Mercantile Ports & Logis... Share Discussion Threads

[waterloo01] 24/5/2017 18:24

Guernsey, that was always the story/potential which the next owner might partly realise (although I'm less than convinced that this is even in the right location re channel depths, lack of very basic local roads and the fact that the lease is 30 years (and running down fast).

No/little feedback from Mello, silence from the company and the regulators nowhere to be seen (a bit like the money).

[guernseymoney] 24/5/2017 17:10

Good article in today's FT re Indian ports - "private sector joins state drive to upgrade docks struggling with booming overseas trade"

Lots of good companies named therein (incl. Essar and JNPT) - no mention of the sheer disaster case that is MPL.

[diku] 18/5/2017 09:26

Fishy port for fisherman...

[lefrene] 18/5/2017 09:19

I'm convinced the whole thing was a scam from the start, the object being to extract money plus end up with a service area to assist with building the bridge across the bay. Shareholders relieved of their money and somebody else ends up owning a bridge building service area.

[pj 1] 16/5/2017 22:55

If I had known this Co was to be discussed at Mello then I would have made the effort (at cost to myself) and have attended.

[mount teide] 16/5/2017 13:13

As mentioned in earlier posts, we are still to receive a reply to correspondence requesting technical information from both ITD(as a shareholder) and the MMB.

It would seem that Indian companies and Government regulatory authorities are either very, very slow at responding or are a very 'close knit' family.

Likewise, we have emailed SPL/MPL/Jay/Pavan previously requesting clarification on a number of matters, many previously mentioned in RNS statements, with a similar result, forcing us to go through the highly defensive NOMAD representative to secure access to the information.



A few examples of the obfuscation used by MPL management to render any attempt to monitor on-site construction progress totally impossible. Incredibly, we have seen more site update photographs provided by Google Earth since June 2016, than the SINGLE one made available by MPL during the last 11 months - from a management who stated that now the build out was progressing with a fully mobilised workforce, they will keep the market regularly updated. Well, the cynic might suggest they did in a way with 8 photographic site updates in 6 months before the surprise notification of a £37m cash raise for a company that the Board stated 'was not cash strapped'.


RNS - 16th June 2016 - 58 Piles have been laid for the construction of the jetty
RNS - 22nd Sept 2016 - Piling for 100 meters of jetty completed
RNS - 13th Mar 2017 - Piling for approx 40% of final quay length completed

I defy anyone regardless of technical knowledge and experience to determine what the actual progress has been from that information; designed clearly make any attempt to hold management accountable for the abject failure to get remotely near the hugely misleading progress targets that went in the Shareholders Circular date 31 October 2016 and, the passage of time has shown to be a complete work of fiction - most notably that the land reclamation and quay piling had continued without material interruption since October 2015, and the land reclamation and quay piling construction progress targets post June 2016 were many multiples of anything previously achieved.

Likewise, an attempt to conceal that just 4 acres of land reclamation had occurred against a Shareholders Circular to raise £37m that stated an expected target of 105 additional acres, can be seen in the few RNS statements updating the market as to the progress achieved. A clear attempt to mix hectares and acres to complicate matters for those not technically inclined and NO attempt to provide an update as to the progress achieved against the expected targets given to the market in the RNS statements.

RNS - 16th June 2016 - 30 hectares to be completed by the end June
RNS - 22nd Sept 2016 - 30 hectares of reclamation now complete
RNS - 13th Mar 2016 - 79 acres(40%) of overall reclamation target achieved.

MPL management should stop issuing construction progress targets since they serve no purpose other than to routinely publicise their total incompetence and ineffectiveness and, reduce their shareholders to nothing more than a laughing stock. As always, the market has 20 - 20 vision and has no trouble seeing the management for what they are: reducing the share-price from 250p to a staggering 7.65p for what is the build out of a largely fixed price real estate construction project.

AIOHO/DYOR

[waterloo01] 16/5/2017 12:45

How did the Mello meet go? Usually a fairly cynical crowd.

[mount teide] 16/5/2017 00:51

When considering the commercial potential for the revised design specification of the terminal under construction at Karanja and its projected final cost, it is worth considering these statistics;

The interest on the bank debt is currently running at £6.4m a year. And current Board salaries and expenses are running at circa £0.75m.

During the 9.5 months from mid June 2016 to March 2017, MPL's management delivered 4 additional acres of land reclamation against a target of 105 acres, and about 30 to 40m of additional jetty piling against a target of 4 berths complete, three ready to commence operations. (that debacle alone would have cost the jobs of the management responsible in any reputable port industry company).

Incredibly, the bank debt interest and board remuneration and expense costs were probably at least double the asset value added to the port terminal for the work carried out during that 9.5month period. The next cash burn update revealing the total amount of shareholders funds shamelessly paid out to achieve so little will make hugely sobering reading for shareholders.


A good illustration of the astonishing commercial ignorance and blasé behaviour of MPL management with respect to the control and expenditure of shareholders funds is this fact:

£6.3m - MPL bank debt interest payments per year
£3.0m - 2015 annual profit of Dover, Europe's busiest short sea ferry port
£5.0m - Average annual profit of all the Terminals within the Port of Tilbury run by the Port Owner (85% of the Port's total profit is made as a landlord renting out most of the berths to shipping companies to do their own cargo handling/storage).

If you bear in mind that UK port cargo handling rates are considerably higher than Indian cargo handling rates probably by a factor of as much as 150% to 300% depending on the type of cargo handled - you can see the scale of the problem.

A very expensive now scaled down terminal like Karanja, will simply never secure the volume of high paying cargo needed to remotely cover the interest on the debt. And with just 42,000 teu of containers handled in the the Old Harbour terminals last year, almost all from ships berthed in the docks, the management's ridiculous assertion they are looking to target high volumes of containers bound for the JNPT terminals is totally unrealistic, particularly since JNPT will soon see a doubling of terminal capacity to 9.0m teus.

If there was any real potential for stream transhipment containers being handled from vessels in Mumbai harbour bound for JNPT it would be happening now. The fact that the 40 Indira terminals are not currently handling containers on ships destined for the JNPT terminals speaks volumes. The reason is as previously stated - most ships visiting JNPT do not stop in the anchorage and, of those that do, few are geared with cranes enabling transhipment to even be a possibility.

Annual Container throughput volume Statistics - 2016
0.04 million containers - All 40 Indira Harbour terminals combined
4.53 million containers - JNPT

Every three days JNPT handles all 40 Indira Harbour Terminals combined annual container throughout.

Sadly, the passage of time has exposed the current executive management as being at best, totally out of their depth. We feel the investment prospects have deteriorated by such an alarming extent over the last 9 months following news of the cash raise, unacceptably slow progress and revised port specification that, there is now no chance whatsoever of shareholders seeing a return of their investment never mind a return on it; even if a new highly experienced ports sector management were to immediately take over the reigns tomorrow.

That £6.4m ticking annual debt interest clock, the current market value of the work completed to date compared to the cash burn, and the commercial prospects for the revised low cost port specification, in our opinion now make MPL totally un-investable - when the money finally runs out, and it will, we believe the market value of the assets are almost certainly going to be less than the bank debt outstanding, possibly by some margin.

AIOHO/DYOR

[kev0856153] 15/5/2017 18:56

My Retirement Fund
If you were so sure this was a scam why did you not take out a sell spreadbet with IG? These boards are full of people who are wise after the event. Most people were very suspicious and smelled a scam but the litmus test is putting money on it. If you don't put money on it you aren't sure so there is no point on broadcasting that you knew all along how this would turn out. You didn't. You just had a suspicion.

[mount teide] 15/5/2017 16:35

kramch - Wished we had known - a few of my group(who are all Master Mariners with decades of Port Industry experience, mostly at senior level) would have come along and shared our large file of photographic and written research on SPL/MPL.

Shareholders will be interested to note that the MMB, the Port Authority for Mumbai Harbour and all its connecting waterways issued a tender document recently to carry out maintenance dredging in Karanja Creek - which as a result of siltation has seen depths reduce to well below the -3.0m CD minimum depth they apparently want maintained in the main navigational channel.




This news will probably come as a surprise to many MPL shareholders, particularly those who were recently told by Pavan and Jay, that ALL Karanja Creek access channel dredging to the new port terminal is now complete to a minimum of -3.5m below CD; surprisingly reduced from -4.5m presumably due to cost constraints that even the raising of an additional £37m of funds from shareholders has failed to overcome(he says, tongue firmly in cheek!).

Perhaps, Pavan can clear up the matter as to why the MMB is tendering for maintenance dredging in Karanja creek, in order to deepen the creek to a depth 0.5m shallower than MPL claimed to have dredged it, by releasing the dredging contractors subsea pre and post dredging depth surveys reports for the Karanja Creek dredging works program shareholders have funded, and which should have have been carried out under the overall authority and control of the MMB.

Not least because this new hydrographic data should have been forwarded to the MMB, the regulatory authority with overall responsibility for the authorisation and control of dredging within Mumbai Harbour and its connecting waterways, in order to carry out its various statutory responsibilities in this connection. Among which is the legal responsibility to provide the survey data to the wider international maritime authorities responsible for the update of Marine Hydrographic charts used for the safety of navigation, so immediate chart corrections and updates can be notified in the usual timely manner to mariners, ship owners and managers, pilotage authorities and all others that may require them.

As to date, rather worryingly, we can find NO evidence of any amended/corrected channel depths appearing on the latest hydrographic chart updates for Mumbai Harbour/Karanja Creek for the dredging work claimed to have been carried out during the last two years by MPL via its contractors in the main navigational access channel of Karanja Creek from Mumbai Harbour to Karanja Port.

Ps Surely, not even MPL's breathtakingly incompetent management would have assumed in their revised cost cutting specification for the Port, that there was a minimum depth of -3.5m below CD through natural scouring from tidal movement in the 3 mile long Karanja Creek navigational channel from Mumbai Harbour and, that by reducing the Port's minimum access channel depth from -4,5m below CD to -3.5m, they could massively reduce their budgeted dredging costs by only having to dredge in the general area off the jetty out to the access channel running east/west. Clearly, as identified by the MMB, if there is a situation that the naturally scoured depth in and close to the main Karanja access channel could be less than even -3.0m below CD in some areas, it has of course huge potential negative implications for the port, since no Master of any commercial vessel would attempt to make a transit up the access channel to Karanja guided other than by the depths shown on the latest Navigational charts, which are currently showing NO verifiable general or even specific dredged depth changes in Karanja Creek as far as we are able to determine.

Additionally, it raises the entirely legitimate question - why are the MMB at their own cost funding a four month maintenance dredging program in Karanja creek to deepen the channel to a depth less than MPL's management claims the access channel has now been dredged to. As with so many other MPL matters - it simply makes no sense!

AIOHO/DYOR

[kramch] 15/5/2017 13:45

I am doing a short presentation tonight at Mello Beckenham, hopefully with some photos of my recent site visit.
K.

[waterloo01] 15/5/2017 11:27

So who's doing the Mello talk tonight? I suspect we could all do it and tell the sorry tale, but some might be more entertaining than others (not that fraud is entertaining!)

[lefrene] 14/5/2017 16:51

Mount Teide, good luck with that email to Harry Markopolos, I suspect his fee's would be larger that any small change now left in MPL. My guess is that friends in the bank that provided the expensive loan, will see to it that once the bank takes possession of the site, that Mr Gandhi (or associates) will be offered to purchase the site for a sum equal to the outstanding loan plus costs (ahem). Somehow I would further speculate that the missing millions get used for the purchase. Perhaps a book along the lines of :- 'Mr Modi's New India, it's business as usual'. Make a lousy book, but the film rights could be lucrative. :¬)

[marvelman] 12/5/2017 08:38

Great post MT. A real eye opener reading your work and greatly appreciated for investors and any thinking of investing here or for that matter any Indian centric company.

[pj 1] 11/5/2017 20:40

If it looks like a Fraud, sounds like a Fraud, then it is..........?

[mount teide] 11/5/2017 18:21

lefrene -

I've emailed independent forensic accounting and financial fraud investigator Harry Markopolos - to ask for his hourly rates! Sent over a copy of the SPL/MPL post IPO share-price chart, various other data, and news of the recent fundraise for £37m at a staggering 96% discount to the IPO price, in order to complete what is in effect a real estate development!

According to Harry's boss at the time, Harry took one look at the performance chart of Madoff's fund and said "its a fraud". Within four hours using complex mathematical models to recreate Madoff's performance, he could prove it was a 'fraud'

Somehow, like us i don't think he'll need to use too many complex mathematical models to work out there could be a problem here with the cash burn rate versus progress made.

[lefrene] 11/5/2017 16:21

Is Mr Ghandhi's 'get out of jail free card', gpoing to be that of pleading ignorance and relying on the accountants? Quite plainly tens of millions of £'s have gone awol, the board need to be removed and the money trail uncovered. Surely there are people in India who would love to unearth the dodgy dealings of Mr Ghandhi and friends?

[pj 1] 11/5/2017 16:16

We can try and beat them to it if anyone is interested. There is a cost off course (at no profit to myself)