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  1. #3341
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    Quote Originally Posted by Left field View Post
    The current capital raising moves may well be prudent, however I'm happy to watch this play out from the sidelines. GLH!
    This seems well structured capital raising.

    The ratio of 1:9 is fairly small so it shouldn't massively impact the share price. The 2 July record date gives shareholders an opportunity to adjust their holding pre ex date (if they wish to). 37.5% of the money had been raised at no discount to the previous close. There's a shortfall book build so that shareholders not taking up rights have a good chance of receiving some value from the rights. Retail and institution shareholders are treated equally. All shareholders that take up their full entitlement have access to participate in the shortfall book-build. While the discount to the theoretical ex price is quite large, this should have kept the underwriting fee smaller.

    If part of the recent declines in share price were from the market being nervious about debt levels, this capital raise will help mitigate these concerns (unless all the money raised is spent on acquisions).

    Disc - hold

  2. #3342
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    This announcement also provides a minor update on TH2's likely value, in that its expected to break-even by 2022.

    If this is realistic and achieved, it means the expensed contribution only exists for a few years and THL's share of these losses is easily financed by the additional cash raised.

    Having turned around the expected 2020 pre-tax expense from start-up losses of US$17m (THL's share is $8.5m), its got to have either pruned the on-going cash burn or developed a fairly useful level of ongoing revenue.

    The next wild-card is how much of the potential target market is necessary to get to break-even. If its quite a bit, then TH2 isn't really that valuable. If its only a small portion, continuing to capture more of the potential market will add revenue, few expenses and a lot of gross margin. In this scenario, the valuation of TH2 could be a lot, but more details are needed to quantify this.

    THL's share price would then become Existing business * sensible PE + Half TH2. That half of TH2 addition could make the current share price look very cheap.

  3. #3343
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    Quote Originally Posted by Lola View Post
    Nup...they are planning for the rainy day. The booms over...ask Chrissy Luxon if you need to know.
    If THL can't make money from Tourism....then what's the point with having it as one of our bigger industries in NZ ? It certainly doesn't make NZ a better place to live in. Right up there with overstocking pastures by buying in Palm Kernal.
    Night all.
    RTM

  4. #3344
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    As reported in the NBR this is for CITIC (CHINA) to help with tourism flow. I also read about selling RV's to China. Keen on the inbound stuff (China tourists) but selling RV's in China?? I dont think they will be as dumb as Fonterra there (hopefully).

  5. #3345
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    Quote Originally Posted by Schrodinger View Post
    As reported in the NBR this is for CITIC (CHINA) to help with tourism flow. I also read about selling RV's to China. Keen on the inbound stuff (China tourists) but selling RV's in China?? I dont think they will be as dumb as Fonterra there (hopefully).
    What makes you hope that? China is a country where markets are relying on long term personal relationships of people bedded into the local culture who know each other well enough so that they know whom to trust and whom not. It is as well a market with plenty of high stakes corruption - forget to bribe one person and you never get the licence you need to run your business. Bribe the wrong person and you end up worst case as organ donor on death row. Most likely however they just would take your money - as they did with Fonterra (though a number of people got jailed and executed in this scandal and the whistleblower died under unclear circumstances - i.e. doing the "right thing" might kill you as well). Any company would need to invest at least a decade to untangle the net and be able to start playing it.

    Why would we think THL has what it takes to play on this playing field instead of just being played?
    Last edited by BlackPeter; 25-06-2019 at 10:25 AM.
    ----
    "Prediction is very difficult, especially about the future" (Niels Bohr)

  6. #3346
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    No idea just noted down some of the cap raise was for selling RV's in China. Seems weird use of money. Just trying to understand risk and why they think selling RV's is core.

  7. #3347
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    Quote Originally Posted by Schrodinger View Post
    No idea just noted down some of the cap raise was for selling RV's in China. Seems weird use of money. Just trying to understand risk and why they think selling RV's is core.
    Great question
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    "Prediction is very difficult, especially about the future" (Niels Bohr)

  8. #3348
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    Q, Where do we think the S P will settle come the rights issue price and will S Hers sell in order to fund their rights down to what price ?

  9. #3349
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    Desperate measures trying to sell RVs in china. Imported vehicles have forbidding tariffs, which only makes them available to the very rich. Just shows that thl is in more trouble than we know.

    I think that they shoul have a share issue to repay all outstanding debt. Then vow to proceed with no debt for the future. I understand all the rhetoric as to why public companies have debt, but realistically they have access to shareholder funds, why pay interest, pay dividends. You might argue about the return on capital is higher than the interest payable. But this is certainly not always true in times of struggle.

  10. #3350
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    Quote Originally Posted by Schrodinger View Post
    No idea just noted down some of the cap raise was for selling RV's in China. Seems weird use of money. Just trying to understand risk and why they think selling RV's is core.
    I didn't read it that way. They noted non-capital intensive RV opportunities in China. I took that to mean a potential JV type arrangement where THL provide expertise and run something in China but the capital for this comes from CITIC.

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