Mercantile Ports & Logis... Share Discussion Threads

[mount teide] 26/6/2017 23:48

India - Business Anti Corruption - GAN

'Companies operating or planning to invest in India face high corruption risks. Private sector corruption is addressed by the Companies Act..... but due to low levels of enforcement and monitoring, integrity in all state bodies is lacking, and corrupt practices such as facilitation payments and bribes persist.'

Indian Insider Dealing Regulations(SEBI) - Penalties - Any person contravening or attempting to contravene or abetting the contravention of the Act is liable to imprisonment for a term which may extend to ten years or to a fine which may extend to INR 250,000,000, or both.

Yet, remarkably, as MPL shareholders well know, many Insider Dealing Charges get dealt with by SEBI Officials, by way of out of court settlements - which generally are only a tiny fraction of the maximum figure in the Act and, of which few details are made public.


Study Finds India Is Asia's Most Corrupt Country, While Japan Comes In Last - Forbes

'A recent survey by Transparency International (TI), an anti-corruption global civil society organization, states that India has the highest bribery rate among the 16 Asia Pacific countries surveyed. Nearly seven in 10 people who accessed public services in India had paid a bribe. In contrast, Japan has the lowest bribery rate, with 0.2% respondents paying a bribe.'




Corruption in both the Public and Private sector in India is endemic and unlikely to improve anytime soon. Investors should ignore it at their peril.


Not having the input of Royal Haskoning, the highly reputable European Headquartered, Marine Structure Design Engineers, during the build out phase was a big loss to shareholders and a major red flag. As with the three NEDS and a Financial Controller based 4,000 miles away in the UK, it left shareholders with little effective oversight, over the Indian Executive Management and Indian Major Contractor.


AIOHO/DYOR

[orinocor] 26/6/2017 22:39

Shareprophets.com are doing their bit. They put online more of MT's content yesterday.

hxxp://www.shareprophets.com/views/29932/for-the-record-no-3-nomad-cenkos-yet-again-put-on-record-about-rns-lies-by-client-mercantile-ports-logistics

[escapetohome] 26/6/2017 22:24

Any indian companies making money for plonker aim investors?

Spl, iip, koovs, ?

Can english companies please please list on the indian market and dip some sherbert?

[diku] 26/6/2017 21:53

Why oh why they listed on the AIM & no other index in the World?...is AIM the easiest to mug punters?...I guess it is all in the name: AIM = Am I Mug?...

[mount teide] 26/6/2017 21:18

someuwin - thanks, completely forgot about Gandhi's 30m further diluting everybody.

As you say, holding 60m they and the other II's are surely now locked in - their fate sealed.

[someuwin] 26/6/2017 21:03

...I don't think M&G have reduced at all, they still hold 60,634,550 shares.

Their percentage has dropped due to the 30 million new shares recently issued to Ghandi.

I guess the instis are locked in to the death here.

[mount teide] 26/6/2017 20:42

Looks like M&G reduced on Friday - remarkable that the share-price fell 98% from IPO and 55% from the recent placing, before it dawned on them that MPL may not be similar to 99% of the Ports Sector - i.e. safe, well managed, dividend paying, low-risk infrastructure asset investments.

If they had stuck their money in low risk Dubai Ports World (DPW) in 2010, instead of being 98% down here, they would have received nearly 30% of their original investment back in dividends and seen their capital appreciate 225%.

No investment advice intended or offered.

AIOHO/DYOR


Seems MPL's II's not only failed to carry out any Due Diligence worthy of the name - but also failed to heed any of Warren Buffet's stock market basic warnings for beginners:


“Never invest in a business you don't understand.” particularly if you fail to carry out any quality due diligence

“In the business world, the rearview mirror is always clearer than the windshield.”
MPL's failure to hit any progress targets/timelines whatsoever should have had II's and PI's stampeding for the exit doors long ago or demanding wholesale changes to the Board - not supporting Shareholders Circulars to raise another £37m!

“It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” Just because the MPL share-price had dropped 95%, it did not necessarily make a £30m placing cheap.

"If a business does well, the stock eventually follows.” MPL never achieved a single construction target or timeline - share-price is down 98%.


"I try to buy stock in businesses that an idiot can run. Because sooner or later, one will.” Uniquely, MPL's II's invested in a business run by an entire executive management of idiots. Led by an Executive Chairman charged with securities fraud and served with writs alleging he stole tens of £millions from another company he had executive responsibility for.

“If you are in a poker game and after 20 minutes you don't know who the patsy is, then you’re the patsy." Correct - particularly, if it takes 7 years of investing in MPL and losing 98% for you to work out who the mug is!

“Beware of geeks bearing formulas.” Correct - or more precisely, beware of MPL Executives bearing IPO Documents and Shareholders Circulars!

Moral of the story - always carry out plenty of post investment due diligence - and if you realise you have made a mistake, get out sooner rather than later - as these situations rarely change and end happily!



AIOHO/DYOR

[mount teide] 26/6/2017 16:45

98.3% down post IPO!

Still not one resignation from the Board or even an apology, for having to organise an emergency placing at a 95% discount to the IPO price for the build out of a real estate asset. Breathtaking arrogance and shameless indifference to shareholders.


Shareholders Circular - 31 October 2017 - stand up material so good the board could go on tour with it!

'By the end of the second quarter of 2017 the Company expects to have:
• completed the balance of reclamation work - 200 acres
• constructed the remaining berths, four of which will be capable of receiving vessels


Reality:

A totally unacceptable 15 acres were reclaimed against a target of 125 acres (just 12%!)
No berths have been constructed - just a totally unacceptable 80 or so further metre of piling.


What should alarm shareholders is the following comment in the Prelims:

'Reclamation continues apace and circa 90 acres of land have now been reclaimed. This is sufficient reclaimed land to enable the facility to commence operations once the vital services and infrastructure have been installed.'

Reality: reclamation does not continue apace - just 15 acres in 12 months: only MPl could describe it as continuing apace, just as they shut it down for the 6 month monsoon season!

MPL will never carry out any more reclamation than they have at present - they don't have the money for it, if the totally implausible cash burn to date is a reliable guide(it has been infallible to date!).

The final £60m will be run down to enable the executive gravy train to extract every last cent out of the business, before the banks step in to call time on them.



AIOHO/DYOR

[orinocor] 25/6/2017 19:56

What do we know about ITD Cementation?

hxxp://www.itdcem.co.in/
hxxp://www.itdcem.co.in/about-us/history/

Are these guys up to their necks in th?




They made £2.8M profit in their last quarter. They are not a massive company by any means.

hxxp://www.itdcem.co.in/investors/financial/financial-results/

[mount teide] 25/6/2017 19:32

Whatever the locals were doing - in the two month period between late December 2014 and late Feb 2015, ITD managed to build a 250m trestle out across the foreshore to the intertidal zone and carry out an initial 10 acres of land reclamation - a rate of progress consistent with that ITD has achieved at JNPT throughout the last 19 months.

What is ridiculous is that on commencement of construction of the 250m trestle, the company appears to have already run up a capex/cash burn of circa £44m, according to their financial statements covering the periods up to 31 Dec 2014.

MPL/ITD have clearly only resourced the Karanja site at that level for a few very short periods of time over the last three years (most of which had an uncanny ability to coincide with company organised photoshoots).

Otherwise there has been a scandalous lack of contractor resources allocated to the construction, considering the totally implausible cash burn.

Effectively NO land reclamation will have been carried out at Karanja during the existing and previous two monsoon seasons - yet ITD have had no problem carrying out most of the 225 acres of land reclamation at JMPT in tidal water up to 21m deep, during the last two monsoon season. That alone is incredibly damning of MPL.

[diku] 25/6/2017 18:57

And picture 517 I think they having outside board meeting!!...

[diku] 25/6/2017 18:55

That picture post 515 is a good racing track!...

And that man in post 516 not wearing high viz...maybe he finished his day duty & just assessing the situation...he is probably thinking oh lord I have to do more digging tomorrow!!...

[pj 1] 25/6/2017 18:53

Definitely not workmen I'd say

[pj 1] 25/6/2017 18:49

Jan '15, landscaping/. One man a pick LOL
Note the group of people on the far side. We thought these were workman. But it seems they were protestors blocking access.

[pj 1] 25/6/2017 18:38

Taken late Nov 2014. No works at all to the Port

[mount teide] 25/6/2017 10:43

pj1 - indeed, there were a lot of conflicting reports as to activity on the ground in late 2014/early 2015. None appeared to have any negative impact to on-site construction if Google Earth Historic View is a reliable guide

Google Earth very clearly shows that construction of the approach trestle and initial land reclamation started immediately following completion of the bridge on the approach road in December 2014.

By early Jan 2015, Google Earth shows the approach trestle well under construction and by late Feb 2015 the trestle is complete together with some 4 hectares or so of land reclaimed, BEFORE protest action by a few locals(according to my notes from a telephone call with Pavan), saw the company temporary halt construction in April 2015 to deal with their dispute.

[pj 1] 25/6/2017 10:02

MT-some care maybe needed with those dates. I remember after the bridge 'appeared operational' landscaping works were completed some time after. Also. Access was restricted after the bridge appeared operational as protestors were blocking the bridge. Secondly. Attempts were made by some HGV to gain access via the karanja village along another track which I think led straight to site. Again from memory there were press reports of intimidation violence and stone throwing at these vehicles. However the on line page reporting this (translated)disappeared. Off course maybe these protests concerned the removal of the goal posts/ volleyball pitch?

[mount teide] 25/6/2017 09:35

orinocur - including professional fees for the Planning Consent, Site Surveys, Port Design and Engineering etc together with the construction work on the approach road; £5m as an absolute maximum.

[orinocor] 25/6/2017 08:50

THIS SUGGESTS AN ACTUAL CASH BURN OF £44.6M (£21.1m + £4.5m + £19M), BEFORE THE PRINCIPAL CONTRACTOR HAD EVEN GAINED ACCESS TO THE SITE TO COMMENCE CONSTRUCTION WORK ON THE FIRST ACCESS TRESTLE.



MT How much do you estimate was actually spent based on the actual work that was done? £5M or thereabouts?

[mount teide] 24/6/2017 23:51

30 June 2013 - Interim Report

'I am pleased to report that the Ground Breaking ceremony has taken place and that development work continues in line with management’s expectations. With the monsoon season drawing to a close, the project’s EPC contractor advises that activity ON THE SITE will accelerate as planned.'

Reality: THERE IS NO ON-SITE DEVELOPMENT WORK OR ACTIVITY WHATSOEVER AND, THERE WILL NOT BE ANY ON-SITE DEVELOPMENT WORK UNTIL THE SINGLE LANE DIRT TRACK ACCESS ROAD, WHICH CURRENTLY ENDS AT THE EDGE OF A TIDAL CREEK SOME 50M SHORT OF THE SITE, IS EXTENDED BY BUILDING A SMALL BRIDGE TO SPAN THE TIDAL CREEK. Source: Google Earth

Work on extending the dirt track over the creek DID NOT BEGIN UNTIL late H2/2013 - Source: Google Earth.


8 April 2014 - Closure of Debt Facility

'The SITE DEVELOPMENT WORKS at Karanja are progressing as per management's expectations and the project's EPC contractor is PLEASED with progress. The COMING MONTHS will see significant progress on the development of the APPROACH TRESTLES, REVETMENT, RECLAMATION, and PILING WORK for the jetty. Manpower ON-SITE continues to RAMP UP, with a labour force of approximately 400-500 people EXPECTED to be working onsite in the COMING MONTHS.

Reality: BREATHTAKING DISHONESTY - the small bridge to span the tidal creek is still in THE EARLY STAGES OF CONSTRUCTION and IT IS 8 MONTHS LATER IN DEC 2014, BEFORE IT IS COMPLETED AND CONTRACTORS AND HEAVY MACHINERY GAIN FIRST ACCESS TO THE SITE. 2014 SAW NO WORK WHATSOEVER CARRIED OUT ON-SITE, BECAUSE THERE WAS NO MEANS OF ROAD ACCESS! Source; Google Earth AND photographs taken from a light aircraft hired by a small group of shareholders at their own expense, to check the management's FALSE claim of the mobilisation of the contractor's workforce on-site, and progress made with the development work!


30 June 2014 - Interim Report

'Chairman's Statement - I am pleased to report that the level of activity on the ground has continued in line with management's expectations and in accordance with the plans agreed with the Company's EPC contractor. DURING THE PERIOD and SINCE THE PERIOD END, WORK HAS CONTINUED TO PROGRESS on two of the three key areas of the build out, INCLUDING LAND RECLAMATION and dredging in the approach channel.'

Reality: BREATHTAKING DISHONESTY - AS REPORTED ABOVE - THERE WAS NO MEANS OF ACCESS TO THE PORT SITE UNTIL JAN 2015, FOLLOWING COMPLETION OF THE BRIDGE OVER THE CREEK AND GENERAL REPAIRS TO THE DIRT TRACK ACCESS 'ROAD'. SO HOW COULD LAND RECLAMATION WORK HAVE PROGRESSED DURING THE PERIOD UP TO 30 JUNE 2014 AND SINCE? - A BLATANT LIE. Source: Google Earth



Cash Position Timeline: Post £73m IPO:

8 April 2014 - Closure of Debt Facility

The syndicated facility is for GBP 48 million for a term of ten years with interest payable at the base rates of the respective banks plus a range of 3 per cent to 3.55 per cent per annum, resulting in a present effective rate ranging between 13.2 per cent and 13.75 per cent per annum. The Company expects to make the initial draw down from the Debt Facility during the second quarter of this calendar year.



30 June 2014 - Interims

£45.5m Cash balanced - ZERO DEBT DRAWDOWN

Cash position reflects the progress and costs that have been incurred ON-SITE and the Company has so far incurred Capex of GBP 21.15 million by the end of the period.

Reality: THE COMPANY IS YET TO GET ONSITE! - THE ONLY COSTS INCURRED TO DATE IS THE CONSTRUCTION COST FOR THE SMALL BRIDGE UNDER CONSTRUCTION OVER THE CREEK - WHICH WE ESTIMATE AT £2M TO £3M.


Prelims - 31 Dec 2014

'The Group has conserved its resources during periods of lower than anticipated activity, with the Group’s operational spend accelerating in line with increased activity on site. The Board remains confident that the Group has adequate resources in order to complete the facility at Karanja, with cash at the end of 2014 standing at £41m.'

Reality: The year end £41m cash balance suggests a cash burn of £4.5m in H2/2014 - which seems a little high considering NO on-site activity during the entire year, other than to build a small bridge on the access road to allow heavy machinery and vehicles access into the terminal - which was completed in Dec 2014(Thanks Google Earth). THERE IS NO MENTION WHATSOEVER OF ANY DEBT DRAWDOWN IN THE REPORT.

However, buried on page 25 is this little gem:

'As at 31 December 2014, the Group’s non-derivative financial liabilities have contractual maturities (and interest payments) as summarised below:

Within 1 year - loan interest payment of £2.97m!

Now this suggests that during July and Dec 2014, MPL made a bank loan drawdown of somewhere between £15.5m and £22.5m, dependent on when between July and Dec it was drawn. LETS ASSUME IT WAS SEPT WHICH WOULD INDICATE A DRAWDOWN OF £19M.

THIS SUGGESTS AN ACTUAL CASH BURN OF £44.6M (£21.1m + £4.5m + £19M), BEFORE THE PRINCIPAL CONTRACTOR HAD EVEN GAINED ACCESS TO THE SITE TO COMMENCE CONSTRUCTION WORK ON THE FIRST ACCESS TRESTLE.

We think this warrants the close attention of the AIM Regulator and Serious Fraud office. What do you think?


AIOHO/DYOR

[diku] 24/6/2017 08:42

Yes name & shame those institutional shareholders playing with other peoples money...morale of story is joe public should stop putting money directly or indirectly via fundies into AIM companies...let the entire AIM go belly up....this is the only way to bring in strict accountability regulation into the so called "junior market"...

[pj 1] 23/6/2017 20:57

orinocor- The worry here has always been from day one, if things go pear shaped how the hell do you get the cash back from India? The II's will just move on to the next investments, that's what they do. It doesn't benefit them to chase lost cash or prosecute Villains. Sad but true.

[orinocor] 23/6/2017 20:45

In that case PJ1 its up to shareholders to get organised and make sure the guilty parties don't saunter off into the sunset with their swag. Gandhi is a billionaire if the news reports are to be believed. If the institutional shareholders sit back and do nothing they should be publically named and shamed.

[pj 1] 23/6/2017 20:16

After QPP Cenkos cannot afford anymore bad press (unless they themselves are at risk of going bust and need the business). Its hard to see Cenkos being the broker for much longer so the question is will any other Broker want to take a chance?

Id suspect by Late Autumn MPL is no longer listed.....