You forgot to mention their current inventories of close to $500 million which could easily provide CLF with $300 million in cash over Q3 and Q4 without taking inventories down to zero.
Share holders as the owners have a right to be aware of negotiations before a deal is made to voice their opinion on the offer before it is closed. After any deal is signed, there is normally at least 30 days before closing.
But what really bothers me is their failure to discuss how the coal mine sales are proceeding and it will really tick me off if they announce it the day before it closes.
The Courts are holding all bids as they have stated the confidentially of all bidders are to be maintained. The reason Quebec stepped out is more politically driven, but that is their choice, not the Courts.
Not really. CLF only needs $500 million from the sale of the coal mines, rails, port and Wabush and they could retire their entire unsecured debt load when combined with their salable inventories and cash on hand. And they could keep the BL mine.
Personally, I think they will get $250 million for the rail and port facilities, $50 million for Wabush and they won't sell BL. I have no basis for not selling BL, just that the asset value is so high, just can't picture someone stepping up with a serious offer.
We are talking about the rail and the port facility, PLUS 90 percent of the land CLF owns in the port area where the government can develop into commercial property around the port! This industrial park would mean big business and big jobs to the community and justify a fair premium price for the package.
And I understand that, it is just that dealing with Quebec, French is one of their official languages and you cannot ignore half of their publications. And like most politicians, they want their public to understand the work they are doing for them and you need to review these sources to get to the truth. Otherwise you are just getting a part of the truth that is printed in English.
Leaked? When dealing with Quebec, you need to be able to understand French because guess what, it is a dual society! So some of the articles in the public is in French and you need to read them all instead of making baseless posting here...
He is lucky he understands a little English, let alone a little French. I can read a little French, but rely on the computer translation for the exact wording.
At an average price of 60 cents on the dollar, they only need around $160 million to retire all of the 2018 bonds. They would be wise to do a balanced purchase of all unsecured bond to keep the prices from jumping up to fast. Then when the balance of the 2018 bonds come due and if they need cash to pay for them, they can simply sell some of the 2040 bonds back into the market to pay for them. But with the reduced interest cost, they will have plenty of cash to pay off any of their bonds in the future.
Normally used in acquiring land and paying "fair market value". Taking over infrastructure not so much and would result in years of legal actions. Plus Quebec is tied to the rulings of their own court in the CCAA which would cause them to appeal their decisions. Really, it is much more complex and $200 million is a much better deal that they would get their investment back in a very short period.
Yeah, I caught that "private interest" remark too. It is important that Quebec gets control of these assets now in order to bring these facilities up and running and get people in the area working again. I was concerned that Quebec would not follow through when it appears they are trying to push this through the courts now.
Since CLF has cost of $220 million, I would put the range between $150 million and $200 million. And since duplicating the infrastructure today would cost ove $500 million, the $200 million sounds like a good deal.
Rest of the article:
"This is a folder that follows with great interest", said the spokesman for economic development Seven Islands, Russel Tremblay. "We must avoid the mistakes of the past, it is a zone hyperstrategique for all the development of the Quebec and ca must no longer be controlled by private interests", he continued.
It should be remembered that the Port of Sept-iles and Cliffs Natural Resources have led a long legal battle to ensure that the mining gives access to its railway, the only one who makes up the multi dock, built at a cost of 220 million $. The Canadian Transportation Agency has finally decided in making public the portion of track in dispute.
In addition to a pellet plant (put on hold in 2013) and handling equipment of the ore, the mining is also owner since the years 60 of vast undeveloped land of the Pointe-Noire . "Cliffs used between 5 and 10 per cent of its land, supports Mr. Tremblay. Eventually, if we could create a provincial industrial park, ca would facilitate the attraction of promoters, who often want be near the port."
The judgment of the activities of Cliffs Natural Resources to Seven Islands and Fermont in January caused a commotion on the North Shore. The decision of the American company has resulted in the loss of 600 jobs, in addition to undermining an important network of sub-contractors, several of which have become creditors."
From leSoleil July 21, 2015, translated from French:
"(Seven Islands) Investment Quebec crosses one step further in order to acquire the facilities of Cliffs Natural Resources to seven-islands.
The society of State confirmed for the first time having nice and well submitted its offer to purchase within the required time limits of the legal process of liquidation of the assets of the mining giant, under the protection of the Law on the arrangements with the creditors.
"The offer has been filed, has affirmed the spokesman of Investment Quebec, Chantal Corbeil. It is now up to Cliffs of the watch." interested investors both by the facilities of the Pointe-Noire to seven-Islands or the iron mine of lake Bloom, near Fermont, had until 16 July, 17h, to present their proposal.
The Crown corporation has in its sights the strategic assets of the Pointe-Noire , especially the railway Arnaud who connects the trace of QNS&L to the new wharf multi from the port of the Seven Islands, one of the cornerstones of the deployment of the Northern Plan."
I watched it drop this morning from $3.40 to $3.10 then back up to $3.30 and now back down to 3.16. Time to pick it up again of another trade. Just not enough active shorts to keep it down.
If you trade in and out of this, you can make this work in your advantage. Shorts no longer have the fire power to take this down over an extended period of time.