I suspect it's to align with Arbogens. I read it once. Can't remember where... I wonder if there will still be a market update prior to June 30?
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Simple enough thing to explain to shareholders then?
The arrogance of this remnant of the once proud and mighty Fletcher Challenge group beggars belief - especially when one considers that Hugh Fletcher is still on the board, the very same CEO who ran the group into financial stress and eventual breakup.
Hopefully my cautious optimism for Rubicon is not misplaced with this latest announcement. They have committed to an announcement to the future direction concerning Arborgen by June 30th, to not do so would be extremely unwise. I await the market reaction, still tempted to buy more.
Arborgen's balance date is 31 March according to the latest Rubicon annual report. It's possible that may have changed too to better match their sales and collection cycle which would be understandable.
I'm sure we'll have a market update, probably on the deadline date, if only to say everyone is very busy and consultants have been engaged!
fairy nuff
History shows, going back to Fletcher days there has never been huge windfalls for share holders on sell off's. The longer this goes on the less confident I am....perhaps they will sell Arborgen on an equivalent Grant Samuel valuation too....I mean 'what share holders'.....
I'm I the only one that thinks a sell off would defeat the purpose of nurturing this beast? Quite keen on keeping my share of a company that dominates a world industry. Money does grow on trees!
Or will...
Soon...
hopefully...
We have a new director, one David Knott Jr, who according to the Companies Office website was appointed on 24 Feb 2017. New blood at last. I hope he's bright. Now there are seven directors so the chance of deadlock is reduced.
Did I miss the NZX announcement?
I think that is the case however we should really wait for the company to explain.
Also, over the past year Accident Compensation Corporation has reduced its holding from 17.33m to 12.57m shares. Not exactly a ringing endorsement of Rubicon's performance prospects. Perhaps they got wind of the board expansion and decided seven directors was over the top for a sub-$100m cap company? It's a shame they're heading for the exit as it will weaken the position of loyal NZ shareholders as US muscles gets flexed.
I can't argue with that although I'm unsure what your point is. She'll be right?
I think NZ shareholders are pretty vulnerable to be taken to the cleaners on this one. I hope I'm wrong but seeing a well-resourced institution moving on means warning bells to me.
Cheers.
Doom and gloom? I find the lack of ongoing information on this company quite frustrating. Management help the situation none by keeping shtum. None the less, I have followed this company for a very long time, only recently buying in. Loss of faith due to loss of patience is the only real doom and gloom story here as far as I see. The 'Rubicon has been crossed' and I suspect things are poised.
I'm very interested in the effect the change in reporting date will have in the next Annual Review as this should now include full turnover from the latest selling season.
Cleerwood was picked up rather cheaply as far as I can make out. Although it's not a great turnover it should provide a bit of feed for the winter months.
The question will be, now that the cake is mixed will it need a cash injection to get it baking? With the loss of faith in the company that may be difficult...
Still, I think it is not 'if' but 'when' with this one. Now that I've thrown some change at it I'm hoping in the next year or two rather than 10...
That said t.rexjr....what are your thoughts on Arborgen? I might add I have held shares since 04' and currently hold in excess of 200,000, so I am very keen to see a tidy profitable exit.
My thoughts on Arborgen?
It's all very vague isn't it. It has stupendous potential that may never be realised. I do like this excerpt from Decembers Interim Review though...
[QUOTE]ArborGen should remain on track to meet its EBITDA break-even target (including the full expensing of all product research costs) in this current fiscal year. Although it has takena "little longer" than we would have hoped, this is an important milestone in ArborGen’s life. It has built the leading technology and global commercialisation platform in the industry. It is now producing in excess of 340 million seedlings, per annum, globally, and has firmly established a new core commercialisation arena in Brazil. It has also largely passed through the heavy product development spend phase, and past EBITDA losses,which peaked at circa US$18 million per annum, are well behind it.[/QUOTE]
I think many people didn't stop to ponder that this industry is a long term industry. 15 years to grow a tree. It was never going to be booming over night.
Ask me in two years time...
Your comment understood now, thanks.
I find poking around their website eg http://www.arborgen.com/about-arborgen/ it's quite easy to believe in the Arborgen story. Lots of bright committed folk leading the business and we can't argue with the worth of their science. So while I have some misgivings about Rubicon's governance I have been accumulating RBC lately although unfortunately not in such scale to soak up ACC's unwanted stock. Keep the faith.
The lack of communication by this company to its shareholders condemns it. Lack of information concerning its strategy and absence of any response in share price following purchase of Tenon's NZ assets speak for themselves. One cannot help but think that management are acting for their own interests!
The Tenon price appreciated over the past two years plus payment of dividend while RBC steadily deteriorated even while Aborgen supposedly improved its position.
So is the Tenon asset so bad that the RBC price should subsequently decrease, or is it Aborgen's performance? Who would know (other than the directors of course) because there is never any market update. This company behaves like it is a private company and not a public one (apart from observing the NZX's minimum requirements).
I'm in it for the assets.
Capital returns (71 (first capital return) +43 (second capital return)+ 5 (yet to be paid) = 119 x 0.6) = $71.4 USD - 20USD debt repaid earlier. 51.4 USD left, equals 71.5 NZD in Rubicons bank account.
Clearwood valued at $55 US, 50% equal 27.5 USD or 38.25 NZD.
= Cash 71.5 + Clearwood 38.25 - $26 (50% kept interest) = 83 million or 20.5 cents per share, not even counting arborgen.
Conservative Arborgen value. I've looked at Sygenta, Monsanto and Dupont
They all seedlings producers (though do produce other stuff too) and all trade at least 3 times sales. Arborgen's current sales are 40 million USD, given RBC own a third it would be worth 40 million to them and is equal to 55million NZD. I think this valuation is conservative enough.
Add 55 to 83 and we have 138 million valueNo matter how you look at it RBC is undervalued.
The arborgen value I prescribed is just a conservative approach and I do believe it to be worth much more, though with barely any info to go on its hard to value them. The point of the exercise was to point out even with a management team thats not responsive to shareholders we can be assured that the company is safe in that its back by its assets.
SilverB, I think your starting cash is too high but I agree with your point. (did you deduct what R have to pay for the share of C? Somewhere I read the net effect is $10m, not $43)
This appears to be similarly run to the Perth mining lifestyle companies (directors lifestyle, not the shareholders)
Yeah we're a bit off in those workings:
At 31 December the Group held cash of $24 million (Rubicon $22 million, Tenon $2 million), bank debt of $2 million (Tenon) and outstanding subordinated Notes of $7 million (Rubicon).
Clearwood sale was supposed to be a net profit of $10 million
This would mean current cash would be around $25 million
50% of Clearwood value ($55) $27.5 million
And whatever value you want to place on Arborgen…
The Clearwood settlement was that the consortium would purchase the whole business for $55 million as noted in the statement: "purchase price is US$55 million payable in cash", from that arrangement RBC will get 50% of the purchase and I assume an arrangement to pay the loan made to arrange the financing before they got the capital returned. The net effect would make them $10millon US.
Out of the purchase price Tenon debt was repaid and $48.8 million left, of that "capital return of US$43 million be made to shareholders on closing....... return of all residual surplus funds (currently estimated to be a further US$5.8 million approximately) to shareholders. " 60% of 48.8 is $29.28 million US, - minus 18.8 of interest kept and fees then yeah about $10 million better off.
https://www.nzx.com/companies/RBC/announcements/296743
IMHO patience is needed with this one. RBC has always said that it's goal is to, "determine (a) risk adjusted path likely to close the share price value gap." (financial gobbledygook seeming to say they agree with SBuzzard that RBC's SP is too low.)
The recent aligning of RBC's FY balance date with Arbogen is no doubt part of this process, and RBC for obvious reasons is carefully crossing t's and dotting i's before it makes any announcement to the market re what lies ahead for holders.
I'm hoping for an announcement by late July and some clarity after that.
All holders can say at the moment is that they are 'well positioned" .
I note there has been some life in the TEN SP and find this interesting......anyone have any views on what may happen here?
Actually I've made a error around the clearwood part, need to deduct $18.8 million for clearwood interest they have kept. Apologies.
To clarify summary:
Dec 31st postion: $22 million
Net effect of Clearwood: $10 miilion
Clearwood: $27.5
= USD 59.5 ($82.57 NZD) still relatively near market cap currently, not factoring in Arborgen
Morningstars Research report just updated yesterday states RBC's equity at $197 million or 49 cents per share.
http://quotes.morningstar.com/stockq...nh-rQ7zu9_bHzQ
Obviously nobody has much faith in Morningstars report.
SP still hovering around 22c.
Me i had a small dabble.
Hopefully the wait for news that sets the sp on fire is not far away.
Should be interesting to see if they do keep their promise to the market.
I suspect they may be dusting off Tenon's announcement of a year ago when they too had promised an update by 30 June on their strategic review:
STRATEGIC REVIEW UPDATE 30 June 2016 - By way of market update, Tenon said today that it anticipated it would be making an announcement in respect of the outcome of its Strategic Review process either in conjunction with, or prior to, the release of the Company's 30 June 2016 financial results.
After all when there's a ready made template what more is needed?
Incidentally, still waiting for a market announcement on the appointment of the new director, Mr Knott Jr.
Rubicon acquires US-based ArborGen Inc
https://www.nzx.com/files/attachments/260809.pdf
-thats a really good deal, practically a steal for RBC on its partners
Excellent news. Now we can look forward to some clear reporting and progress for RBC. Well done to directors and management for holding out for this deal.
22 cent wall has been demolished
Mr GORBACHEV...Tear down that wall.
This is just as momentus.(i hope)
Wow this is huge. Exactly what I was hoping for but was doubtful it was possible. Is it too early for a beer?
Crazy people selling for 23c. Wasn't planning on buying more... hmmm...
Presumably some fund or funds (ACC, Third Avenue) still wanting out which means there could be a few million more to clear yet before a new SP floor is established. It's a much clearer picture for investors now however so brokers might begin to give it a kick along. Best get in before that happens...
Perhaps full impact of news has not filtered thru, but I would have thought more of a lift than 1.5 cents.......
So yesterday:
Shares on issue 409,051,378
50% of Clearwood $27.5m ($55m)
31.7% of Arborgen 31.7m (random valuation of 100m)
$25m net cash equity
Total asset value $84.2m (USD)
0.2058 cps asset value (0.28 NZD)
Today:
Shares on issue 487,908,378
50% of Clearwood $27.5m ($55m)
100% of Arborgen 100m (random valuation of 100m)
$8.5m net cash equity ($25m less remaining 16.5m cash due for purchase)
Total asset value $136m (USD)
0.2787 cps asset value (0.38 NZD)
35% gain in asset value per share
This assumes that the remaining $16.5m not funded by share placement is to be bank loan (or even better paid in full from yet to be announced capital from the unreported 15 month period to Oct 17’)
Either way I like this
Asset values used are somewhat meaningless in my example. It’s very much educated guesswork. My interest is more with the % of asset gained per share.
I feel $29m USD purchase price of the remaining 68.3% is exceptional buying
Feel free to rain on my parade and point out flawed logic…
Net cash movement for 30 June is 1.5m going out (14m for first tranche less 12.5 for share issue) with 15m left to pay in the other 2 tranches.
Not sure whether you have included the share issue cash anywhere? - is it in the 25m figure?
Will they now IPO Arborgen for 300m?
at 23 cents, they appear to be at 50% discount to underlying value on the numbers being bandied about
Will take the market (cynical as ever) a while to digest the fact that the announcement is a real game changer. I have been extremely critical as well of the way the Board has been communicating with minority shareholders regarding the change in balance date, but I do think that this goes some way to explaining why they changed the balance date without explanation at that time.
Those of us who attended the Tenon's AGM this year and listened in on the lengthy presentation by the Board of what Aborgen is about and where it is headed will be very comfortable with this move. RBC is on its way to realise the potential value of Aborgen.
A figure of US$100m was mentioned as conservative (from memory) so that's 33c per share plus Clearwood.
Yep, I see how you've done it now.
still at a 50 % discount with the values bandied about for the 2 assets. As Balance says, conservative...
Rubicon must be SCISSORS.
There partners are called International PAPER
and WestROCK
So I guess next time you play paper, scissors, rock......choose scissors!
Cause they really know how to cut a deal.
This from Rubicon's last report (Dec 2016) re ArborGen
Despite the flat US production performance noted above, the expectation is that total ArborGen’s revenuewill lift by 12.5%+ year-on-year, to over US$40 million, aided by the growth achieved in Brazil and the increasein average sales price to be recorded in the US.
The end result of the above is that ArborGen should remain on track to meet its EBITDA break-even target(including the full expensing of all product research costs) in this current fiscal year. Although it has takena little longer than we would have hoped, this is an important milestone in ArborGen’s life. It has built theleading technology and global commercialisation platform in the industry. It is now producing in excess of340 million seedlings, per annum, globally, and has firmly established a new core commercialisation arena inBrazil. It has also largely passed through the heavy product development spend phase, and past EBITDA losses,which peaked at circa US$18 million per annum, are well behind it.
It will be good to see a market update soon.
Brian Gaynor said last year that Rubicon should be liquidated.....even more so now!
We're yet to see the set up but I'm assuming Rubicon board would be the only board. Effectively 100% of Arborgen was floated today. I'm willing to wait for the market to figure out exactly what that means. Personally I feel a few years in this structure can only benefit due to the transitional status Arborgen is currently in. More will come to light come the end of the reporting period but I'm perfectly happy with current structure. I was born to boogie and gonna ride this white swan with the other children of the revolution!
Yes, presumably IP and Westrock had reps on the Board of A, along with Moriarty and Burton from R, so we should see a reshuffle. Explains why Knott jnr was appointed too I guess.
Time to 'get it on'
This is a much better outcome than I had been hoping for, even better than I had feared. To have reached an outcome which satisfies not just one but both of the other partners in one swift manoeuver is very sweet indeed. This is something that has been in the offing for a long time and I'm pleased that patience and perseverance have been rewarded.
I hope that control can be retained by Rubicon as an NZ domiciled company with Arborgen managed by local board as at present. Inevitably control will move to the US to satisfy new investors when an IPO is planned. In the meantime I too am content to see this truck along for another few years before going for the big payday.
A couple of more years,say what.
Zimmer frame and spectacles will have become the norm by then.No more hair left to pull out.
That's it - SELL!
2016 report:
New Debt facilities put in place
• A new 20-year term loan facility of $13 million, was established with AgSouth
• The existing NBSC bank relationship has been extended out to August 2017, with a $15 million working
capital line
• Funding lines of $28 million are now available to ArborGen in North America
• Australasian operations are funded by a NZ$4.5 million facility, expiring in 2018
Hi everyone,
first time poster but I've been lurking for a few weeks. Have made one purchase back in February of Atm and now have another small injection of available funds and have found this share interesting. I've read the thread from the first page but have no real understanding as have just started this journey. This money is completely expendable and I'm not risk adverse and I know you have to dyor but would any of you or have you had another dabble at the current sp.
thanks in advance
Elsewhere in the same report there is text which states
" During the year, AgSouth was brought in as a
new relationship bank, with a 20-year $13 million term loan."
So that seems clear long term debt. Their other facilities will be being utilised according seasonal needs.
Extract - The Company said that there are warrants and options outstanding representing approximately 10% of ArborGen’s share capital. “Grossing-up the purchase price for those, and for ArborGen’s normalized debt position, implies an enterprise value of circa US$100 million,” he said.
So $29m for the 70% odd not owned and EV of $100m sort of implies debt of about $50m (taking into account warrants etc)
That's how I see it
Decided to join you guys @ 23c .... be great to see the Buying pressure push towards my swing trade sell
T/A looks positive through 30-60 MA
I was following Rubicon in the past and didn’t follow much lately. Do they have a strong case for a turnaround situation? Thanks.
I think so ...as I'm planning on a ST trade T/A is much more important (will need the funds for other purchase next month)
As others have stated the latest news is very positive ...being able to raise a good chunk of cash close to SP is always a bullish sign IMHO ....
As we can see from the "depth chart" the Bids far outway what's left on market to buy >>>
Attachment 8953
Personal think this will move to the upper band of the 1yr trading range 20c-26c (and have fixed my sell order to suit)
Anyone have thoughts on the allocation of new shares today?
The larger of these two investments came from Libra Fund LP, now holding 17.64% of RBC, which is owned by Mr Ranjan Tandon. He recently donated $US100m to New York University and is worth a google search.
Presumably he's not supporting Rubicon for philanthropic reasons and can see value in Arborgen's business.
https://nzx.com/companies/RBC/announcements/303524
Has any members got access to the NBR paid content.
Headline in there todays says
COMPLEX ACCOUNTING IN BIG VALUE GAP FOR RUBICON.
Rest of Arborgen acquired for US$167 mill below carring value.
In summary, Rubicon's 31.7% stake in Arborgen is in their books at USD91m yet they picked up the other 68.3% from the partners for only USD29m. This implies a disparity, however Rubicon says because they had pre-emptive purchase rights the transaction was not completed at open market value. Consequently RBC's accountants and auditors will now need to spend several months working on what new valuation should now be given to the business. Significantly Rubicon does not anticipate a material change in its accounting equity to occur.
A positive confirmation that looking ahead past RBC balance date in September and Arbogen in March the RBC share price at around 23c is grossly undervalued.
The realisation of value in RBC has taken an awfully long time but it is now picking up momentum in the right direction. A way to go yet and more patience required but a clearer way forward is now more evident than ever.
The market doesn't want to know about it as yet but it eventually will.
At 23c the reward/risk ratio is a rapidly growing number.
All IMHO of course.
Buyers want on board but don't want to stump up another half a cent !!!! ..new valuation should be much higher than what the slow NZX seems to want to kick into gear.... No divi - No interest it seems ....Is NZ investors so yield focused ?
We kiwis certainly love nothing more than to leverage to the hilt into overvalued Negative geared property investments
Attachment 8969
I'd like to be excited by the purchase of Arborgen but given the lack of new information it's hard for me to see how RBC is actually undervalued.
Has anyone out there actually ever seen financial reports for Arborgen? All I've ever seen is the executive highlights in the annual report. And reporting date has been shifted out to September so that's 3 months longer to wait.
And we're supposed to believe that Arborgen (and hence Rubicon) is worth loads more than RBC just paid for Arborgen? This doesn't make sense to me. Am I missing something?
Well if you want to debate valuation heres 180 page case about it from the court proceedings at the end of 2015, all info from insiders of the company in a court of law.
http://globaljusticeecology.org/wp-c..._decision1.pdf
There was this quotation
"Under Defendant Burton's analysis, an ArborGen valuation in 2010 of $420 million"
Valuation expert: "Mr. Pomerantz's opinion was that the worth or equity value of ArborGen as of June 1,2010, was $650,000,000"
"Rubicon's presentation to its shareholders in December 2013 represents the value of ArborGen to be $660 million."