LPC

[kiwi_on_OE]

I see that CCHL and PoO signed a MoU about LPC. Would that make them 'related parties'? With a combined holding of over 90%? Therefore shareholders could force them to buy their shares off them at a suitable price?

[Snoopy]

Well so far all good for the people who sold. LPC down to $2.55. A .20cent profit already.
If they keep falling maybe it is time to get back in.
CHCH will not be able to buy any more under the creep provisions (they are creeps ) so there will be very few buyers now.

I bet the people who sold their 2,500,000 shares are feeling happy.

Let me get this straight Devito. You claim that those who sold at $2.75 have 'made a profit' since the LPC share price has gone down to $2.55? You and others may have made a profit, but not for that reason. Get back to me when you *have* actually bought those LPC shares back. Seeing a price on the market, and actually owning those shares are quite different things, for thinly traded shares like LPC.

If you don't believe me look at the volume of shares that has traded since the CCHL offer closed. It would be somewhere near 1% of the shares that CCHL bought last week. So perhaps 'one in a hundred' has made a profit as you say. But I don't think you can claim to be part of that 1% if you don't actually *own* any LPC shares! Plus you have to subtract the brokerage both ways. 2% might not sound a lot. But it represents over 10c per share. So over half of the profit, the profit that you yourself haven't made, has gone in broker fees even as you crow about it.

Perhaps you are still having doubts about selling out of LPC in the first place? Don't. IMO you have probably made 90% of the eventual gains you would have made by continuing to sit on the shares like I am doing. There are plenty of other great shares around that will allow your capital to be redeployed with statistically a much better chance of making greater gains than if you had sat tight. I am staying in LPC myself as much for the lack of a significant downside as well as keeping myself in play for whatever upside is left. And if in the interim the LPC share price does fall significantly, I, like you, will have no hesitation in buying more. And I suspect you and I am not alone in our thoughts.

SNOOPY

[Snoopy]

I see that CCHL and PoO signed a MoU about LPC. Would that make them 'related parties'? With a combined holding of over 90%? Therefore shareholders could force them to buy their shares off them at a suitable price?

Actually it is Lyttelton Port of Christchurch and the Ports of Otago that have jointly hired an independent Auckland based consultant to look at how a merger between LPC and POL *could* be implemented. Christchurch City Holdings Limited may be majority shareholders in LPC. But CCHL are *not* LPC, even if sometimes they behave as if they are!

The brokers who tried to acquire my shares in the $2.75 offer ran some scaremongering story about LPC having to delist after this latest offer due to lack of sufficient shareholder depth remaining. The chairman of LPC then came onto the news and said, no there has been no application by LPC to get LPC shares delisted.

LPC directors are required to act in the interests of *all* of their shareholders, not just majority shareholder CCHL. Frankly I would be disgusted if LPC were to delist as we remaining independent shareholders would then lose the protection of the NZX takeover rules. I cannot imagine the new LPC chairman would do that to us, but then again those CCHL 'masters' in the background are very powerful.

If LPC and POL were related parties, LPC could simply have made a $2.75 mop up takeover offer that would have been accepted by both major parties and the mop up of the minorities would happen under compulsory acquisition. LPC didn't do that because POL are independent, and would not have accepted a takeover offer on those terms without a clear pathway forwards.

SNOOPY

[Snoopy]

And if in the interim the LPC share price does fall significantly, I, like you, will have no hesitation in buying more. And I suspect you and I am not alone in our thoughts.

Well the LPC share price did weaken, down to $2.25 or so, but the latest sale was at $2.50. I haven't bought any more LPC shares. But that is because I have been snapping up what I perceive as even greater bargains elsewhere. It certainly doesn't mean that I have lost faith in LPC. Indeed, with the last six months of market action I now find that my LPC shareholding is the most valuable of all my NZX holdings! The credit crunch is out to lunch as far as LPC shareholders are concerned.

Management have a somewhat more cautious view though. Looking in detail at the interim report which arrived in my mailbox today, they are projecting a full year profit of $10m, roughly flat with the $10.3m that LPC generated in FY2008. Given that first half FY2009 earnings are substantially up to $5.7m, that leaves only $4.3m to be earned for the remainder of the financial year. $4.3m represents a 20% drop on the $5.4m earned in the second half of FY2008. This is not good news.

Perhaps LPC management have adopted the culture of underpromising and overdelivering? Or perhaps majority holders CCHL will use a declining profit outlook as an excuse to mop up LPC shares that they do not already own at bargain prices?

At $2.50 the shares are on a projected PER of 25. That is more than fully priced on an ongoing operational basis. However, those PER projections take no account of any Port of Otago synergies should LPC and POL do a deal and get together. It is my intention to hold on to my LPC shares and see what happens. Meanwhile I'll be picking up an interim dividend of 1.5cps on 27th March 2009.

SNOOPY

discl: hold LPC

[Snoopy]

As I stated before there is a shortage of stock pile space on the current land available, this problem is highlighted mainly because of all the different piles required for the different grades of coal already being stockpiled. So, when Pike River’s coal comes on line this will just add to an existing problem not enough room. The area they plan on stock piling Pike Rivers Coal is a wee bit out of the way for loading back into the load out facility, which in turn means double handling and a lot of travelling with front end loaders, which in today’s market is a very expensive exercise when you look at the current price of fuel, these machines drink fuel like you won’t believe they are not your average car as I’m sure you’re aware of.

Right! now the layout of the current coal facility and the upgrades to make the place work efficiently. Well we know it is way too small, so some reclaiming is needed here in Te Bay.

*Some reclaimation*? I went past the Lyttelton Port for a look see at the weekend. I couldn't help notice the application for resource consent to reclaim 10 hectares of land. That is huge. It basically doubles the size of the existing coal loading area. I'm guessing it is hugely expensive as well. But I notice the application also mentions digging further into the cliffs on the land side. So I guess they expect to get some of the fill from there. Anyone out there know how much it would cost to reclaim this amount of land?

Ok! Ships waiting for coal, I’m referring to ships waiting for coal at the berth. What I mean is waiting alongside the berth because there is not enough coal there for their shipment. Now believe me this happens on a regular basis.

Perhaps not so regular now the coal trade has been credit crunched? Traditionally that coal port was always full. I don't think that ship loading hopper has been operating for a couple of weeks now....

SNOOPY

[Scuffer]

I would say LPC don't have the money to pay for that amount of development but solid energy would.Resource consent should be a foregone conclusion looking at who owns all the shares.

[Snoopy]

I would say LPC don't have the money to pay for that amount of development but solid energy would.

Solid Energy rather pessimistic in their half year (mid March) outlook.

"Revenue and profits were both ahead of plan through to October, but in November customers began to defer export shipments and seek substantial price reductions, and every planned December shipment was deferred."

The reclaimation may not be needed until things pick up.

However, Solid Energy has agreed to transport across other West Coast coal in Solid Energy trains on a commercial basis. Perhaps separate (greater) dumping areas are needed for that?
Are these smaller players willing to pay LPC to reclaim this land?

SNOOPY

[Marilyn Munroe]

A pre-dick-shun.

When Christchurch City Holdings was in the process of buying out the small shareholders in order to go into a joint venture with the Asian port interests, critics of the arrangement within the citizenry of Christchurch directed their ire at the city council.

His worship Flowershow Bob is facing vociferous opposition to his candidacy at the forthcoming local body elections.

I predict the proposed merger with Port Otago will be placed on the back burner until after the election.


Boop boop de do

Marilyn

[devito]

Well Snoopy, I'm back in today. A mix of $2.31 and $2.30 for my new small holding.

[Marilyn Munroe]

LPC MAKES STRATEGIC LAND INVESTMENT

http://www.sharechat.co.nz/announcem...nvestment.html

Boop boop de do

Marilyn