Ann: Company Update, page-194

I fully agree. Perhaps a bit of perspective; call it a look at the forest rather than looking at each tree.
The coking coal industry was only just coming out of the biggest slump since the GFC, China had overproduced steel and had been dumping into the world market – coking coal was correspondingly in the toilet. Bathurst had to shelve the plans for Denniston and were – to put it bluntly, a penny dreadful share. They wanted to buy the assets of a company that had essentially gone bust. Now, if anyone approaches their bank requesting a credit line under those circumstances – the bank will look at the market cap and demand an assurance of more equity – hence (I suspect) the rights issue. (seen this before – do you remember Nuplex?). Now, remember that this happening last year and the only reason why coking coal was recovering at the time was for internal political reasons inside China and the politburo can just as randomly re-set any policy it likes back to what it was. Given all those circumstances, it is very apparent the they were betting the farm as mineral commodity price recovery was still patchy at best, plus - they were doing financial gymnastics to stitch the deal together. It may seem obvious to everyone now that it’s a brilliant deal – but to quote a person more intelligent than me ‘You can’t remember the future’.
So, fast forward to last night’s closing price - if I were following my own rules, I should be switching windows on my lap top and putting in a sell order now (‘always leave something for the next bloke’). But I won’t because this is the ‘fun’ part of my portfolio. A more sensible person than me would not have spent so much time and research effort on it. That is my big picture view of it.
That means I’m not trying to peer into the Directors thoughts and motives – I care not and really shouldn’t care. And if it all goes really sour (and it still could) then it is simply ‘Je ne regret rien’. It was a hell of a ride and it was gangs of fun.