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PV Crystalox Share Discussion Threads
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|Cancellation of which they've rather cleverly got us, the shareholders, to pay for..|
|I think management have thrown in the towel, hence the cancellation of the final supply agreement? Maybe they will be tempted to mbo?|
|Perhaps it's worth mentioning that in the last month wafer prices have bounced back quite sharply and in the last couple of weeks polysilicon prices have shown a modest rise too. This comes after months of a downwards trend, of course.
The worst knock-on effect of this rise would be if it tempted management to consider soldiering on. The best would be if some other producer began to covet PVCS's production assets (as per my previous remarks on totally depreciated PPE.)|
|Indeed. And the evidentiary hearing is next month isn't it?|
|IIRC the previous contract default payments were in $ and EU. I'm assuming this one will be as well, and if so, the sterling value will be higher than has perhaps been assumed.
Not a huge difference since we don't know how big the award will be, but at least the currency difference will be in our favour.
Big spread again today...|
|Indeed. I have to fess up to trimming my holding back over the last few weeks, but only because I piled in a few months back... Still have a decent chunk which I will leave until it's wound up.|
|Hi Boystown and Eezymunny.
Let's take Eezy Money's 19p per share conservative net tangible asset value calculation and add three times the August 24th 12p share Price for the potential settlement. This comes to 55p per share.
In my view, it's an obvious hold.|
|Makes sense, free money on the table here
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|Keep digging fly! I'm always happy to change my view on risk/reward if you find some significant lurking liabilities. I'm sure there are some, just can't see anything significant at current time - but much is unknown to us.|
|Eezy, extrader, Thanks for the replies.|
|I'd normally be very sceptical about the arb possibilities but other PVCS customers have shelled out tens of £m's to buy themselves out of these long term contracts. As you say without sight of the contract we can only guess at the outcome.|
|Some errors there boystown.
In curr assets prepaid polysilicon deposits were (from memory) E2.7m and in lt assets there are E5.6m poly deposits. Much of those deposits are being forfeited in order to get out of supply contracts.
"The Group will forfeit a significant portion of the pre-payment outstanding at 31 December 2015 and will receive the remainder in cash"
So b/s takes a hit (E8.3m less what they keep - we don't know how much). In addition I suspect inventories (p/s + wafers) have taken a hit since the b/s date (20%?) - another E2.5m hit.
My best guess b/s is c. E10m worse than b/s date, so tbv now roughly E35m or £30.5m, which is c. 19p/share.
As I say I suspect if no arb award you can lose a little here (10-20%) and gamblers have to decided if upside (100%, 200%?) makes that risk worthwhile.
We can only guess at a lot of the numbers and likelihood of arb award, so significantly gambly here, worst case may be much worse than my guesses. Personally I like the risk/reward.|
|Or from the horse's mouth
Jul 18, 2013 - German Silicon Products Research Engineering Production GmbH said on Wednesday it had purchased the polysilicon production plant in Bitterfeld, central Germany, of UK multicrystalline silicon wafer maker PV Crystalox Solar Plc (LON:PVCS).
The move was completed as part of a management buy-out and a private investment.
SPG took over the facility and a part of the staff, the company said.
According to an announcement of PV Crystalox Solar from the beginning of July, SPG will also cover related liabilities, including EUR 18.4 million (USD 24.1m) in obligations connected with grants and subsidies.
The Bitterfeld facility was constructed in 2009 with an investment of EUR 120 million.
(EUR 1.0 = USD 1.311)
|The value of a tribunal award (and payment!) would add to the current book value, so if the award was 33p/share for example (a 3 x multiple of 11p), book value would be in the region of 50-60p (my guess - we don't know exactly how much of a hit is being taken on the polysilicon deposits, nor ongoing losses etc).
So there's plenty to play for (for gamblers) and perhaps a little downside from here in the event of no arbitration award (or payment).
|From the prospectus.
The Group is proposing to build its own polysilicon production facility in Germany, the facility will be built at the Bitterfeld Chemiepark, Germany.
The Directors believe that construction of the facility will require fixed capital investment of approximately E80 million. Subject to fulfilling certain conditions, the Group is eligible for government grants of E20 million, to be used for the construction of the facility.
In the event of business closure, what level of this grant would be repayable?|
|Hmm. 24p works then?|
|@zcaprd7 they repeated the statement at end of august when the price was 11p|
|17th March, share price was about 8-9p a share:The judgment of the arbitral tribunal is expected later in the year and while the outcome is uncertain, the value of any award if our claim is upheld could be a multiple of the Group's market capitalisation.So, could be 16-18p? What's a multiple, X2, X3?|
|Hang on. The multiple of market cap comment was made a while back. So I think that's about 10-15p a share. We are priced at inventory and cash. We have settlement, plus whatever the business is worth?|
|It's just impossible to say IMO - all hinges on the hearing obviously. Overall, though, the weight of possibilities / risk-reward ratio still has to be favourable and it remains a far more interesting speculation than most stocks of a similar mkt cap.|
|Well, by my reckoning, they are now fully valued.
Clearly there is the potential of the huge settlement which I am guessing would still lead to a doubling of the share price from current levels.
I continue to hold but am having a problem in terms of deciding whether to buy more or not.|