question for gurus about cash pile ....., page-4

Hi,

the company does have 30million in debt to pay back plus they have to fund Maitland.

I think your question is a bit weird though. Remember that the purpose of a company is to make money. Why the shock horror when you find one that actually does this??? Maybe you've been following T4P's no-hope speccy stock ramps for too long.

At the end of the day, there are a few things that could happen if PPP ended up swimming in cash:

1. Takeover bid. If you were AWE or NZO, and could buy 10% of Tui at 'half' its value, would you be interested?

2. Share buyback scheme. PPP could use the cash to go on market and buy shares. This means that you as a shareholder hold a bigger proportion of the company. BHP was until recenly buying back 1million of its shares every day on the London market.

3. Special Dividend. The company could simply make a large dividend payment to shareholders. If a 30c company were to pay a 3c dividend (with a promise of 3c again in the future) then that would frankly be 'huge', and could not be ignord by the market.

4. New acquisition. Company uses money to farm into new projects. You'd have to look at the directors knowledge of the oil industry and track record of success.

5. Directors run off with the money....Dare you to ask that one at the AGM. Another poster on here recently called them conservative old codgers, so maybe you should wear a helmet in case a walking stick comes flying at your head.


Joel