RE:RE:Thin L2 and stock buybackJR, years of trading TSXV junk must have really screwed up your investment biases. Just because a company has debt doesn't mean it's bad. GPW's debt is at a really low rate and the bulk of it is accounts recievable factoring. They are nowhere near any default on it. A profitable company should have debt and a profitable company with a low stock price should be buying back stock over debt. Here are the terms of their debt. How many people or TSXV businesses get a loan at only 0.5% above the best lending rate?:
The Corporation has banking facilities with the Hongkong and Shanghai Banking Corporation (“HSBC”) as follows:
(a) Bank overdraft line whereby GP Express was granted an overdraft facility in the amount of HK$15,000,000 (US$1,933,500) (2013: HK$15,000,000 (US$1,933,500)) at 0.5% over the bank’s Best Lending Rate (5% at September 30, 2014 and 5% at December 31, 2013). At September 30, 2014 HK$7,850,196 (US$1,011,105) (2013: HK$11,024,210 (US$1,421,021)) was utilized.
(b) Bank Guarantee Line was granted in the amount of HK$28,000,000 (US$3,606,400). The bank charges on this Guarantee Line were at the rate of 2% per annum on the guaranteed amount, with a minimum charge of HK$1,500 (US$193). At September 30, 2014 HK$11,483,440 (US$1,479,067) (2013: HK$24,077,290 (US$3,103,563)) was utilized.
(c) GP Express obtained the factoring services from HSBC at the maximum amount HK$65,000,000 (US$8,378,500) by advance payment of GP Express’s qualified accounts receivable up to 90 days credit period based on 75% (previously 70%) of the invoiced value. The discounting fee is charged at a rate of 0.25% per annum above the Hong Kong Best Lending rate which is 5% at September 30, 2014. The utilized factoring services as at September 30, 2014 amounted to HK$52,808,068 (US$6,801,624) (2013: HK$72,884,785 (US$9,394,849)).
(d) GP Express was granted a Clean Export Loan with a maximum amount of HK$5,000,000 (US$644,500) at 0.25% over the bank’s Best Lending Rate (5% at December 31, 2013 and 5% at December 31, 2012) upon the presentation of certified true copy of invoice(s) and valid transport documents evidencing shipment of goods related to the invoice stated. Financing period of the clean export loan is 90 days. As of September 30, 2014 and 2013, the amount drawn was
$nil.
(e) Standby documentary credit facilities were granted in the amount of HK$15,000,000 (US$1,933,500) at 2% per annum. As of September 30, 2014 and 2013, the amount drawn was $nil.