Note to MODS: I think this post of of use to the GGP community on a number of levels. Not cross promoting. In fact this is a word of caution - IMHO just stay with GGP if you want GGP shares!
Hi Blueballs and others,
I did a fair bit of research on the weekend. At first AKW seemed like a great backdoor play to get some cheap GGP shares. Then as I looked at AKW is seemed like fantastic value in its own right. Then as a looked deeper there seemed to be all sorts of funny related party transactions that I feel very uneasy about. About 5 mins ago, I pulled my order for AKW shares.
Research notes below. DYOR. Buying AKW may be play of the year or a horrible mistake. Hope it helps whatever you decide.
AKW - approx $3M liabilities ($400K to be paid in May 2011, rest non current) - approx $3M in cash (still in transit from MDA?) - $3.5M in loans and convertible notes to MDA - 107M shares in MDA ($2.7M worth) - New Caledonian assets (bought for $2.4USD, may sell for $8M AUD to GGP) - Market Cap $4.7M (trading close to lows at 10c per share) - 1:1 rights issue upcoming at 10c ???
MDA - Have aquired Blackgate Resources for $24M USD - Trading at $24M AUD (lows) - Not much cash - will likely need Cap raise - Aquisition of Blackgate was a convoluted and risky play. Also very expensive relative to Market Cap. Why so desperate - is it that good or did it allow the owner of Blackgate to cash out with $24M and laugh all the way to the bank....
Too Many "Blacks" (and other funny connections) - Blackgate was the Major creditor of BNP which is the company in Chapter 11 Bankruptcy at Padre Island. - BNP was started by Barbra 'N' Paul (BNP) Black. Blackgate has relationships to Paul Black. - On 26/5/10 a new board came to AKW (old members all left). One of the new board members is Paul Blackman (aka Paul Black??) - MDA board is also pretty much all new as the tack Padre Island - Doug Jendry was at MDA, now at AKW - Tony Izelaar was at AKW now at MDA - Offices of AKW used to be used by MDA - No directors of MDA or AKW have significant skin in the game. - Share price of both companies has been heading south rapidly. Will the phoenix rise from the ashes?
As far as GGP goes, my conclusions are: - if I want GGP shares I'll get them on market, thanks! - I highly suspect these GGP shares will be dumped on market so I'm not buying now - the New Caledonian assets are being dumped by the new board to free up cash to do whatever they need to do with Padre Island. I hope they are worth the $8M SG intends on paying..... - The New Caledonian assets seem expensive to me - look at AOK for a company doing well enhancements and in fills. They seem to get the leases for much less. The strategy (low risk cashflow base) is sound. I just question the price.
Dis: No sentiment. Too many questions
GGP Price at posting:
2.6¢ Sentiment: None Disclosure: Not Held