The Capital Group buying to reduce average entry price?
Plan B anticipated by market?
AF buying?? Hunan buying??
Something to do with shorters? (I don't profess any knowledge of the mechanics of shorting)
Who can tell, but why quibble as a holder I made a nice little profit on the 150k I bought because I set an order last week and instead of day only, set it as GTC. As I have not been trading in the last week I did not go into Macquarie Trading Platform, just the screen that showed sp action.
Some punters (pun) here on the FMG thread are calling the demise of FMG, I think they still have some headroom and alternatives available.
Say they get a customer to stump up US$1.0b as a prepayment (they have done this before) add this to the $1.6b plus cash on hand (Dec 2014 balance). The $1.0b equates to around 50.0mt of ore at say $50.0 realised price, and would have staggered delivery dates, so no big deal here as they have the ore, obviously a discount would be offered for the prepayment.
From the available funds of $2.6b, pay the $1.0b loan due in 2017 now and the $400.0m due in 2018.
Interest saving of around 8.00% (higher cost loans) = US $112.0m, reducing all in cost by another US$0.70 going forward.
With debt now reduced by $1.4b, it leaves the $4.9b due in CY2019, $1.5b in CY2020 and $1.0b due in CY2022. Total gross debt now $7.4b down from $8.8b., and interest costs reduced by a further $112.0m
Lets leave the $1.5b due in 2020 and the $1.0b due in 2020 as is.
Go to the market and refinance only the $4.9b, and extend the repayment due dates past 2022 I think the holders of the $4.9b secured notes would jump at the chance to refinance. albeit at a higher rate say 8.00%, rather than take a risk of FMG defaulting.
FMG would have no debt repayments due until CY2020, $1.5b and CY2022 $1.0b, hopefully cash generated from now until then would allow for full repayment, leaving only the $4.9b
Hopefully from now until 2022 the IO price and market would have stabilised to say at least $80.0mt
If someone posts that prepayments are a bad thing, I will open the window and scream, it is actually a very clever way of funding the operations, the price received on ore contracted to be delivered in the future would be at a discount, they have a sh*t load of ore so no problem there and who knows IO may stabilise at a price point above $60.0mt so they will be still cash flow positive.
Your views, please?
FMG Price at posting:
$1.99 Sentiment: Buy Disclosure: Not Held
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)