RE:Where is our December Quarterly Dividend?I agree with the comments, the dividend does not matter in the overall scheme of things as from here on TWM and LCFS are all about free cash flow, but at the same time it will lead to a rotation of shareholder base, from those that need a dividend paying stock to those that are growth oriented and leaves TWM with the label of being one of the companies to "cut the dividend".
First, closing of the transaction, even though there was no real concern, eliminates uncerctainty, so it's good news.
Second, there is a timing mismatch. ALA shares valued at today's price of $27.41 are worth $341.8 million, but need to be montetized, which will take some time and will possibly be at a haircut if they choose to sell as a bloc through a broker. I am not sure about the outstanding debt, how quickly or instantanteously this can be paid back; the CB won't mature until September 2024. On the other hand, the cash flow from Pipestone is gone as of today. Net net this will work out and be cash flow accretive, eventually, as Management stated, but maybe not immediately.
The closing announcement raised other questions and leads to speculation, trying to read in between the lines. Why did they announce a new credit facility when they essentially just become debt free on paper? Simply to replace the expensive old facility, but if so, why didn't they communicate this properly?
I believe that one of the next steps might potentially be to buy out the 31% minority in LCFS. They stated the desire to simplify the corporate structure and I think the nature of LCFS (being part of PGR, sharing infrastructure + the legacy assets from TWM) will make it impossible to sell to an outside party. Assuming that the HDRD cash flow will be as successful as advertised, and believing in the growth potential from future projects, they should have an interest to buy back the remaining shares, especially when they are trading at 50% less than the IPO price. When they talk about focusing on growth initiatives, isn't LCFS where all the growth is?!
One concern is that Management might resume its empire building, having all of a sudden this excess liquidity. I don't think so, listening to them, think that Rob Colcleugh is a different kind of CEO, certainly hope so, hope that they have learned from the strategic mistakes of the past CEO, but it's certainly a concern.