Originally Posted by
nowherespecial
MGD, once again we are in chronic agreement.
On the topic of the NYSE rules, I actually deleted that post once I found the rule everyone was quoting about but hey ho, I'll take that as a learning point.
On that topic though, CHC (CD&R) can just do a 10:1 swap and miraculously the shares become worth $4 again. It's easy to do, Apple and Citigroup are among the companies that have altered their share structure in this way.
Mitchaa you too are right
Professional investors (of the buy and hold brigade) bought a huge chunk of the remaining 25% (ish) that CD&R didn't buy and now the available shares for joe public for private investment is a fraction of the total number of shares. On a daily basis around 350k shares are traded (current value about $170k) of the outstanding (ie shares that were issued at the IPO) 72m. It's a very illiquid stock, a very small company by NYSE standards and a bit of a tight spot (but emerging) with bad sentiment and some long term investors. We should all expect volatility.
Pitts, after this I'm done but I note that you didn't actually answer my 2 questions.
I've just bought 2000 shares and we can revisit this conversation in 2 years time.
Still think everything is all rosy there Buddy!
I will be more than happy to revisit this conversation along with my original post and say "Boy did I tell you so"
My original prediction of MAX 2 years almost a year ago is going to turn out to be spot on.
It's simple basic 1 on 1 economics....It was never going to survive...no matter what
Here is my original post
Here are the Facts on CHC's Fiscal performance
85% of the Heli's are Leased
50% of the Heli's are NOT on Contract
Last Financial Year
1,650 Million total Income approx
Last Financial Year Expences (NOT ALL JUST THE BASICS)
109 Million P.A. in Administration (hangers on in Head Offices)
330 Million Crew Costs ( no change in the last 2 years)
1,100 Million in Leasing Costs (Heli's, building ETC)
145 Million Interest on Primary Debt.
Last Financial Year
190 Million NET LOSS
Look at the Interest on primary debt $145 Million.....so even if the Company has NO Debt it would still run at a loss.
That $600 Million CD & R bought as preferred Shares is just another Company Credit Card ....CD & R receive 8.5% Interest P.A. on the purchase Price....Take at look at the the last Quartely results and you will see the 10 Million in interest.
So what they have done is take the $600 Million dropped down the Primary Debt from around 1.5 Billion to 1.3 Billion...Spent god knows how much on new Machines, because no leasing Company will touch them....The end result is in reality the Primary Debt as I see it was about 1.45 Billion and it has now ballooned out to around 1.7 Billion. I haven't even mentioned the Senior Notes yet....I won't go into to much detail....But it goes like this... there is 100's of Millions in Senior Notes that the Company doesn't have to pay a cent on until the maturity of the Agreement.
If there was ever a Company that was insolvent this is it.
It's like this....If you had a Credit Card that got maxed out on,....Then you would get another one to pay the interest Bill on the first Card (Senior Notes) Then when the Second Card get maxed out you get a third Card ( CD & R $600 Million @ 8.5%) to pay the Interest on the Second.
That Moron Joan Hooper only ever Quoted EBITDAR and Cash Flow...No wonder she was sacked!
I give the Company 2 Years MAX before the Padlocks go on the Doors.
My best bet is G.E. will swoop in when it finally grinds to a halt.
If you want hours and hours of Fun Reading here are the 175 Pages of the FACTS (Form 10K)
If anyone things they can dig they way out of this Hole I'm all Ears!!