Katanga Mining Ltd Ord KATFF

Glencore Onwership of KAT shares..Latest

[stockhunter20001]

Can somene try to to go through Glencore latest financial report and try to see how many KAT shares Glencore owns in thier report? 

I could not find it, but I think there are googd accountants in this forum, who can.

[topdop]

@stockhunter20001 Investing 101 go to SEDAR and pull up KAT's last AIF & MIC (both being annual disclosures). If you don't know what those are, Google can tell you. As listed on the TSX, KAT has a regulatory requirement to disclose to the markets as and when any shareholder above 10% changes position.

[stockhunter20001]

Thanks Topdop, I am looking for if Glencore has bought more shares of KAT at those low prices, and they own now more than 86% of Katanga.

[topdop]

I know. And exactly why an OSC mandated PR would already have been released. It hasn't. Ergo, no change in the ownership of KAT by GLEN. Its not complicated. PS: I truly don't believe GLEN has any material interest in adding to its share position. And such position came about almost by default, not by any particular acquisition strategy. Remember what GLEN is. Its a Commodities Trading

[bigguy56]

Topdop: In your opinion, does Glencore intend to keep KAT long term; are they interested in it as a long-term investment? Everyone on this board seems to be assuming that Glencore will simply roll over the debt. Well remember, that costs Glencore money. Not too many employers do real capital budgeting and most employees are not exposed to it, but I was in one place that did it religiously and I

[Johnnyola1]

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[patels96]

I posted a link to my financial model, did you look at that? If not take a look

[Johnnyola1]

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[Johnnyola1]

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[Johnnyola1]

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[stockhunter20001]

Topdop, I am not a mining expert like you, but I have been reading Glencore annual report yesterday, and this is what I found, please correct me if I am wrong. -June 2018, KCC swaped the debt to Katanga to equity, and to make sure Gcamines/DRC not to get diluted (per contract), DRC recieved $1.4 billion as KCC equity as a "gift", so Gcamines/DRC equity in KCC stayed at 25%. Which means

[patels96]

The interest is irrelevent to GLEN as upon condolidation the interest expense and interest income report on GLEN's finaicals are eliminated. The accounting works as such that when GLEN issues the debt its an asset on GLEN's balance sheet, but a liability on KAT's. Since GLEN holds ~86% of all of KAT's assets and liability are recorded onto GLEN's balance sheet, thus eliminating

[stockhunter20001]

@patel96, so you think they will just roll over the debt and no debt-equity swap  as they did with KCC/DRC case.

[patels96]

That is exactly what I think will happen, if anything they will spread out the maturities of the different facilities when they roll out the debt so that they can reduce the indebtedness as the loans become due.

[stockhunter20001]

@patels, then can you explain why the share prices continues to drop?!

[patels96]

The share price will remain dispressed until sentiment improves in the general mining industry as well as for KAT, some of the hurdles we need to get through: US-China Trade resolution, will boost copper prices and the market will start focusing on the supply deficit rather then macro variables Need to get resvised production guidance from KAT, which should be released Q3 2019 or

[patels96]

Remember that KAT is a low cost large scale operation, In theory, we want a low cost operation (which KAT is), somewhat high interest expenses (deductibiity of Interest will lower taxes), and low CAPEX in the furture...which will lead to higher net income and net cash flows. But until that happens we need to get over the hudles I explained below. Based on my analysis, the optimal debt given debt

[Gws0623]

I would love to see your model.   please send to [e-mail]

[DasuDasu1]

KAT's debt might balance out inGlencore's balance sheet, but it doesn't if you're only a KAT shareholder. Furthermore, the interest payments are indeed flowing from KAT to Glencore. Not sure how you're coming to any other conclusion. Who do you think collects the interest payments exactly? What is going to happen is very obvious. The debt will be refinanced at the most

[Lech1988]

The DRC literally came after Glencore last year for extracting too much value from these companies via egregious debt and debt servicing cost...do we really have that short of a memory?

[DasuDasu1]

Yeah, because the DRC had leverage: do as we want or we nationalize the mine. Retails here don't even have a board member that pretend to care about them. And let's not forget that Glencore solution the KCC episode was to shift more than one billion in debt onto KAT's balance sheet. They could do so with impunity.

[patels96]

I'm saying that interest income on GLENs P&L gets eliminated due to accounting for consolidation. GLEN still gets the interest payments but due to accounting doesn't trickle down to shareholders of GLEN

[DasuDasu1]

It doesn't balance out exactly precisely because KAT is not wholly owned by Glencore. Glencore gets all of the interest cash flow, but KAT retail shareholders lose out on their 14% ownerhip because for them, those attributable earnings disappear without ever being seen again. Glencore sharesholders do profit directly from that 14% mismatch. You're right that the other way to profit would

[patels96]

I don't want to argue just look at intercompany and related party transaction under IFRS. If a company has significant influence over it's subsidiary then it will be accounted for using the consolidation process, in which the parent company will account 100% of the assets, liabilities, revenue and expenses (this includes interest expense). The 14% refers only to non controlling minority