Regal Partners Ltd V.RPL

RE: If management is silent, call them...

[InvestorSuperfan]

Thanks for posting the info Exomax. After reading your summary, I came away with the following: Glad to hear that President / CEO Michael Erickson and VP Finance / CFO Alex Wyile apparently have a lot of their own money invested in this company. If the big issue for RPL was missing their debt target by $20M, then selling "non-core" assets for $13M to pay down part of the $20M shortfall would leave a net shortball of $7M to make up. The investment community has known about the $268M drawn on RPL's $325M line of credit and the $13M asset sale to reduce debt since RPL's press release dated March 21, 2013 (I believe it was released after-hours as is typically the case). The price of RPL at the close of trading March 21, 2013 was $1.93. It closed down over 11% at $1.70 on March 22, 2013. The share price now sits at $1.18. It's hard to square how a $7M net shortfall at March 21, 2013 would result in a tanking of the share price if this was the only issue. Add to this RPL's recent $10M increase in it's line of credit (I suspect they asked for more but didn't get it - see a previous post of mine), and it seems evident that there are more issues than the $20M miss in the debt target at play here. My suspicion is RPL's debt has increased even more since March 21 and they need to come up with a plan to reduce it. If the company is not for sale (which is a statement I don't think should be made - if the offer price is generous enough, why wouldn't you at least consider a takeout?), they can use one or a combination of the following to pay down debt: sell assets, cut/elminate dividend, generate enough excess cash flow from sales and use it to pay down debt. I suspect they are getting lowballed re. asset sales, so that may be off the table. Counting on generating enough future cash flow to pay down debt is risky and, depending on where the debt sits as I write this, could be dangerous. That leaves the dividend. I believe there are approximately 203M shares outstanding. At an annual dividend of $0.23 per share, RPL is paying out approximately $47M in dividends each year if the dividend is maintained. If they cut the dividend in half, that would mean the company could retain over $23M more per year. This is a significant amount of money for a microcap company like Renegade and the circumstances they are in, and would no doubt help them deal with the excess debt as they would retain almost $2M per month that would not have to be paid out in dividends.