PRC is worthless....what's the point ?
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are you sure about that,Roger? He just said,for arguments sake, that NZO might have some inside information
I hope so. I would speculate if NZO came out to the market and declared that the money they've just "donated / funded" was full and final and they're not investing any further funds whatsoever in PRC the share price would react very favourably.
The mine is finished, that's almost certain and who in their right mind would back this company for maybe circa $100-200million even if they were allowed to re-open it. Certainly if there is the faintest of hope there's some ember of value left it'll only come from an overseas company that actually knows how to extract coal in a timely, efficient, effective and safe manner.
The market has spoken loud and clear and wiped the full value of the investment and funds advanced to PRC off NZO's share price, (my calculations were that resulted in a net price of 93 cents) and its below that by a small margin primarily because in my opinion the market is rightly concerned about the ability of NZO Directors to make truly objective commercial decisions.
In my opinion, NZO need to concentrate on what they're good at doing and stop wasting valuable cash flow on this bottomless pit.
Interesting that Chairman has come out and stated PRC aboslutely believes the mine will operate again.
http://www.stuff.co.nz/4420000/Pike-...-operate-again
It's one thing saying that the mine can re-open, that might well be possible. But whether that implies there is significant value in current Pike equity holdings is another question altogether. I guess there is value in the consents, above ground plant and development and the tunnel - but when the costs associated with the disaster are offset against this I suspect current equity holders including NZO have done their dough. But perhaps there is an opportunity for NZO and the other holders to invest capital in "PRC2" or whatever takes its place.
Maybe there's some sort of happy pill dosage in the water down there, I'm sure you remember another iconic South Island company who's Chairman and CEO were saying almost exactly the same thing when the answer was clearly the opposite. (Balance will know who I'm talking about but for the sake of absolute clarity to anyone new to these blogs that is South Canterbury Finance).
Of course the MD and CEO would say that wouldn't they...are you losing your bloodhound ability to smell corporate B.S. ?
If so, just look at what happenned to NZO's share price and crunch the numbers, its clear the market thinks the value of existing PRC equity is a single round number and if PRC directors think the market has an appetite for investing in another major cash issue after all the broken promises, just have a look at where Wellington Drive Technologies are having to pitch their latest cash issue and that's for a business that's actually operating !!
Although its a different industry WDT's cash issue at 1.25 cents is a very good example of how severly the market is currently punishing companies that are repeat offenders when it comes to failing to perform and breeching promises. Should that read, punishing existing equity ?
So it begs the question, if there is a cash issue forthcoming, where would they try pitch it and who would be brave enough to underwrite it ?...oh of course, silly me, the answer to that is quite clear and its why their share price will remain under pressure until this mess is finally brought to its almost inevitable conclusion.
ROGER, The WDT sagga is directors on hugely inflated salaries screwing the gullable for as long and as much as they can. I think PRC started off making huge expensive mistakes, one example being the transport by barge fiasco. The directors were under extreme pressure to get it up and running faster, and bigger to satisfy the expectations of the share holders. In situations like that corners get cut, mistakes can be made, with the expected being taken over by the unexpected.
Surely in this day and age all power should shut down if gas or dust levels reach a certain level. After the first explosion the time window would have allowed a rescue attempt to get in and out with a report on survivors or what ever. This decision was made by a bloody police man who gave what ever remote chance of survival a kick in the guts. I should think the directors should take huge wage cuts in the short term if they want credability to reopen the mine. On the other hand if they dont then they can join the Directors From WTD and keep it going as long as the gullable keep forking out money to squander. Macdunk
Seems the chinese are sniffing around just on the radio maybe a saviour nzo to sell to them ?