75 is why Essar needs to work out any deal to maintain their JIT inventory.
I will keep it simple for you, LG is in a great position to make the right choice here and it is a positive move. Face it, none of us here have all the information.
Now it is clear Essar did not think this through, if you breech the contract you had better have another source of iron ore pellets lined up. It is clear they don't since they ran to the courts. Can they wait out court action? I doubt it very much and it puts CLF in control.
So this is simply a power play on CLF's behalf, LG would have not done it unless he felt it would benefit CLF in the long run.
One disadvantage in running a JIT inventory system, the steel company kind of loses their leverage in a dispute like this. And Essar's overruns in their mining venture is contributing to their loss of leverage.
I should have waited until Jeff (oht) posted before buying, would have saved 7 cents! Live and learn! But I am still happy with my purchase, looking for strong volume on the buy side heading into the close.