This is one of those examples where investors should pay attention, including funds and institutions but more importantly Private Investors. New World Resources (NWR) is a classic example of higher costs, too much debt and an unrealistic ability to make returns for shareholders evidenced by the dire share price performance. What value will be left for shareholders?
Investors should avoid or short companies like this, I have and will continue to do so. This has only come about by a company needing to leverage significantly just to maintain operations and/or productions. Investors seriously need to consider the leverage and what that means in a deteriorating market of the product the company sells, produces or manufactures. You'll note the commonalities with POG (Petropavlovsk: still can't spell it properly without checking) and the share price performance, yes at the current prices POG can maintain debt repayments/reduction but the question should be, when is there a decent return for shareholders?
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| New World Resources as of 24 January 2014 |
Atb Fraser
Morning
ReplyDelete15p target now lol
http://www.americanbankingnews.com/2014/02/22/jpmorgan-chase-co-lowers-new-world-resources-plc-price-target-to-gbx-15-nwr/
Oli
Fraser/Oli
ReplyDeleteWhen I looked at NWR and the debt negotiations likely a few months ago I concluded that the shares could be worthless, unless the debts holders are v generous. I guess the only thing keeping things running is the fact that the bondholders prob couldn't sell the assets, so they may support the restructure and Mr Bakala, who may be prepared to throw good money after bad here. It was the clearest short I could see on the market. It will be interesting to see how this pans out.
Although I don't trade much I suspect I will be having a bit of fun with CHL later or tomorrow. I can see sell on the news being a stampede. I am however expecting a favourable juri announcement.
I still don't get BLZ, but it did trade at around 50% of its cash position for a few years so here we go again. I can see that the new "owners" are a mystery to most and I didn't like there last attempted purchase so perhaps a 50p special dividend is on the cards soon :-)) Just as long as they don't end up with a chunk of NWR- that would serve me right. BLZ are a bit like aluminium to me- a parallel universe. Don't laugh too much or you could get a hernia :-)
Cheers. The Leggie
NWR RNS
ReplyDeletehttp://www.investegate.co.uk/new-wld-res-plc--nwr-/rns/resignation-of-director/201402241647488113A/
Non-Executive Director Kostyantin Zhevago stands down
New World Resources Plc (the 'Company') announces today that Kostyantin Zhevago has resigned from the board of directors with immediate effect.
Mr. Zhevago is the chief executive and controlling shareholder of Ferrexpo plc.
In 2009 Mr. Zhevago was nominated to the board of New World Resources N.V. (and later to the board of the Company) following the establishment of a strategic alliance between RPG Industries Limited, a member of the BXR Group, and Fevamotinico S.a.r.L., the controlling shareholder of Ferrexpo. This strategic alliance has now been terminated by mutual agreement in the absence of identification of joint projects to be developed.
Gareth Penny, Company's executive chairman, said: "On behalf of the board, I thank Kostyantin for his outstanding contribution over the last five years to the life of New World Resources and to the board in particular. His broad experience has been enormously valuable to the Company. We are sad to see him go, he will be missed."
Evening.
ReplyDeleteHaving never looked at the stock, apologies , but I had to chuckle when I opened the 2013 FY unaudited results, only to see not far down the page, some sort, of cash saving statement in the Chairman`s statement.
Their was a common word in those results, its called "down"....
Well played on that one F !
Spac3y with the depart of the Ferrexpo chap, things don't look good. There's always a temptation to throw bad money after bad with these types of ventures. I don't see there's an investment case without some significant capital restructure. Although there's a corking return on New World Resources Debt 61/62% currently and I suspect increasing. :-)
ReplyDelete