RE: RE: RE: Seems to be no end . .Golong:
Here is what the FS says about the value. Looks like the value is $4.1 million net to PKP. But look at the second paragraph! - the problem is that PKP only owns 46%, the rig was not manufactured to specifications, and the the sale is bogged down in litigation/arbitration between HighKelly and the owners of the other 54%.
"The estimated fair market values of the drilling rig as at August 1, 2010, as indicated by an independent appraisal, was $9,223,200 gross. On this basis, the carrying value of the Corporation’s 46.25% interest was written down in the current fiscal year by $2,023,000 (May 31, 2009 - $2,407,000) to $4,137,260, which amount is net of estimated selling costs.
The Corporation is informed that KKPL has not yet obtained all of the information that it requires to be assured that the rig meets the contracted specifications such that it would be in a position to formally accept the rig. On August 18, 2009, KKPL initiated an arbitration proceeding in The International Court of Arbitration against the manufacturer of the rig in respect of the claim by KKPL that the manufacturer failed to comply with its contractual obligations to manufacture and deliver a customized rig to KKPL in compliance with specific contracted requirements. Pursuant to KKPL's request for arbitration, KKPL is seeking to reject the rig and recover the amounts paid or, alternatively, damages for the alleged breach. Upon resolution of this dispute, the Corporation and KKPL have undertaken to sell the rig."