OTCPK:TMBMF - Post by User
Post by
nambuon Jul 23, 2009 10:09pm
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Post# 16162273
Timberrrr !
Timberrrr !Huge day on TSX, everyone with a public issue on moose pasture was up today - and of course the Bank of Canada declared the "recession is over"... and Tembec hits a new all time low. Only a week to go until 3Q earnings announcement the street is saying what has to be said.
Guess no matter how much the central bank tries to talk down the dollar the CAD$ approach to parity is inevitable - much to the dismay of pulp, paper and timber. All the mill value-add and modernization in the world can't create demand that's not there - against a lethal USD$ export currency overhang and an uglier tax picture to top it off. The only thing left is to kill capex (no improvements or repairs), inventories (no logs, lumber or pulp please) and of course opex (no employees/no shifts - or less management)... and then either consolidation or insolvency (in no particular order).
Sad days - but next Thursday 3Q will be telling. Need these numbers next couple quarters from the likes of Tembec, International Forest, Canfor, Western Forest, Domtar, West Fraser etc... time to sort out the dead wood.
Count on a move to consolidations next quarter as credit conditions ease in these strata and ratings - question is will Tembec have any equity left if forestry mergers take place? High risk premium to be holding a diluted stake in an entity worth less than the sum of it's parts? After the reboot spring 2008 (fresh start accounting and converting 1.2 billion of their senior notes to equity) where will they go from here - new unsecured debt and/or reverse split to the equity?
Just IMHO.
Hope for the best for TMB - shareholders and employees good luck and God Bless !
Watching closely for next week.