TSX:CUS.DB.D - Post by User
Comment by
Khersonon Apr 07, 2015 3:48pm
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Post# 23605593
RE:The worst is behind us
RE:The worst is behind usNawaralsaadi wrote: The worst is behind for Canexus. The major uncertainty of capex at NATO is over with the project virtually complete with very minor tweaks required going forward to move to 10.5 trains/week. The management overhaul is over, and the debt accumulated as a result of NATO’s construction will be addressed in the next few months through an M&A transaction. It is highly likely that Canexus will secure a partner at NATO, my analysis of the Canadian energy sector and its associated infrastructure requirements argue strongly for a full development and high utilization at NATO. NATO is core asset for many producers; pipeline and midstream companies due to its bitumen unit train terminal operations, condensate back haul facilities, extensive storage potential and upcoming DRU infrastructure.
Canexus core chemical business is sold, steady producer of cash flow and a source of consistent dividends, should Canexus retain a portion of NATO following a partial divestment of the terminal, it will enjoy both a cleaner balance sheet along with a growth exposure to this key asset, and should they fully divest the asset, the company will be virtually debt free and it will have the luxury to buy back shares, expand further into its core business or pay a sizable special dividend.
Canexus investment thesis remains intact, and while I don’t expect a move to the $8 to $9 anytime soon, a move to the $6 to $7 range in the next couple of quarters is very likely, at $6.5 that would translate into 30% return plus a sizable dividend.
Regards,
Nawar
Posted August 6, 2014...
Great call Nawar...
Kherson