Lonmin Share Discussion Threads

[elvisrocks] 18/11/2015 13:35

Try again Graham. The UK Takeover Panel have a market surveillance unit, check their website out or is that another institution who you think are idiots?

The letter has probably gone out now to PIC asking for clarification of their intentions. Depends whether they can get the other 25% though doesn't it!

[ravenna23] 18/11/2015 13:34

Elvis, PIC will take up to 29.9%, they do not want to be forced into a mandatory offer. This means that Lonmin is effectively nationalised. The underwriters will use their trading arms to pump and dump post RI. If the platinum price does not increase by 30% in the next year then Lonmin will bleed to death. The SA government may well support all of the Platinum miners, just like the UK did with the banks in 2008. There was no change in bankers attitude that they deserve enormous salaries. There will be no change in miners demands. The SA government have to accept that a major platinum miner will go bust, they will not as too many jobs are at risk. So it is up o the SA tax payer to support the Platinum industry. That is not a realistic medium to long term proposition. The current political impasse means that non SA investors will avoid. The future is far from rosy.

[graham2405] 18/11/2015 13:31

PIC are the "ONLY INSTITUTION THAT HAVE STATED SUPPORT FOR THIS".

Name just one other, just one?

[graham2405] 18/11/2015 13:28

Elvis

PIC don't want to put any more money into Lonmin. They made this clear in August, they also sold a significant amount of shares.

So, they are underwriting 25% of it. Christ, do you really think that they want to do this if they didn't have to.

READ BETWEEN THE LINES.

Why are PIC underwriting?

Perhaps the banks were only prepared to underwrite 75% of the offer. Have you considered that?

They perhaps have no choice but to support the RI and underwrite, if they want to save Lonmin and therefore the jobs.

GIVE ME STRENGTH.........

[elvisrocks] 18/11/2015 13:23

Try again Graham, PIC have said they "want" 32% and sub-underwritten for that.

They made a Public Statement to that effect, the UK Takeover Authorities cannot ignore that. So even if it is about jobs, they are going offload it to someone, who, in all probability is already also aligned with them.

Wake up Graham, the world isn't the wild west you like to assume it is always is.

[graham2405] 18/11/2015 13:18

"If PIC have sub-underwrote another material portion, who gets first cut of the rights not taken up? Them or the other underwriters (JPM, HSBC and Standard Bank)?"

It's not a case of wanting them, it's a case of being dumped with them.

Do some research on underwriting.

The underwriters are only there as insurance, no more no less. Hence they charge a premium, which is dependent on the risks. Quite a large one for Lonmin.

They do not want to buy shares, they just want to bank the premium.

PIC, I assume are also getting a cut of the premium, one would assume, else they are 'a bit thick'.

Don't forget PIC have other motives.......

It's all about the jobs. ;-)

[elvisrocks] 18/11/2015 13:13

Question for Graham or others.

If PIC have sub-underwrote another material portion, who gets first cut of the rights not taken up? Them or the other underwriters (JPM, HSBC and Standard Bank)?

I would have thought PIC as there are saying we'll have them, saves JPM etc. having to find a buyer.

[elvisrocks] 18/11/2015 13:09

Try again Graham, give it to the traders, they have done fantastic with their shorting (something you know I know very little about).

As for the institutions and investment banks, the market forced a 46:1 on them, the market has responded but now, the consensus view, is that only strong capital is in. Big shareholder also thought this though earlier in 2015.

As for thinking outside the box, no-one ever thought bar me and Kojak that a black entrepreneur could be swirling, scroll back a month you'll find the posts.

So investment banks, got to love them. They've been working on Deal 2 in parallel. Worth every penny. PIC even put the icing on the cake with their Public Statement when they said they "want" up-to 32%. Wonder what the UK Takeover Panel thought of that? Hmm let me think?

[graham2405] 18/11/2015 13:01

Elvis

Agrees there was the risk of a rights issue, BUT those invested at the time did nor foresee a drop to 10p and a rights issue @ 46-1 @ 1p.

So, give it up with the institutions, they have screwed up royally.

[elvisrocks] 18/11/2015 12:50

Time for a quick reminder from that July 2015 article you tried to say to me "have you not read this". Post 5868. You supplied the rope Graham, again!

The possibility of a share sale shouldn’t be a surprise to the market, Neill Young, a money manager at Coronation Asset Management (Pty) Ltd., Lonmin’s fifth-largest shareholder, according to data compiled by Bloomberg.

“It was always quite a real risk — they’ve got some debt that is maturing,” Young said by phone from Cape Town. “There is going to be some overhang on the share” until Lonmin announces how it will refinance the debt, he said.

[brahmsnliszt] 18/11/2015 12:34

hi careful - yes i tend to agree with your view there regarding people who have sold have probably done so by now.
still, graham puts very good arguments for lower however, so a bit of a knife egde really.

[elvisrocks] 18/11/2015 12:33

Nope Graham, as you know my cost of investment is just under 25p, and Macquarie are leading on 0.40p per value of right.

You know exit strategy or part exit strategy. I'm still not convinced I made a mistake last week not selling on the 9th, up 10% in the morning then big fall. This share is at the mercy of day traders at the moment, no clear indication of value. Magara goes for $1.6bn with the kitchen sink thrown at it.

Downside risk looks covered now, which I think is consensus comment. Just being honest, I do listen but there are plenty others in here at well over £1.

[careful] 18/11/2015 12:29

our moods ebb and flow on this one, one day we feel it is a long term punt,
the next we think of dumping the lot.

[elvisrocks] 18/11/2015 12:29

Thanks Graham, that post about covers it 1-1.2p does seem to be the TERP.

As for trading position Friday onwards, who knows is anybody's guess and I think your's too. I've tried to go with Magara. At the moment in the last days of old Lonmin, market cap is "nominal" at $100m in Magara's book, then comes the RI.

But in case you had not looked at the balance shhet, every asset has been written off or written down heavily, including Marikana by 50%, hence the $1.6bn "value". I've also tried to explain how plat plat price rolls into EBITDA and the rest of the P&L falls away, and also how the cash flow works, but that seems lost on this Board.

Finally, I listen to public statements of PIC. They don't make statements like that for the hell of it.

[careful] 18/11/2015 12:27

i would have thought those choosing to sell to avoid paying out more cash for rights will have sold by now.

waiting for the vote is desperate last minute panic.
the vote is a formality.

[graham2405] 18/11/2015 12:27

"Might actually sell them all if the price is good"

Thought this was an excellent long term investment? ;-)

[graham2405] 18/11/2015 12:20

"It's a large proportion Yes Graham, about 8% of my portfolio.
I'm roughly just over 50% down on my investment on today's price, bit more."

Sorry to hear that, and I don't expect it will get better any time soon.

As regards the 8%, i'll take that with a pinch of salt, given your attitude and postings on here.

"Plan on using a combination of cash and tail swallowing, depending on what unfolds in days ahead. Might actually sell them all if the price is good."

A few thoughts......regards selling or tail swallowing.

They go ex-rights on Friday, they will then be trading @ circa 1-1.2p IMHO

Are you planning on selling rights, to buy rights. Because I don't see that being a good option. Or are you going to sell today/tomorrow to raise cash to take up rights with those that are left.

You really need to give this plenty of consideration.

Because the vote tomorrow, and others selling to take up rights could cause a massive move in the price pre the ex-rights.

Of course if the vote fails it's not an issue, but there will be others.

Exciting times for holders, and not without significant risks.

Best of luck

[careful] 18/11/2015 12:17

well best of luck anyway.
sometimes these risky positions can pay off.
this one is as convoluted as i can remember.
so many permutations.

[elvisrocks] 18/11/2015 12:14

Not quite careful, but in the low teens.

EDIT

That's why I believe careful, done my research.

Bit like house builders this one, remember Taylor Wimpey just after its restructure in 2009 and price now, government would never left (all) house builders go out of business.

Same here with Lonmin.

[careful] 18/11/2015 12:12

i presume it was about 16% of your portfolio at its peak.
that is a big position.
(depends upon the size of your portfolio.)

if you mean 8% at todays price pre rights elvis, the if you take up your rights it will dominate your investments.

[elvisrocks] 18/11/2015 12:08

It's a large proportion Yes Graham, about 8% of my portfolio.
I'm roughly just over 50% down on my investment on today's price, bit more.

Plan on using a combination of cash and tail swallowing, depending on what unfolds in days ahead. Might actually sell them all if the price is good.

[graham2405] 18/11/2015 12:05

"Elvis you are so nervous because you are invested heavily in Lonmin and its painful for you to see your investment being halfed? Poor thing."

Nail on head......

Elvis, how many shares do you have?

What proportion is it of your 'well diversified' portfolio?

Do you intend to take your rights up in full?

Or are you selling some to take up rights?

Just interested......... ;-)