Outside of asset sales and earnings, this company has enough cash coming in to pay down their debt by $1 billion by the end of 2015.
He needs to buy as many bonds as he can now. After asset sales start coming in, the price of these bonds will rise.
MFC is not listed as a creditor, if they want to buy, they are going to have to come up with the cash. If CLF pays the $750,000, they can dismantle the whole mine, MFC will need to come up with a deal ahead of that to keep the structures whole.
CLF is required to pay $750,000 to keep the lease current. They will have to pay it if they have an offer to buy the Wabush mine. If there is no bidders for the mine, CLF will not pay that payment which would trigger MFC to buy the mine at current market value. Keep an eye on this lease payment.
Ruled against MFC on all counts, what I found interesting is on page 3, item 9.
The SISP has received several offers and liquidation offers. The need for 3 months to review these offers and work with all parties concerned.
There is more to it and I could not copy and paste it here, just pull up the court orders dated July 30. It is clear that MFC is going to have to bid against others for the Wabush mine.
Ok, I will try to keep it down to simple math. If you are paying 55 cents on the dollar for bonds and you want to buy $100 million at face value, you have to come up with $55 million in cash.
dupe, when assets are discontinued, the value is written down to zero. When they sell the asset they get more than zero which will be used to pay down their debt of $2.8 billion and will have to record income of any amount they get off the sale. Also you have to realize that $2.8 billion is the face value of the bonds, CLF will have to spend around $1.9 billion to retire this debt at market value.
song, yes that is exactly what happen. Would not surprise me if we see an announcement on a mine sale next week and CLF buying shares to remove them from the shorts as the asset sale will cause the shorts to cover.
Or it could be that buying back $100 million in bonds will cause the debt to be upgraded and the interest rate will fall back to the 3.95%.
Last time the purchase was much bigger, appears to keep it small, less impact on the price of the bonds. Just needs to do this a couple times a year and the bonds will be paid off.
You are off base, anyone going into bankruptcy wants to add debt not remove it! If you are going to write off debt, the more the merrier. Most smart people I know that head into bankruptcy max their credit cards out ahead of filing to get the most out of it. I guess you and Jeff just don't fall into that category.
Mr. Gonclaves is only throwing $55 million at this, that still leaves $110 million left from the tax refund or we may see further bond purchases with asset sales. Anyway this bond purchase tells us that CLF is fine with their current cash standing.
According to their last 10Q, the interest rate is 3.95% with an annual effective rate of 6.22%. There currently is a outstanding balance at face value of $434 million.
Last time he did this was ahead of announcing an asset sale. We could be hearing something from the met coal area.