LIQUOR STORES NA LTD 4.70 PCT DEBS T.LIQ.DB.B

RE:RE:Capex

[Goldbuggy1]

Goldbuggy1 wrote:

mercatos wrote: I dont think we are going to have any share buy backs in the next 2 or 3 years or ever....if anything LIQ should go through a share split and then file a shelf prospectus.  Raise more capital with a lower dividend/share

Anyway what I really would like LIQ to stop doing is investing in Alberta.  Put a freeze on any investments, store freshening, or buying any other business like RUM.... Close down unprofitable stores immediately.  Spend freeze for 2 years would be a start.

The capital would be best used investing in new store openings in the US prefereably eastern US.

Also lets not forget that US market is $200 billion opportunity vs aprox $20 billion in Canada.  I just wish LIQ would be more aggressive in there intent to expand in the US.  By sending a message of diverting Capex to US expansion would show investors strong intent.  I also would like LIQ to have a more aggressive tone to the market on their growth plans, frequent news releases of new stores opening, record breaking sales...etc...

I am trying to follow you on this share split, but I am getting lost. If the company did a 2 for 1 Split then each Shareholder would end up with double there shares. If you kept the Dividend at $1.08 / share then the Dividends would be double to what they are now. The Share Price and Net Earning per Share would also be cut in half and the Share Price would be $3.70 / share right now. So I think you mean a Stock Consolidation or "Reverse-Split" . In that case in a 1 for 2 Consolidation Shareholders would 1 share for every 2 they had, the stock price would double to $14.40 as would the earnings per share, but your Dividend yield would also go to 7.5% from 15%. Also if you keep the same Dividend at $1.08 per share you are actually only paying half as much in Dividends as you did before as you now have only half as many shares, but still a perfect record. Then do a Public Share Offering to raise money at $14.40 / share. I like your idea! I think your idea has merit! Especially if the do this next share offering on a US Stock Exchange and get some US Buyers involved as we will have close to 50% ownership their by then. Maybe even attract some Institutional Investors. Sure! Why not?

To tell you the truth the more I think about it the more I like your idea about a Reverse-split. Especially if the company plans to cut this Dividend in half anyway. With a Reverse-split I still only end up with half the Dividend I used to get but at least I don't think we would suffer on the Share Price to. In fact the Share Price may even go up as at a $1.08 Dividend per share, and only half as many shares to give that to, everyone would know the company can afford that and 7.5% is still a very good Dividend. But if the company just cut there Dividend tomorrow to 7.5% we would still only get half the Dividend but I would also expect the share price to drop as well on that news. On a Reverse-split the share price would also double and be about $14.40 a share so still high enough to sell more. Hell! They could even sell 13.75M Shares at that price in the USA and get back to having 27.5M Shares Outstanding, with half in Canada and half in the USA. Then having about $195M they could pay off all debt with this money or keep the Debentures and use the excess cash to grow. Yep! This definitely has merit!