So I was bored yesterday while flying somewhere and was presented with a Bloomberg terminal. For those of you who never worked for an investment bank, a Bloomberg terminal is live market information. LIVE. real time, not filings which are required quarterly, real deal live data. FR are not one of the top 25 share holders in CHC common stock.
(Interestingly Bill Amelio for example is the 11th biggest shareholder.)
Sadly you can't do screen grabs on public access terminals at London City but if you could I could have shown you that of the 15 largest shareholders, the 1 month change is that 8 of them are adding to their portfolios at the current prices while the rest are unchanged. The majority of the investors are either sector specific funds or blended funds. But number 1 on the gun is CD&R who own 49m of 72m.
The beauty of Bloomberg is that it is what the situation is right now, not what happened in August last year when CD&R invested.
Pitts is right in some ways, as is Toolboy ref NPV and future earnings. They are also right when more sellers than buyers = declining price. I have said all along that CHC is in a bad place, I'm just arguing that share price alone is a poor indicator of how a company is doing. it is a very good indicator of what investors think.
The much more troubling thing is the debt which CHC has which totals $1.6bn which is maturing over the next 20 years. Holding debt is not at all uncommon for large corporates, BRS for example are currently holding about $750m which matures over the next 20 years but CHC is high coupon (9.25%) and that is what is bleeding them. The estmiate Bloomberg had on that debt was about $60m a year in interest alone (ie not paying back the underlying asset). That is what is killing CHC way more than any stock price fluctuations. But as long as they keep paying the interest off, the lights stay on and CHC is viable.
Who owns the debt though (ie who are CHC paying)...... First Reserve. The CHC investment is the gift that keeps on giving.
Damn it, I replied again. Less excited this time though. Group hug for me and Pitts I think. Good for the soul.