Sell PGWF ? Maybe not. . .
Quote:
Originally Posted by
biker
Interesting that in the media brief, they were particularly emphatic that none of the latest arrangements put any impediment in the way of selling PGWF at any stage.
I think there is more to come on this down the track.
MARAC/PGWF/CBS/........Banking license/registered bank ?
Um. . . . . didn't they sell the finance arm once before ?
So, having gone back into finance, why would they sell it again ?
Wouldn't it make more sense to glue a bank together out of Marac, SCF, and PGWF ?
PGW's Debt Problem Solved?
Quote:
Originally Posted by
geezy
PGW just gotta solve their debt issues and looks like they did :) looking bright :) i m in
Did you check out the "Simplified Disclosure Prospectus" that got sent to shareholders Geezy?
If you go to page 52 you get the prospective financial statements as at June 30th 2010, which is after all of the current capital raising is done and dusted. On page 52 PGW list their projected income for the year at $24.1m.
If you then go to page 55 , I calculate the short and long term debt liabilities (excluding PGW Finance, which are liabilities backed up by customer borrowers assets) to be forecast as follows:
Short Term Debt: Nil
Long Term Debt: $185.269m+ $13.68m + $0.799m= $199.7m
The minimum capital repayment time is therefore forecast to be:
$199.7m/$24.1m= 8.3 years
I would class that level of debt, relative to income, as medium to high. High enough to be told that we as shareholders will have to forget about getting paid any dividends for a while.
PGW have done enough to stave of the banks. But if PGW have a few more bad years they may need to go back to shareholders again for more capital. I would describe the current capital raising as a 'patch up job', rather than a long term fix.
SNOOPY
discl: hold PGW, and have taken up my rights (and then some) under the assumption that the patches have been put in the right places.
What Price did Agria pay?
Quote:
Originally Posted by
Snoopy
If you look at the post recapitalisation substantial shareholder disclosures for PGW, RPI disposed of 87,017,180 rights for $4,439,519.50. That equates to only 5.1c per right.
The reason I am being a bit pedantic about this is that IIRC, RPI agreed to sell some of their rights to Agria as part of the book build. Agria will have done more due diligence than any of us on PGW. So I think it is worth working out what Agria considered it was worth paying for their total stake in PGW.
Agria started out with 41.1m new existing shares pre-rights issue bought at a price of 88c. This entitled them to 46,237,500 PGW rights which they subsequently took up at 45c. They then purchased more rights (at 5.1c?) which resulted in them acquiring 56,767,180 paid up shares at 50.1c.
If I am right then the average price that Agria paid for their PGW shares is:
[(41.1 x 0.88)+(46.2 x 0.45)+(56.7 x 0.501)]/[41.1+46.2+56.7] = 59.3c
Granted there may be a 'desperation discount' in there as PGW was in grave need of the cash. But even if the desperation discount was 20%, that would still equate to a fair value market price of 70c. That doesn't leave much capital gain potential for our 'conservative investor' buying in at 70c does it?
SNOOPY
discl: hold PGW
Sobering Long Term Reflections on PGW
Quote:
Originally Posted by
Snoopy
If I am right then the average price that Agria paid for their PGW shares is:
[(41.1 x 0.88)+(46.2 x 0.45)+(56.7 x 0.501)]/[41.1+46.2+56.7] = 59.3c
I have just done the above exercise myself to find out how much my own PGW shares owe me. I know that I shouldn't have done it as these historical exercises are largely meaningless from a future performance perspective. But I have calculated that each of my PGW shares now owe me 80c. Ouch! So I have lost capital, even if I haven't lost money (as some traders might think). I estimate that dividends received over my time as a shareholder equate to around 50c per share (allowing for the recent recapitalisation). And what timeframe is that?
Believe it or not I have been a PGW shareholder since 1995, so that is 14 years. Of course back in those days I held only a very few shares. Most of my shares were bought and/or taken up around the time of the rights issue a couple of months ago (a very good move) and prior to that in late 2006 and early 2007 when the Norgate steamship seemed unstoppable (not such a good move, with the benefit of credit crunch hindsight).
Overall I do not regard my overall investment performance in PGW as satisfactory. But having nailed my mast to the Norgate steamship in recent years I was always going to go where the Norgate ship went, and take the rub off from the consequences - be they good or bad. In one respect I have come out relatively well. And that is I think my own average PGW share buy price is (now) rather lower than Norgate/McConnan paid via their vehicle RPI! But I am certainly not bitter about anything that has happened. I have taken the big slug across the chin and moved on. Not from an ownership perspective you understand. I now own more PGW shares in number and percentage terms, even allowing for the recapitalisation, than ever. But I have moved on from that vision I was looking back on in the rear vision mirror.
Part of my long term investment strategy is to stay plugged into the backbone of the country in some form. I am open as to whether owning shares in PGW is the best way to do that. But when I look at some of the alternatives, like Allied Farmers or some of those meat company shares over the years I don't think that investing in PGW has been a bad choice even if the result (so far) has not been that great.
With some 758m PGW shares now on issue it is fair to say that however well PGW does, those events will move the share price less than half what they would have pre-recapitalisation. In a post credit crunch world, $1 a PGW share is now a distant dream. I would be very surprised if any shareholder on the register now will be alive to see it. Still that doesn't mean there aren't some good dividends to be harvested in the next few years, which is why I intend to hang around on that PGW share register.
SNOOPY
discl: hold PGW