MagIndustries Corp MAAFF

Who holds the top cards now.

[Brainwave1]

This is not a good position to be in for MAG or for us. Things are proceeding as per the script with the ex-Sinohydro deal. Complant probably does wish for a deal but at the lowest price they can get. MAG has few other options - they can wait for Complant to come to them with an offer, while they bleed cash, and try to look like they have other options in the meantime. It isn't clear that they do, really, and if one does materialise that is when Complant can get serious--their holding the cost savings of the engineering side of things probably gives them the ability to outbid most other offers.

The government of Congo, will not be entirely sympathetic either about MAG walking away from  Complant and delaying things another year while they look for someone else; the government's interest is only that the project is built, not that Canadian investors' rights are protected. So, unless MAG management pulls a rabbit out of the hat we may end up just having a deal some where around current levels (!*) and which, incidentally, is about the same or less than the price of what MAG has invested so far--roughly US$150m, meaning that the value creation has been nil. Waiting to be proved wrong, of course, but yes, mighty disapointed to have put trust and cash in hands of MAG management, who did everyting right for years and watched it all slip away at the last mile. It's been an interesting tale to watch re the project cycle and what can go wrong with a good news story; I've learned a lot. Caveat emptor.