see PRC refer ASX Trading halt details NZO places PRC into receivership
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see PRC refer ASX Trading halt details NZO places PRC into receivership
Hmm surprised SP has dropped, i would have thought that was good news for NZO, increases chance of getting some money back at least?
Given that NZO had said earlier that they wanted out of PRC as it was non-core business, I assume they will simply try to recover what they can from “secured” loans and won’t take part in the next recapitalisation of PRC if and when that happens. If that is the case, then NZO is oversold if you agree with the pre-explosion valuation of PRC to NZO.
What a sad end to 14 years of trying to get pike up and running.I never would have guessed the final outcome would have been the blowing up of the mine.I probably was the strongest supporter of NZO sticking with PIKE but in the final an-alys it just turned out to be 100% wrong. Amen
now forever and a day there will be inquires.
With NZO appointing the receiver,means receiver works for the benefit of NZO.
Agreed, BUT I'm on record as questioning the Directors commercial independence making what at the time I was and still am adamant amounted to a $12m donation to PRC when the writing was clearly on the wall.
The Directors admitted that further advances under the $25 million funding facility could have been stopped, i.e. there was a force majure clause, but then went on and immediatly provided the FULL remaining balance under the loan agreement saying it was the right thing to do. There was nothing to stop them making partial further advances which would have at the very least been the more conservative thing to do, was there ?
I seriously call into question the Directors independence on this matter and will be bringing this up at the next AGM if not long before directly with David Sailsbury.
I have lost considerable confidence in the company and its directors to make objective, rational and indpendent decisions and perhaps the market is saying the same by pricing the company down today...on the other hand it could be just negative sentiment but I've made it crystal clear which theory I subscribe too. TR is probably the one to blame on this one so I'll be having a crack at him too.
I agree, business is business. Ridiculous and emotive decision to piss that money down the drain.
We both know for a fact that any truly independent lender acting in a prudent and conservative manner would have excercised their force majure rights. The directors said at the time there were sound commercial reasons for their decision. I wonder if these so called sound commercial reasons will stand up to close examination in the cold light of day. Looking forward to putting this too them at the next AGM and holding them accountable so they can explain to us all why they appear to have given away $12m for what prima facie appear to be nothing more than sentimental reasons. Media report late last week saying PRC employees promised their Christmas bonus, we all know where that money is coming from. Yes that's right, that's yet another bonus on top of their bonus for such "wonderful" performance with hydro extraction, and I can't help but speculate on what Chrismas bonus NZO staff are up for considering their "wonderful" business performance this year.
If NZO have such vast volumes of free cash flow to throw around perhaps they need to remember who are the owners of the company and reward us with our Christmas bonus, who would say No to another dividend ?
Roger,
Agree that many investors would have known it was pretty clear by the Saturday after the explosion that receivership was inevitable. But also, that it was completely unacceptable to the general public of New Zealand to say it out loud at that time. Was that worth an additional $12m (of secured debt)? I guess that would have been a difficult call for NZO management on the day, but I can understand no one having the stomach for it. Can you picture how those press conferences would have looked on the Monday or the press (and talkback!) reaction? It would have made for an interesting board room discussion!
Yes, they knowingly put another $12m at risk, but I'm guessing they did it with the knowledge of the value of the above ground assets and knowing that they could still pull the plug on a better day. They also put themselves in a position to pick up the rights to the coal resource at a discount - though at that (pre further explosion) point, they may have had a more optimistic view on timeframe for possible mining.
It was a tough call, but at one level, I find their actions honourable and applaud them.
yes I agree Lizard
I'm not sure if its so relevant for NZO or not but PR can get pretty ugly in situations like this
Is it possible that NZO has spent big MONEY, on legal advice to get the Receivers in, if so best decision in 2 years, hard to see present Management having come up with it, given the time lag.
I can certainly see where you are coming from Lizard and agree there would be a PR disaster well baked in if NZO had excercised their force majure cessation of further funding rights, and to be honest its really gut wrenching stuff not for the faint of heart however I would have thought a more measured or balanced approach rather than just throwing all the remaining undrawn line of credit at them might have been prudent given the fact that they were allready well secured over PRC's assets, whatever they may or may not be worth.
Leaving emotions aside it still looks like a hasty sentimentally based decision to me. Business, especially in this new GFC environment can be a cold hard place and there can be little question a truly independent lender would have acted in a more prudent and carefully measured manner. Tony Radford's long association with both companies needs close examination in my view, there's a very clear lack of independence perhaps if he hasn't got the stomach to make prudent and carefully balanced commercial decisions its time to retire ?
There's no question I'll be putting this matter to him at the next AGM and lets agree to see how they justify this based on what they said were sound commercial reasons in due course, after all a donation is a donation and to call the full payment of all remainign funds available in one hit anything else, looks like very creative accounting to me. NZO are only a 30% shareholder and had no legal obligation to provide the remaining funding to PRC, especially all at once.
Call me a cynical bugger if you like, or a rational prudent businessman, (I prefer that), but I'm sure I don't need to ask the question what did the other substantial shareholders (Indian owners) of PRC contribute / donate...the answer should be obvious to all.
To be honest, Roger... it was me worrying they'd have to do the VA or receivership announcement by the Tuesday after... and you that convinced me the reality was that they wouldn't.... So you called it right - and, in my heart, I am happier that you had the clearer call on that one...
Thanks for that Liz. I certainly acknowledge it has been and continues to be a real gut wrenching time for all concerned, and there's no question that they have done the politically correct thing but where's their hard nosed business approach, there's plenty of cash flow from Tui and Kupe but to me it begs the question of when there's plenty of lard in the cupboard if its not all too easy to play fast and loose with shareholders money ? There are five independent directors on NZO's board, surely this was a split decision of the board, they can't all be sentimental emotional decison makers ? or were there really sound commercially based reasons for their decision as they said, if so I can't wait to hear them.
The donation made by NZO was $500,000. I have no problem with that.
The remaining $12M odd of the available loan money was passed through to PRC fairly quickly. That was not a donation - it was in the form of first ranking debt. The question of how secure it is depends on the value of PRC and its various assets - road, loadout plant, processing plant, tunnel, equipment, insurance policies and coal reserves. Provided those assets prove to be worth $50M odd (approximate first ranking debt level), then that $12M will come back to NZO. If PRC proves to be worth between $26M and $50M then for anything over $26M about half should come back to NZO (split between NZO and BNZ).
My understanding is that by advancing the remainder of the loan at the time it did, NZO surpassed BNZ as the major first ranking debt holder and thereby placed itself in the position of being able to control the receivership. That is not a bad thing at all. If the $12M is repaid and the NZO appointed receiver recovers additional value beyond the $50M of first ranking debt that should help pay the NZO bonds and possibly even result in some remaining shareholder value. NZO stands to gain significantly from any shareholder value that is recovered. Had a BNZ appointed receiver been in control, then it would have suited BNZ had that receiver quickly recovered only its $23M odd plus the NZO $13M odd that had been the total first ranking debt. The NZO receiver will obviously have very different priorities, and that could well prove to be very valuable to NZO.
Of course NZO presented this as being a noble thing to do - but underneath there appear to be very strong business reasons for doing so.
A rare breath of common sense there, Unicorn, compared to some of the bluster posted by many. Easy to criticise after the fact. Ah, the insight of hindsight.
Among the assets you mentioned were coal reserves - do PRC own them? They could be valuable, no?
Unicorn is exactly right - NZO couched their cash injection in emotive terms to fit the sad occasion, but clearly had a receivership foremost in their minds, and was a 'calculated move'. They 'control' the receivership from here, with BNZ tagging along for the ride.
Nothing can or will happen now in terms of extracting value from their equity stake (along with all equally ranking shareholders) until the inquiries are done and dusted. That might take several years. In the meantime, secured creditors best hope is for a decent insurance claim of sufficient size to be able to cover their secured debt position. The staff do have a preferential position ahead of them, but for how much is unknown. Not likely to be as generous as Peter was intimating, but it will be guided by prevailing legislation.
I think the coal reserves being talked about will be what was stockpiled (sold to Solid Energy I believe, and in the scheme of things - peanuts) The external infrastructure may have some value on a break-up basis, but would clearly have greater value if the Receivers are prepared to wait for the outcome of the inquiries, at which stage, if practicable, they will sell the whole project to the highest bidder.
IMO, PRC shares will not trade again, but may have residual value in a trade sale in years to come, and be pro-rata settled by the receivers across all shareholders
Good luck with your questioning at the AGM or earlier, Roger.
That would be part of the value in a sale, but the qualification in your second sentence requires a determination first
Theres plenty of hard coking coal still in the mine, that the Japanese steel makers will want, gunna be tough decision to close the mine for good, given the expense invested to date.
Never re-opening the mine will be yet another kick in the guts for those who worked there, not to mention those who died, the West Coast needs it up & running
shareprice all over the place yesterday-started at 89-dropped to 83 on news of recievership-climbed back up to 89-and settled at 87-there are obviously some differing views on NZO value in relation to whats going on these days
If the PRC receivership guaranties 1st payout to NZO and both Tui and Kupe are producing at full bore as expected, Why did the s/p not rise yesterday up to $3.00 or at least where it was at $1.60 12 month ago???
What you've suggested seems like a rational scenario to me, assumming of course there's any recovery of funds at all after the receivers fees, site restoration fees, all recovery fees, legal fees, lawsuits ?, redundencies and so on.....
Without wanting to overstate the obvious the market has emphatically spoken and written off the full value of both NZO's investment in, and all funds advanced to PRC, so clearly the consensus is there it is likely there is no money to be recovered, so without wanting to appear to be dogmatic, clearly the market thinks the $12m
was a quassi donation.
If the market was happy with NZO's handling of the PRC matter why is the share price in the doldrums at circa 85 cents ? All those extra team members David Salisbury has brought in to look at acquisitions and all those huge salaries over quite a length of time now and what have they done ?
Who would welcome an experienced overseas company takeover and running the show more efficiently and effectivly ? I would.
Fear. The market doesn't like uncertainty - it doesn't matter that Tui & Kupe are major league cash cows - - a stampede is a stampede. BUT this is where investors with a cool logical head and a certain amount of guts can reserve their spot on the Bermuda waterfront.
Outside of Tui and Kupe, both run by specialist firms and where NZO only has shareholdings, what else can NZO's management point to as successes?
Exploration? Zippo.
Investments? Try PPP - sitting on a big fat loss.
PRC? Oh dear!
The market is rightly discounting the value-minus capabilities on NZO.
So why invest in NZO when you have world class companies like Woodside in Australia to invest in?
NZO is like an option now, unless they continuely replenish reserves the instrinsic value of the company declines over time.
WITHOUT PREJUDICE:
BALANCE:
My sentiments now for at least more than 12 months.
22 Staff a board with supposed 200 years experience
A head Honcho on wait for it 1/2 mil. per ann. only a question of time before he leaves on his own accord i guess, although would not hold my breath, will have impeccable timing to milk this to the hilt.
Tony is the only one in that mix that can claim and be credited with meaningful contribution.
imagine how low the sp would be now if they didnt purchace on market and burn....cancel the umpteen shares.
waste of money, and the 12mil gift to prc, and now talk of maximum payouts and possibly bonuses to miners.
the list goes on and on with money going everywhere but the shareholders.
how many $1.50 options were placed a couple years back....
nzo...... look after your shareholders.
ps if any overseas raiders are out there...... now is a good time to take over nzo,
at least the 7 or 8 million 1cent shares wont be cashed by directors.
god nzo top office make me sick.
Good post mate. Can't help but speculate if there was just one good accountant and no other staff at NZO, who accounted for the money received from Tui and Kupe and distributed the lot to shareholders what would the annual dividends be then ? (Any Australian analyst reading this, please feel free to try and crunch the numbers and pass this on to any company's CEO who's looking for cheap acquisitions).
DS and the expensive team hired to research all these opportunites they say they've been looking at havn't earned their keep by any stretch of the imagination and its time for heads to roll over the PRC fiasco and the management team to be slimmed down and more of the milk from the Tui and Kupe cash cows to flow where it rightfully belongs. (Lets remember that NZO management assured us they had run their own ruler over PRC operations are were more than happy with PRC's modus operendi)
Its a long. long way down from the $1.50 option excercise all the way down to 85 cents when global markets have generally recovered over that timeframe so for NZO shares to nearly halve in value, management and directors should be profoundly dissappointed with themselves. Quite obviously I'm far from a happy camper but for what its worth I'm only staying in on the basis of hoping for a takeover.
Snr. Roberts has been very as you say quite lately.
Good post Roger. nzo is looking very bad at the moment and I'd expect some of the institutional investors will be taking a good hard look at them. They raised a whole bunch of money off their shareholders then did nothing with it apart from investing a lot of money in pike.
Management and the board of this company have drawn some big pay packets and done bugger all about growing the company when they had a very good chance after the GFC. Heads should rightly roll, starting with the chairman who has also managed to get himself on the prc board. One has to question both his judgement and independence and he is the one who holds ultimate responsibility.
What now? Well the farm in they announced to their south taranaki permit by peak oil is probably off as that company cancelled its IPO. Also expect AWE to drop the Barque permit although nzo might be desperate enough to pick up more and go it alone on a well.
Expect some desperate moves by nzo which will probably include cutting staff levels from their million dollars/month.
I can't see any other near term opportunities that nzo might try to get into in NZ and there are unlikely to be any drilling in the next year.
Add into it the FX losses, & if people go back in the thread i did "forecast" them in advance, so im not sure what there Accountants do there to earn there salaries, certainly seem a little light in that regard. NZO have never needed to hold the $US90m they had at the time, so to me it was a no brainer!
More cash down the drain! (Theres a pattern forming here)
lets hope nzo have a drill announced soon - like PEP 38483 to put some of the usd$ to good use.
PEP 38483 has passed drill decision date an d in the absence of no announcement then one hopes the finer detail still being fnalised.
M
Snr Roberts has actually been very busy lately helping his company deal with one of the most tragic events in this country's history. There are more important things to be done than worrying about the ill-informed speculation by a handful of people on this site. As always, if any genuine shareholder wants some actual facts, they can email me and I will reply to them directly.
Mr. ROBERTS
What it took a Tragedy like this to wake the board up to getting busy?
Even without this, the performance over the last 3 years is anything to write home about
Like the flippant comment by one of the directors at the AGM if one does not like what the co. is doing put your money into another one.
This co. had a brilliant future 4 years ago, no good to blame people for having some basic expectations from a well payed but arrogant management.
Why respond via e-mail to fair questions, bring it out into the public arena or has it stopped being a Public co?
btw. Even the fact that i have for some time now only half of the shares that i used to, take obviously still a geniune interest in the co.
Like to look forward to praise the co. again preferably soon.
Snr Roberts,
I don't doubt that you have been very busy and anything you have had to do with regards to assisting our company dealing with the Pike River tragedy of course takes priority.
However, there have been a few regular NZO related questions posted here too, which I think we shareholders should be informed about.
For starters, maybe NZO could provide a statement about why the share buy back has apparently been suspended (or discontinued), and when it is expected to resume.
And maybe we could get an update on PEP 38483. After all we are now past the drill decision date.
Just the normal kind of thing we shareholders would like to know about.
Thank you in advance
Bigbob
Good reply Chris. It still won't shut them up though.
We are, as far as I am aware, the only company that has attempted to engage with the posters on this site. But proper engagement with our shareholders does not take place here. Some of the posters are not even shareholders.
We openly and happily engage with our shareholders. Almost every day I get shareholder emails and all of those emails get answered.
You should go to our website and send through any questions. You can then post the answers here if you want, that's your right.
Fair enough that you don't want to reply to each and every rant here
However, at some level I suppose that the answer to either of these two questions could be considered material and would warrant a release via the stock market. But maybe not, we will only know in hindsight won't we?
If you did actually try and inform the market better, maybe it would re-establish some confidence in our company. Maybe it would show that the management does know what it is doing? Maybe the board would regain some credibility?
But then again, maybe not....!
I actually agree, the the time taken by Chris to make the half-smart Snr Robert's reply, might have been better used to reduce the long suffering shareholders anguish of all the uncertainty, with the s/p way undervalued ??????????
You are a tough bunch to keep happy.
Do you really need a formal statement as to why NZO has stopped the buy back of its shares? And the current share price is this low because of what happened at Pike, what more explanation do you want?
It is not a great situation but all part of the risk of investing.
Personally I appreciate it that Chris does take the time to respond to the questions on this site. It is a "Damed if you do and damed if you don't" situation.
From memory it was a bunch of people on this site that thought the share buy back was a good idea.
Thanks Chris!
From a market perspective nzo has been a disaster after topping out in late 2009 its been downhill ever since posting returns of - 50% last 12 mths ouch and currently testing multi yr support levels a break of which could see the price heading towards 60c.
If you like oil as an investment a futures or oil etf would have had you laughing all the way to the bank and then you dont have the risk of worry about company specific issues.
Especially with a company like NZOG - well paid second rate directors and management pretending they know how to run an oil and gas (and yes, coal) company.
CEO was paid $559,000 last year. TR was paid $154,500. What have they achieved? PPP, dry holes and a blown-up coal mine.
Meanwhile, a lot of travelling around the globe looking for opportunities! First class, 5 star hotels, caviar and champagne, anyone?
But hey its Hard Work,
Best NZ v US $ rates, a run of top Oil production at all time High Prices, good demand & prices for Gas, hard work done and taken care of by other Co,s heaps of cash to wallow in..
At that rate if it has to become risky investing in shares then better emigrate to the Planet----- CHIPPIE++++Roberts ---hail from.
Reminds me of the old saying, how do you make a small fortune in the Oil and gas Industry, start with a bigger one. NZO has extracted heaps from shareholders over the years and paid pitifully little back. Help me out here Chris, is it four or five dividends in total its near 30 year history ?
You mean like Allan Hawkins built Equiticorp into a top 5 company?
Or like Mark Hotchin and Eric Watson built Hanover to have over $500m of depositors' money?
Or maybe, like (insert who you think) built PRC and caused the deaths of 29 miners?
Wrong argument, me ole Unicorn, to use.
NZO hits six year low today of 82 cents. Just thought shareholders would like to know that the $12m so called "extra funding" NZO provided to PRC works out to 3.08 cents for every share you own of the 389m listed ordinary shares so in addittion to the severe hiding everyone of us shareholders took over the PRC fiasco the directors saw fit to "invest" another 3 cents per share of your value in the bottomless pit of PRC. Are these the sort of "brilliant" business decisions that justify their bloated salaries ?
That is a completely incorrect statement. It shows nothing more than that you comment on things you know nothing about.
I have in fact sent a number of messages to the company executives over recent years and had three face to face meetings with management. To suggest those meetings were unquestioning shows how far you are from understanding reality.
You have brought up a quote from some time ago. A lot has changed since then, so it is largely irrelevant. In my view there are some significant areas where the company has failed to deliver of late, and has failed to make the reasons for that lack of progress clear to its shareholders. That is not good, and something I will quite likely be taking up with the company in the near future.
The three matters that are largely behind the current price of NZO shares (the recession, the PRC explosion and the lack of success from the recent drilling programs) are not things I blame NZO management for. My view is that drilling programs are not guaranteed to succeed and that the Pike explosion was something from the worse case end of the risk list that in practical terms may not have been avoided without the use of hindsight. Once the cause of the Pike explosion is known, I may well change my mind on where blame should lie with that event - but it is extremely unlikely that NZO has any culpability.
You also failed to answer the simple question ... How many companies have you built up to the extent they made it into the NZX50?
Happy to repeat my answer :
You mean like Allan Hawkins built Equiticorp into a top 5 company?
Or like Mark Hotchin and Eric Watson built Hanover to have over $500m of depositors' money?
Or maybe, like (insert who you think) built PRC and caused the deaths of 29 miners?
Wrong argument, me ole Unicorn, to use.
The answer, me ole' Unicorn, is that you have an undying belief that anyone who builds an NZX50 company automatically must be accorded the highest level of respect and admiration in your books.
I choose to disagree with your assertion and ask you to consider the question of PRC and the 29 dead miners. $290m and a top 50 NZX company built by a bunch of amateurs, wow! Was it worth it?
If you would allow me to interject for a second, the NZO price this time last year was over $1.75 and is now 82 cents, less than half. The share price has fallen since the PRC event to a significantly further extent than is warranted by the complete write-off of the funds invested in and loan advances made to PRC, assumming those amounts are completly written off, which looks like a pretty safe assumption to me. This drop is against a background of high oil prices and a lower exchange rate against the American dollar so NZO should be "caning it" in terms of revenues from Tui and Kupe.
NZO hit a six year low today and I believe the market has spoken that it is not at all impressed with NZO and its track record in recent times. I also believe the market is most unimpressed from a commercial perspective about the handling of the extra funding matter previoiusly eluded too at some length.
I'm with Balance on this one and think Unicorn, your question is completly invalid.
The market is driven by supply and demand. After the PRC failure, supply is up and demand is down. It will take a while for that to stabilise.
Meanwhile some people will panic and lose money, others will be more rational and will make money. That is the way the market works.
NZO's induction into the main index was on the basis of the options money raised @ $1.50 per share
Roger makes a valid point, despite all that cash raised, what has happened since, the share price is what it is!
NZO has paid out a few 5c dividends
No further exploration success, & little exploration acquistion activity during the GFC (which provided plenty of opportunities for cashed up companies)
PPP investment, which hasn't worked out & is showing a paper loss
PRC investment (ok there are many factors out of there control, but not a good use of shareholder funds & to keep propping it up!)
Poor treasury/cash management with regards to FX, (to do NOTHING is speculating!)
These are all matters that the NZO Mgmt/Board had/should of had, control over!
I remember the FX debate well ShastaQuote:
Poor treasury/cash management with regards to FX, (to do NOTHING is speculating!)
I recall offering to do it for them for a lousy 200k pa, and I heard nothing:ohmy::ohmy:
I sold all my NZO and PRC in silent protest :cool::cool: high 1.60's and mid 1.20's
You guys who are bleating on at management now should vote with your feet too - in my experience it pays......
Overly simplistic Uni. How about all those who short the bejeezers out of NZO to reduce their losses and make everyone elses worse, while David (Nero) Salisbury fiddles. They opened the coy SP to trading with the promise of a significant buyback and then pulled the rug from under most of their shareholders. The Board and Salisbury are on their way out unless they suddenly reveal a master stroke. If true to form they look after themselves, expec a sale or merger. At the current rate they won't survive as an independent company beyond 2010.
They will join the cream of NZ listed coy directors who have ridden their coys out of the top ten, out of the top 50, to some where else....
Wise words as always Unicorn .
Your postings over the years and in particular the brilliant valuation of TTP,and leading of a group of us into successful adjudication over ttp(and demolishing them later in court and the appeals court ) are testament to the brilliance of your postings .
There are some on this site that for various reasons will try and rubbish your honesty and analytical ability-and the recent tragedy will lend fuel to this .
I always value your insightful comments and wonder if you could post a valuation of nzo -it seems to me that current cash plus value of kupe and tui alone is way above the current sp.
Interesting Fish.I would have thought that Kupe covers the SP and the cash and TUI come as an extra free gift.
To my mind the SP is so low as the market somewhat rightly is worried about the lialibilities that NZO might feel it has to pick up. See many contractors and other feel gutted by what has happened.It is past time that the NZO shareholders made it aware they are also gutted by what has happened and it is clearly now for management to make it clear that future responsbilities are solely to the NZO shareholders.
Regardless of any valuation Unicorn or anyone else puts together the market will downgrade until this supposted lialibility is cleared up. We are all gutted. The only ones not gutted are some anti NZO posters and laywers.
Hi Fish
Posting here is just feeding the trolls. I tested the water yesterday and found some completely silly statements are being posted.
I have better things to do than to contribute to a forum where people are making nonsensical statements for their own strange purposes.
starting to sound like talkback radio-hats off to those few posters with actual facts and reseach to share..
With respect, you can take it as read that most of us on here are well aware of market supply and demand dynamics and there effect on the SP. My contention is quite plain, the Directors and managment have made a complete mess of managing the PRC event, they've forgotten who they act for and for that matter they've consistently demonstated a total inability to make any meaningful use of their abundent cash flow from Tui other than of course to make sure there's plenty of food to get their snouts into in their trough.
Valuing property companies is easy work, NZO too tough for you ?..not that I care there's a number of valuations doing the rounds excluding PRC but until the directors can demonstrate they remember who they act for the market will continue to take its own dim view.
Not what the NZOers and Pikers want to read but that's the cold hard truth. And NZO directors and management are not going to change their ways - not with the sort of fawning shareholders who hang onto to words uttered by the directors and management.
I remember well one PIker posting this wonderful piece after meeting management last year : "I have been assured that there will be no more capital raising."
What is the point; obviously there are people with so much superior knowledge to me on Sharetrader.
To be honest unlike you Balance (who must be very rich due to your superior knowledge and trading expertise) I have a day job to cover the bills so I only check in here from time to time.
Unicorn covered this for me when he said “Meanwhile some people will panic and lose money, others will be more rational and will make money” and “it will take a while to stabilise”. There is no point in buying back shares when the market is like this. To be honest I personally do not think there is any point to buying back shares at any time.
I have a paper loss of >$100K on NZO since the Pike explosion. I have as much reason to get on the case of NZO management but choose not to. There is no problem if people have different opinions, but if you do not like a company then just make sure you do not hold any shares.
Not much to add to this really.
I was one of the main supporters calling for the buy-back. The logic behind buyback's is well established world-wide. Seeing as its clear NZO can't find another target to acquire and they think there own shares are the best buy on the market, why not buy them back ? Surely this makes common sense so as to be earnings acretive to remaining shareholders on an earnings per share basis. I would have thought a time like this would be the perfect opportunity for the company to continue with the buyback, but clearly the Directors know better but don't seem to want to bother updating the market why. Yet another example of "great" shareholder communication ?
And to fill in the time between making pronouncements, why not have a look at the series that this one is just
a sample of-
http://www.youtube.com/watch?v=WeBtd...eature=channel
nice to see tapis at over $96 us and a better exchange rate .
Diggers prediction of $100 by the years end is close to being fulfilled.
I e-mailed Chris Roberts a few days ago-they did stop the buy back with the explosion-didnt want to be accused of insider trading amongst other things . They are reconsidering starting anyday .
A question was asked of you when you professed to know why NZO stopped the share buyback. You chose to make the assertion and then, cannot answer.
Also, if a person does not like a company but thinks it has good assets and good potential which are being run down by bad/poor management, that person has every right to criticize and bring it to the notice of all shareholders, investors and the market. That's how things improve and progress can be made.
Are you suggesting otherwise?
Boy if there ever was an example of the kettle calling the pot black this is one.Balance you are the champion at making statements and then never following up with an answer when other posters ask for one. You simply ignor and go on and cover it up with more assertions.As you know your policy works as other poster get tired of asking for your proof.
Sorry, Digger but I do not listen to NZO or PRC management assertions and then, pass it onto other posters and shareholders as gospel truth as some NZOers and Pikers do.
I question and then, let the penny drop for those who have ears and care to listen, eyes and those who choose to see.
Hi Fish,
My $100 for Tapis for for 32 december is good enough to now call it a success. Shame i waisted time on the oil price at year end,should have been more interested in the fait of PIKE at year end.
The liability that NZO feels it has to pick up worries me and the market as well it seems.See subcontractors are suggesting that NZO should consider putting them higher up the receiver list than what they are legally entitled.Sad for them i say as they wanted to be contractors and not workers as it would mean more money if all went well. The fact that the mine blow up is only negative to them as in the good times they chose to not insure themselves for such an event.The risk should stand now in its legal arrangement and let each group sort themselves out. Maybe some subcontractors will themselves go bankrupt and if they do that must not be NZO responsbility to pick up.
I'd rather they took more of an interest in looking after their owners. Regarding your comment on the Investigate article on PRC thread and not looking good for directors and management of Pike, lets remember who's the Chairman of NZO and the fact that NZO stated they had run their own ruler over PRC and were more than happy with the operation.
A classic case of guilt, lets throw around shareholders $12m "funding" because its the right thing to do to show we really do care. Might have been better to run a really thorough operational review of PRC's safety systems in the first place, stitch in time saves nine ? Seeing as other companies manage the Tui and Kupe developments I would have thought all those staff could have at least run a really thorough and comprehensive operational review of PRC's systems wouldn't you ?
Hi Digger,
Tapis now at $98 so not quite there yet .
Pike River is still spooking investors and putting the sp down . NZO are highly unlikely to give more to Pike and hopefully will get their loan back in the course of time .With technological advances I wonder if underground mining for coal oneday could become remote-just as the drones are flown over afghanistan etc . Might be a good idea if nzo kept some kind of interest in the mine .
Fascinating that those who are perennially following the words and wisdom of the directors and management of NZO and PRC get so defensive when asked to produce the 'goods'. Alas, no more goods to be produced by PRC - not even spin or PR bs anymore.
Market will discount NZO now to buggery - how can you trust management when they have squandered so much of the cash generated from Tui and the options exercise on misadventures like PRC. PPP and dry holes? GFC presented one of the great opportunities to buy oil and gas assets cheap - NZO bought a lemon! Tui is past its peak.
So what will management do next? Maybe invest in Fiji?
you really do have to question the judgement of this company's management and directors. They had a big pot of money but blew it and have got very little to show for it.
Expect them to relinquish holdings like Barque which the joint venture applied for a 6 month drilling extension for in July 2010 and Kaupokonui which requires a drilling commitment by Jan 2011.
They really need some good news or their share price is going to fall, potentially dropping out of the NZX 15 and then institutional investors will sell out forcing the price down even further. In all likelihood nzo would blow more money buying back the shares to keep the price up, but that isn't going to save them.
Are they going to fade away or go out in a blaze of glory?
That's better balance.
I've run my numbers on NZO. Taken the average valuation from Brokers valuations inclusive of pike, see NZO's website, and that works out about $1.60, less 40 cents per share for completly writing off PRC and all loans and gifts to same = $1.20 per share, then I've discounted this by an appropriate multiple (50%), for NZO Directors and managements world class expertise" and fair value with existing directors and management is 60 cents in my opinion. I can't wait to get out. Hoping some new gullible stary eye'd punter will pay me 85 cents today.
P.S. I see they've started the buy-back again, pay me 85 cents and you can have the lot.
If you are that disenchanted then why not sell at market?
"Be fearful when others are greedy, and be greedy when others are fearful." Any traders know about this. I'm buying NZO as my calculation shows its value should be at least $1.00. Please see followings.
Equity at 30/06/10
Total CB to PRC at 23/11/10446,839,000
Total Short-term Facility at 26/11/1038,596,711
Total Cost of Equity to PRC25,000,000
Equity excluding Loan & Investment in PRC82,000,000
No. of Fully paid shares issued301,242,289
Net Assets per share at 30/06/10389,093,000
Net Assets per share excluding PRC interest1.148
Average PB in the past 9 years0.77
Valuation excluding PRC interest1.29
PRC is claiming $100m insurance1.00
Supporse NZO get 10% debt recovery, then
Then Net Assets per share307,601,961
Then Valuation0.79
Supporse NZO get 30% debt recovery, then1.02
Then Net Assets per share320,321,303
Then Valuation0.82
Supporse NZO get 50% debt recovery, then1.06
Then Net Assets per share333,040,645
Then Valuation0.86
1.10