MSV

1.33%

38.0¢ mitchell services limited

Appreciate your thoughts. Can you provide a bit more background...

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AxeHimmans

170 Posts.

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02/03/21

13:25

Post #: 51451318
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Originally posted by bererkwarrior: ↑

Thanks for the clarification to both you and AxelHimmans.

How could Tumbridge not be pissed with the state of the SMS contract and the debt owed?

I'm not making a judgement call as to conflicts of interest at this time simply because I don't know the facts of what transpired.

My take...while NM certainly has an interest in both business entities, I don't know if a conflict of interest existed.....I don't know if those interests were managed at "arms length" (MSV state however that is the case) by management at MSV or whether NM retained oversight. If the contract was truly managed at arms length on commercial terms, a conflict of interest doesn't exit. It's easy to make the assertion that a conflict exists considering the state of the contract in question ...but can you back it up at this time with proof? It's hearsay at this time. I can't because I'm in the dark about important facts to make that call; the most important being why the payment schedule was allowed to blow out? I can think of many possibilities but the reality is I just don't know. I don't have an answer to that and it's crucial to reconciling what happened. MSV contend that all related party transactions have been at arms length & that previous related party matters have been commercially in MSV's favour. More will come to light thru' the court hearings.

Prima facie, MSV state there's been a contractual breach between MSV & SMS. NM states he's no longer chair of Adaman, the limited things said By Mark Rowsthorn refer to a "commercial dispute". While they are bound by their shareholding in Adaman, MSV are pursuing SMS. Resigning as Chair at Adaman seems like the right thing to do. The court action seems the right thing to do. Historically, with hindsight I'd suggest things should have been done differently. Now in the present, I'm comfortable with the actions to correct a mistake.

For mine, this isn't the big picture here. It's a sideshow, albeit a sizeable one. The underlying business is the big picture and that's my primary concern. That's doing well and I'm confident (macro issues/market turns not withstanding) as I can be that this is going to be a rewarding investment. I've been a long term investor alongside the Mitchell's in drilling before. That was through a few cycles & the ups & downs that entails but I exited that with them through a takeover at cyclical highs. They know the industry, look at their timing again on coming back in, a cycle low....buying liquidated assets at cents in the dollar. Reputation alone gave them an opening, they've done everything they've aimed/said they'd do with positioning within the industry....a few bolt on's that have provided raw value and importantly industry diversification. The backdrop is supportive. The investment case for mine is excellent. The bad debt is a bummer, I don't like it but for me it's "noise" and the share price as it stands has afforded me an opportunity post Covid to revisit what is a long term cyclical buy at arguably cyclical low prices. Conflict of interest? Yes, no...I don't know. My focus is and always will be the business and it's performance is reflected in the numbers. Those I do know and for me that's what matters.

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Appreciate your thoughts. Can you provide a bit more background as to your previous investing experience with the Mitchell's in the drilling space? If they've done it once before and looked after minority shareholders in the process, then it certainly helps to bolster confidence this time around imo.

MSV Price at posting: 40.5¢ Sentiment: None Disclosure: Held
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Appreciate your thoughts. Can you provide a bit more background...

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Appreciate your thoughts. Can you provide a bit more background...

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NRW Holdings inks $109M deal with BHP for works at Jimblebar

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