Do you want to understand the bankruptcy process or why a stock trades where it does?
Wuhan Steel total claims from FTI is $2,741,437.
"CLF does not have to sell BL, they want too". Really, they can manage their debt fine without the sale and with Quebec participation and elimination of certain liabilities they can continue to operate the mine at break even or better.
From: Republic of Mining:
"But Plan Nord took a big hit on Wednesday, when Cliffs Natural Resources said it is closing its Bloom Lake iron ore mine after struggling to secure funds to expand the mine and make it viable. Chinese steelmaker Wuhan Iron & Steel owns a minority stake in Bloom Lake.
Bloom Lake, one of three producing iron ore mines in Quebec, would have become a major customer for a railway line being considered under Plan Nord.
“Without Bloom Lake there’s no Plan Nord,” Cliffs Chief Executive Lourenco Goncalves told Reuters. “Without the mine, there’s pretty much nothing for Plan Nord to transport from point A to point B.”"
"Quebec Finance Minister Carlos Leitao said in June that his government would revive the so-called Plan Nord, a strategy to tap mining and energy resources north of the 49th parallel that the previous administration halted in 2012.
Former Liberal Premier Jean Charest unveiled the plan in 2011, promising C$80 billion of government and company investment by 2036 in an area twice the size of France. Arcand said last year that the program’s scope would likely be much smaller.
Investissement Quebec had investments of about C$2.7 billion as of March 31, according to its 2013-14 annual report. Its holdings include loans and a stake in Quebec miner Stornoway Diamond Corp."
I could go on, just pull up Quebec Plan Nord, Bloom Lake.
They will see 100% of the sale of the mine and all of the $10 million they lent the CCAA. They won't see a dime of the sale of all the other secured assets. Then they will see a percentage of the proceeds that go to unsecured creditors as the balance of their secured loan gets thrown into the unsecured pot. Bankruptcies and reorganizations are very simple.
It will sell for what it is worth. If they can project that the cost per ton will be $40 and they can get $60, the price will be based on the reserves times the profit and take that number and cut it in half. I don't have that information, but you can bet those bidding on will. All I know is if you buy the mine for a quarter of what CLF did and with Quebec's participation, the cost to produce iron ore will be $50 a ton less than where CLF was.
Without BL, the rail system and dock facility, Quebec's investment in the area will go down the tube and many more mines will be shut down. They must make this happen and with their support, the new owner will be able to compete with the Australians in the world iron ore market. By purchasing BL at a quarter of what CLF has into it will cut their production cost in half. Then with Quebec's participation, they will see another $20 a ton cut in their cost. Super cycle cost of the mine was $5 billion, today it could be $1.25 billion.
The new secured bonds that they have issued can't be bought back at this time. There is something like a year out that they can be purchased and I think they have issued something like $900 million of them to date. So that leaves them the unsecured bonds that they can buy back at a 50% discount. With $900 million, they could retire all of those bonds and be left with the $900 million in long term debt. Then if they buy back shares, the appreciation in those shares would be enough to pay off the balance of their debt a year from now.
from the sale of Canadian assets? We know that any bid, you can add 20% onto it from Quebec to make the sale. So what do they do? Buy back debt, common shares, CLV shares or a combination of all? A sale announcement on Canadian assets is coming after CLF comes off after the blackout period for CLF to buy shares. Was that by design? I say there will be a huge purchase of shares by CLF when they know what they will be getting.
Yes, there is somebody out there that understands the signs leading up to Q2 earnings and final resolution to the the Canadian affair.
As someone pointed out the reduction in the float, there is a quite accumulation happening here that is setting up a short trap. Then Jeff will learn what drives the price of a stock.
Again, nothing as I see their current iron ore shipments increasing. The decrease is coming from ore they were selling at a loss, so by stopping those operations their net income increases. Do you even understand how a balance sheet works?
Immediate growth is going to come from the selling of assets as they pay down debt and that interest expense is going to be added to income providing them as much as 100% growth in income. Once that is complete, future growth will come from DRI.
Again, this is a prime example, tell me how they can go bankrupt. Show me their obligations and the date they are due to cause this action. Show me the shortfall in income and cash where they can't service their current debt. Bankruptcy means they can't pay their debt that is due and since the nearest debt due is not until 2018, they can be bankrupt on that right now. And if you look at their annual interest expense of $160 million, you have to look at where that money will come from to service it. Some of that interest expense is CLF paying interest to themselves with the bonds they currently hold, so you have to go to the interest income on the income statement to get a true picture of their real cost. And at current iron ore prices, CLF is generating enough cash from continuing operations to service the current debt interest. Finally, they currently have enough liquidity to pay off all debt that is due in 2018! So now, tell me how they will go bankrupt!
All I ask is for people to provide the simple facts to back up their statements, nothing more. For example the constant bashing of CLF's debt. The facts are their current debt is very manageable today without the sale of a single asset, thanks to steps the current management team has taken. Then you have all that don't understand the whole impairment charges and use that to skew their income data. For me, I believe in the current management and their results can be seen in the income statements since they took control.
that day in and day out bash CLF with totally meaningless statements. Then you have the ones that will act like a long and then change the next day to appear like the longs are bailing. Again providing no quantifiable information. Most of the current wave have been born on Yahoo over the last month.
None of these post impacts the price of this stock. I know it is hard to ignore them but it is best just to ignore their postings and let them talk between their multiple id's.