Hi siu loong bao, The number of shares traded today at 1.2 cents is hardly a vote of confidence in the new arrangement. (Approx.$14,600) ! On the basis of the information provided it is very difficult for shareholders to assess the economic benefits for PBD in this deal. We dont know what percentage of the deal is acquired through the issue of $7.5 M of 1 cent shares and the re- allocation of $1.5m of existing working capital. (Is the joint venture a 50% arrangement? That is what proportion of the project does $8.9m buy?) We don't know what existing debts have alredy been incurred by the project,and whether PBD is picking up a portion of that debt(sharing the pain)! On brief reading of the announcement I also couldn't find the anticipated final costs (That is what proportion of the anticipated $30 m from sales will be net profit and how much of that will go to PBD). PBD only had about $8M operating costs for the 12 months commencing Jan 2013 and they were paying high interest on their $35M debt, which included this working capital. To use working capital for new investment ,rather than retiring debt, even if there was some excess,in my opinion represents high risk. None of this contributes to raising significant funds to develop Point Grey or to retire debt assosciated with Oceanique. Could the partners be looking to get some benefit from PBD's tax credits? Finally if the partner is so "professional" and "sophisticated", then why not name them in order that shareholders can conduct their own due diligence before making furher investment decisions. Previuos joint ventures have named the potential future partners 'up front' eg. FKP. Without further information ,I don't see this development either tackling the big issues facing PBD,or generating sufficient profit to reduce debt or bring foward development od Point Grey.
PBD Price at posting:
1.0¢ Sentiment: None Disclosure: Not Held
