I try to stay out of the earnings estimates, tried in the past and unexpected charges take me out of the game. So far the Lake Carriers Association have not posted iron ore shipment results on the Great Lakes for 2015 and I can't get a fair idea how much iron ore CLF has sold. If I was to pick a number for USIO, I would say 3 million tones at a profit of $25 a ton gives you $75 million. Add $5 million in profits from APIO and a loss of $10 million form US coal leaves a profit of $70 million. Then comes the charges, I don't have a clue.
Of corse I have nothing to do with it, none of us do, CLF is going to do what they want to do. All I am trying to do is figure out their thought process and right now I think LG wants to get debt down to $1.5 billion and the best way to get there is through bond purchases at a 25% discount to face value.
Buying shares have a risk, they can go up or down. LG is buying bonds at a discount and locking in the savings at the time of the transaction so it is a no risk investment. He is very conservative which is what CLF needs. I think everyone will be surprised of the results and will be a great model for companies to use to manage repayment of their long term debt.
Thanks, all of this stuff is public records and shorts don't focus on facts, they focus on words that cause fear in the market. Reuters gives the headlines about a lawsuit and CLF has not commented on it. Really, if they were real reporters, those public records is available to them to provide responsible reporting, but that is not what they are paid for. They are paid to throw out the words that cause fear in the market.
The SEC really needs to make large shorts disclose their holdings as well as any payments to media outlets and attorneys to file suits. Until the rules that apply to longs are not applied to shorts, we will have this problem forever.
Serious flack would be if the government would put an export tax on excessive shipments of iron ore out of Australia.
looking for the ownership of the BL mine itself. The only assets listed in the bankruptcy is all movable assets purchased by the BL Partnership. It list all the creditors and all the debt holders. The Bank of NS is one of the creditors that lent money on the purchase of some equipment that they retained for security and the BL Partnership is listed as the debt holder and no other security is listed beyond the equipment. At no point is CLF or Wuhan listed as a debt holder. And no other assets are attached as security so if their debt is not paid out of the sale of the security, the remainder of their claim is thrown into the unsecured pot to get their share.
So now the Bank of NS is going to try to get money from the parent company without a single document that they lent them money. Just throwing mud to see if it might stick. They are getting nowhere with their lawsuit in Canada, same will happen here.
Skittle, if you have a loan out on a car and only your name is on it, they will come after you. Since your parents did not cosign on the loan, they cannot come after them or impact their credit . Maybe you have never got a loan without your parents cosigning and don't understand how it works.
On the bond exchange they will not get the full $1.25 willing to exchange, I think they will be lucky to get $750 million offered. I never really understood this whole exchange in the first place and think getting the cash from a new bond offering and buying bonds back in the open market will give them more bang for the buck.
Off the top of my head on April 22 their total debt should be around $2.4 billion and their net debt (debt minus cash on hand) will be $1.9 billion.
According to bankruptcy filings, the Bank of NS is secured by the equipment and nothing else. Some of the equipment suppliers like CAT extend their security to cash on hand that puts them first in line for any unsecured assets that is available. But in all cases, it is assets owned by Bloom Lake Partnership and in any of the equipment loans the parent company, CLF did not sign onto these loans.
In the future, you can bet these banks are going to be more familiar with Canadian bankruptcy laws and will get the parent companies in the US to sign onto these loans.
According to the bankruptcy filing, their equipment loan was given to Bloom Lake Partnership and secured by the equipment purchased.
It is an equipment loan to the Bloom Lake Partnership and it was filed a month ago. Bank of Nova Scotia was trying to stop the extension the bankruptcy court gave Bloom Lake Partnership. It is no big deal and if the Bank wins a claim, it will be unsecured and will thrown into the bankruptcy totals. Will not increase any liability to CLF. Shorts will post it as a 'lawsuit" to build fear and CLF will not come out and explain it. It is funny, I was reading about this lawsuit a month ago, shorts are getting a little slow.
They are owed money on equipment assets for BL and they tried to stop the extension by Quebec to put a deal together prior to heading into bankruptcy proceedings. They just want their money from the sale of those assets now. I don't understand a lawsuit as it is clear what equipment they loaned against and they can't get anymore than what they sell for and any claims gained on a lawsuit is unsecured and they will get nothing except a bill from their attorneys.
A reaction to "adding" new debt and totally ignoring the fact they will have a net reduction in debt. Shorts will be busy spinning this as a major dilution and LG will not be presenting their intentions any further in the media. Business as usual and makes for good buying opportunity.
Looks what they plan is to buy back debt, not an exchange. LG sees the market discount of the existing bonds and wants to realize that discount now. He also know that in the open market that the 500K debt he issues today will worth less a year from now and he can buy those back at another discount. Also the previous bond exchange and extending it will create about $750 million in new bonds and this additional $500 million give you his target total debt of $1.25 billion which can be achieved through these bond repurchases and the sale of one or two assets. And that $1.25 billion of debt can be easily paid off by 2020 though interest savings and future tax advantages.
I am going to get serious on this topic, they will answer you if you have a soft question, they will not answer you if you are trying to tell them what to do. A soft question is like lishe asked, a hard question would be like, when are you going to close on BL?
You have to ask yourself what is a bankruptcy? To a short, it is just a word that brings fear to the market. But to a business it is that they cannot meet the terms of their financial obligations. CLF is generating positive cash every quarter from earnings and tax benefits after paying all interest cost. The nearest bond is not due until 2018 so their is no one demanding payment in full. CLF's current cash on hand is more than enough to pay the 2018 bonds when due. So as I see it, there may a slim 5% chance of bankruptcy and that is based on any possible legal action that would cause them to make a huge settlement or the price of iron ore falls to $20 a ton for an extended period of time. I see the odds of future gains on going long than taking a new short position at these current levels.