RE: Cost of Financing I own CHL as well as DA.A.
I purchased it for the yield. The differences I see between CHL and DA are as follows;
1) CHL is now much larger than they were at Sep.30'10 since they purchased an operation in NZ for around $130 million. Of that amount, $30 million was for cash (essentially blowing their hoard) and $93 million of debt (of which $72 million remains).
2) They now operate 186 helicopters vs. around 65 for the Great Slave division of DA.
3) CHL has a large contract with the Canadian Forces in Afganistan, something DA doesn't have and something which must be winding down.
4) CHL seems to be more oil/gas oriented, particularly offshore drilling platforms.
5) rather than being hobbled with interest rates of around 10% for DA, CHL is only paying about 1%. This is a massive bonus for CHL.
All in all, the bogie man of overpaying for assets by the prior management at DA is still hampering them with the legacy of debt and the fact that in excess of $100 million of goodwill has been written off. CHL only has $25 million of goodwill on it's balance sheet. The bottom line is that the management at CHL did a way better job of using cheap credit to pay fairer prices for assets than did the prior DA management (overpaying with very expensive debt). It is unfortunately going to take DA time to dig out of the mess that was created by the 2008 meltdown that didn't nail CHL. The fact that the CHL share price is 6x higher than DA basically is the result of their vastly better use of cash flow over the last few years than DA in my opinion.