Noranda Income Fund Unit T.NIF.UN

Reserves

[iwasgold]

This was in the 2014 annual report: (not 2015 as I wrote earlier):

The reserves that have been generated since the Fund's refinancing in 2011 have been used to reduce the balance on the Fund's ABL Facility, consistent with the Fund's desire to reduce its debt as it approaches the end of the initial term of the Supply and Processing Agreement.

Also:

Cash available for distribution is calculated by taking cash provided by operating activities before distributions to Unitholders and changes in non-cash working capital, and by subtracting purchases of property, plant and equipment, debt financing cost and permanent debt repayments, cash provided by the Manager's operating activities and amounts retained for reserves. (bold is mine).

Clearly the reserve account money was money that otherwise would have been available for distribution.

The amount taken out of the reserve account in 2014 was approximately 46.292 million. I challenge anyone to find it listed in the 2013 annual report (ie the year before the account was drained). The balance sheet is titled Consolidated Statements of Financial Position, whatever that means. The ABL in 2014 rose from almost nothing to 43 million at year-end.  Inventory in 2014 went up by 41 million.  Where did the rest of the money go? If ABL went up by 43 million and inventory by only 41 million, why did they need to add the 46 million reserve to the ABL? 

I've said this before, but this company screwed the shareholders in a new way.  Anybody reading this, like Northforce or Bigbird, who seem to consistently push the company and treat it like a regular ethical operation, should realise that it is most definitely NOT. That 46 million was money withheld from shareholders by pretense, and then used by the company for a purpose that was never reported.  Theft, from you.

Anybody else read that transcript of the AGM yesterday and scratch their heads at the answers from Paul?  The man made no sense whatsoever.  It is obvious, people. This company will NEVER restart monthly distributions.  It will NEVER be sold to anyone else, barring bankruptcy. Hope you enjoy your fat, juicy 3 cents/yr dividends, because I don't see anything better coming, ever.