structured for a spin-off ? etc(drafted on Monday )
To respond to the comment(s) on splitting up TNK
( I drafted this the other day and now acknowledge that Deadfred is also ( right -)on the topic
and I see the recent NR from TNK also covers the past history and structure
Tenke IS now structured for a spin-off on DRC Fungurume copper
Some history:
A Lundin pumped about $50 mil into DRC
and sponsored Kabila Sr.
then the civil unrest/war broke out
(and now Kabila Jr is leading progressively)
Stock fell and A L coverted much of his debt into shares , somewhere in 50 - 70 cents range, about 2000 ?.
At this point one can see this would continue to be his flagship development company
so he would put the best projects into it.
So he started accumulating quality areas in S America which have turned out to be of good potential.
Note about 18 to 30 months ago? , I thought he transfered their now 24% ? portion of Fungurume into Lundin Holdings?
( or it may have always been in that structure?)
a subsiduary of TNK. Somewhere in there former partner BHP backed out and PD took up the slack.
So it is now structured for a spin-off of the asset ie L H , if/when PD ready to buy
ie TNK will then be the S Am ops with a bunch of cash in the subsidary of TNK.
( ie Lundin Holdings)
It would be interesting to see what the development agreement with PD is
ie 24% equal funding by L H or more of a free carry to L H on funds to develop.
Or clause to reduce the 24% if PD funds development fully.
I almost expect it is a free carry or I think TNK would have held on the more than 24% ie some was
already turned over to PD about 4 years ago as I think TNK controlled up to the 75% in the past . (and not counting for Gecamines ( govt) portion )
Lundin likes to sell out fully for cash I expect. ( guess $400 US mil for the 24% ? = $10 Can Sh cash )
( hummm my "guess" matches Deadfred number too - Thanks ) Of course it is likely only PD will be the bidder.
- anyone with better calcs?
Then he could then spin off L H to all shareholders and build another company ( his 2 sons)
or have a royalty agreement with PD and collect dividends in his retirement ,
but more likely they sell as is the pattern for Lundin group .
He has a large % holding in L H holdings I expect.
And TNK would then be the S American projects.
btw R Rule likes to subtlely mention TNK every chance he gets ,over last few years.
I expect he has held some stock for years ( from .80 ?) and recognized it as a great play for the DRC asset
( waiting for the country to stabilize).
For disclosure , I was caught by the force majeure ( having some from before the rollback )
and then added more in the 0.80's,
( sold some a touch early in the 3's , and so am in a good( cost ) position now
Another nice steady move today ( Tues ) and volume today Wed
Are we going to see the 8's or consolidation in the 7's ?
Humm ,not a lot of active postings / following TNK, but then the not-so-easy? money has been made.
But who knows value if was to split into 2 companies down the road. $10 and $3 ?
All these years and has anyone ever seen ( or posted ) a brokerage report on Fungurume NPV value
while it was a great buy?
Regards U