RE: RE: RE: Risk vs Reward??!?? - they just raised $40mm of 6.5% unsecured debt... did the Quebec gov't take that down?
- DP prices will go lower... why? more supply... right now there are mills that are slowing down or shutting down cause they are losing money at current DP prices. Look at how many P&P mills are closed and are being converted into DP mills. SPOT PRICE is always relevant. DP will go sub $500/ton
- if Chad leverages 2x's he will bury FTP twice as fast, if he leverages 3x's he will bury it 3x's as fast.
- you are saying that FTP is 50% below breakdown value?? can you show me how you got to those numbers
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I did say the majority of their debt is non-recourse (not all their debt). The debentures you speak of above would require a lousy $2.6 million dollars, or $1.8 million, after tax, to service it. Dresden delivers over $30 million of EBITDA each year with a capacity increase coming this year.
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In the last year, there have certainly been a lot more companies announce that they are not going to increase their DP supply, then the ones who announced they would be. As long as FTP gets their costs below average, they will be fine.
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Who said that Chad was going to leverage 2x, 3x. He is going to take the cash flow from Thurso and Dresden and make acquisitions. That is what is meant by leveraging the existing assets. I am sure some debt will be involved, but I doubt you will see Chad risk his largest personal investment, with too much debt.
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Dresden is worth about $10 to $15 per share. Landquart would certainly garner $5 or more and Thurso is worth well over $40 and probably more like $60. Add them up and see what you get. Until someone makes an offer, they are just numbers and I would doubt very much Chad would sell Thurso, right now, even at $60 per share. Those are my numbers and I am comfortable with them.