auzbiz.com.au The Call segment midday 19.5.25 G. Sodhi (Chief Analyst "The Intelligent Investor") & M. Somasundaran CEO Deep Data Analytics
Sodhi said he bought CRN a short time ago a 20c- & still rates it as a "Speculative Buy". Somasundaram said CRN is now too risky, & would not recommend it.
(I intend to buy CRN, but only when/if It is reasonably clear they can survive until early 2027, relatively unscathed ie debt funding- up to c. 12% pa- is OK; but not, obviously going into Administration; & not likely to be forced to do a large CR/forced Equity allocation, causing massive dilution).
Sodhi said, paraphrasing
. CRN probably has the worst management of any commodity co. in the world
. CRN should have stopped paying dividends, as they should have foreseen
a. the solvency problems they would face with declining coal prices. b. also, the savage met coal export rebate royalties they had to pay Stanwell , finishing in early 2027, that cost CRN c.US $120m pa (I thought this figure was c. US $88m pa) c. the loss-making thermal coal supplies to Stanwell
. the hedge fund today (I assume referring to Czech Se.ven) is buying all CRN's debt- & this could force CRN into ADMINISTRATION (disaster)
. if CRN survives after 2027, its profit then will be about its current market capitalisation
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(20min delay)