GREY:HRIVF - Post by User
Post by
cjsellon Mar 03, 2010 5:20pm
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Post# 16839996
Nothing but conjecture and innuendo
Nothing but conjecture and innuendoI have seen nothing on Sedar concerning any "official" announcements on anything from HRG/Severstal. So anything you read....is not "official".
Severstal is having trouble moving their debt, new notes are being floated and raised monety paying 12%-13% after discount. Their debt service levels as a function of EBITDA rose from .6 to 9x. Severstal needs to roll over 1 BILLION (short term) this year and almost 5 BILLION (short and long term) between 2011-2013. Imagine they used to pay 5-6% now their debt service cost doubled and they are still losing money. They may have to try an IPO sooner than later, they are out of cash!
Severstal lost close to a BILLION dollars last year, and they are still losing money now. Unless Mordashov is fronting all the funds necessary to try and take out Crew, Severstal's lenders will not allow them to take on more debt. Crew is not making money, rather they would be a net user of cash...and lots of it. Maybe not a bad investment in 3-5 years, but not now.
If Severstal wants to go the IPO route, they will want to maximize their portfolio both in terms of cash flow, and reserves.
Anyone going to PDAC next week? I am going and plan on asking a lot of questions to other gold companies regarding Severstal and their take and will report back.
Lastly, why on earth would someone buy into anything Severstal has to offer anyway? As a company they have run themselves deep into the red. Cheer up, each day HRG gets stronger, more profitable, no debt is just around the corner.
CJ