Fortress Global Enterprises Inc - Class A FTPLF

State of FGE

[Contrarian333]

Dissolving pulp price has been weaker as it often is at this time of year.  Expectations are for higher prices as the year progresses which is the typical seasonal pattern.


While 4th Q results were pretty good - balance sheet cash was lower and 1rst Q results will be hurt by the usual issues of cold weather (frozen chips) and electrical blackouts.

2nd and 3rd Q should be strong with 5th digestor coming on stream and recent operational improvements.

Expect a balance sheet initiative to solve for a more stable and permanent capital structure.

[sculpin2]

New all time lows below a $1. So... "Expect a balance sheet initiative to solve for a more stable and permanent capital structure" Sounds ominous. Can they sell the cogen? Probably the only really marketable asset right now to bring in cash. Valued it at $120mm in one presentation. Any ideas what the ebitda on this is?  Really in today's market a one asset pulp mill in a

[Contrarian333]

sorry - didn't mean to scare you.  i believe a negotiated balance sheet outcome with be positive for the company and its shareholders.  it probably involves changing the terms of the current government debt to allow an incremental financing which would be used to take out the converts.

[Contrarian333]

"will"

[nkbourbaki]

Can you elaborate on your thinking here?     What do you have in mind re: incremental financing?  I'm assuming that there will be some type of debt-equity swap. There a lot of issues/unknowns overhanging the company.  As Sculpin noted, it's a highly levered single-asset player in a commodity market. We're very late in the business cycle with interest rates

[Contrarian333]

Restructure of gov't financing allowing a carveout for further financing the proceeds of which would be used to eliminate the converts.

[rad10]

That would be best case scenario for debenture holders.  But - they came through with the 2016 debentures - redeemed at full face value having traded into the 40s......................  ;-)  Chad will have something up his sleeve that prevents him getting diluted............... GLTA

[Contrarian333]

I'm not suggesting that this would be a dilutive event.

[nkbourbaki]

I'm likely just daft, but I'm having trouble seeing how they can fix it without a dilutive event.   I.Q. already owns $140m of the $220m enterprise value.  It seems you're suggesting that in some manner or another they'll pony up another $60m to take care of the converts.  But if IQ were up for this type of deal then surely they would have consummated when

[Contrarian333]

Let me just observe that that IQ benefits from Thurso in many different ways and if there is a means of restructuring their debt (without writing another cheque) this might be palatable to them. T

[nkbourbaki]

Yes IQ would certainly want Thurso to continue to provide jobs.  They've been a very friendly lender thus farl and allowed Fortress to continue capitalizing interest as it comes due.  What I don't understand is how you see them further supporting Fortress without writing another cheque or doing some type of debt-equity swap.  You had mentioned some type of "carveout

[Contrarian333]

Changing the terms of the IQ debt would allow for incremental term debt which could be used to eliminate the converts. Not saying IQ wouldn’t want some warrants as part of the package but such a deal would push a lot of the enterprise value back on the common shares until such time as we get the inevitable DP price rise.