longwall install, page-23

Does anyone have a full copy of the UBS research and has there been any updates?

Anyone know what the contractors settled for? Bonus to hold off action against company?

Why Sept until longwall capacity- was that approvals or another issue liek gas or dewatering, capacity at port?

http://www.illawarramercury.com.au/news/local/news/general/gujarat-nre-denies-financial-trouble/2450868.aspx?storypage=0


Gujarat NRE denies financial trouble
BY BEVAN SHIELDS
10 Feb, 2012 01:00 AM
Mining magnate Arun Jagatramka has denied his Illawarra empire is under threat despite a plummeting share price, profit downgrades and project delays.
The Gujarat NRE Coking Coal executive chairman yesterday sought to quell growing speculation the jobs of up to 600 employees were at risk at mines in Russell Vale and Wongawilli.

"As common to all businesses, financial pressures do arise from time to time," Mr Jagatramka said.

"Any temporary mismatch is not of a severe nature to deter us from fulfilling our commitments."

However, shareholders and analysts have expressed concerns about the firm and the Mercury understands some contractors are owed significant sums of money.

In the space of a year, the company's share price has fallen from more than 80 cents to a record low this week of 17.5 cents.

Asked why contractors had not been paid on time, Mr Jagatramka responded: "All payments and terms are being addressed with our contractors and suppliers. All payments to our suppliers and contractors are being taken care of in discussion with them."

The company has also encountered delays in realising its plans to undertake longwall mining at the NRE No 1 Colliery in Russell Vale, where it installed $90 million worth of equipment last year, partly funded through a $100 million loan.

Gujarat NRE lodged environmental assessment documents for a huge expansion project with NSW Planning and Infrastructure in February last year in the hope it would be approved by December or January.

A decision is still months away.

The project delay is one of the reasons investment firm UBS has forecast the company's net profit after tax will fall from $30 million to $17 million this financial year and from $45 million to $10 million in 2012-13.

UBS has also estimated its coal production will be down from 1.7 million tonnes to 1.3 million tonnes this financial year.

Gujarat NRE had been hoping to extract 2.5 million tonnes.

UBS analyst Daniel Morgan said longwall production might not be fully operational until September.

"The planning approvals process has slowed considerably post-election and it has taken a lot longer for them to come through," he said.

"As a result, the large-scale ramp-up in production has been delayed."

He said the company had a debt of about $265 million as at September last year, while the total value of all shares is about $180 million.

UBS forecasts net debt to hit $450 million by March 2013 - $100 million more than originally thought - indicating Gujarat NRE will need more funding.

"All this has unsettled some people [because] if you've got operating cash flow not as high as it would be because the longwall is delayed, then the ability for the company to come back and earn the cash to repay debt is much harder," Mr Morgan said.

UBS was not advising investment in the company, he added.

"There's risks there that investors don't need to take on. There are other companies that don't have that risk."

Investors have also taken to online discussion forums to express concerns about the share price, delays to the longwall development and the potential for a takeover.

Mr Jagatramka said the share price was a "direct fallout of the market conditions".

"Our fundamentals are strong and hence we are unperturbed by such fluctuations," he said.

"We believe we are in the right business at the right time [and] the day-to-day operations of the company are in no way dependent on the stock price and as such any such apprehension is misconceived."

He said there had been no reduction in the permanent workforce and an additional 80 staff had been hired over the past six months.

Delayed shipments at the Port Kembla Coal Terminal in the past few months have added to financial pressures on the company, Mr Jagatramka said.

"Gujarat NRE values the opinions and concerns of the community and we are proud of the community's confidence in us," he said.

"We would like to assure the community that work at Gujarat NRE is normal and regular and that there is no reason to be concerned."