Mercantile Ports & Logis... Share Discussion Threads

[orinocor] 30/6/2017 22:55

I thought Lord Flight was a world expert on ports construction. That's why he was appointed. Then again he probably knows as much as the rest of them which is nothing.

Nikhil Gandhi. I thought he was the industry expert?

Will the Indian banks go after Gandhi when they don't get all their money back?

[pj 1] 30/6/2017 22:31

LOL-strangely he also never replied to communications after declaring on appointment how impressed he was with works completed to date. Off course the real irony is that they haven't completed anything other than fund raises.

[mount teide] 30/6/2017 21:44

Another interesting comment from the Prelims is this:

Statement of Directors’ Responsibilities

'The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s website.'


After launching the new website along with the Shareholders Circular back in Oct 2016 to raise £37m, with the following statement about the specification of the New Karanja Terminal:

'1000m of Quay with Ship to Shore Cranes'

The Directors last week decided to fess up and replace it with:

'800m of Quay, utilising both sides of a 400m jetty, serviced with multipurpose cranes'


So, 8 months later the Market is advised that the management have decided to change the BMW M5 specification to a 1 series Bread van and charge shareholders another £37m for the privilege!

[mount teide] 30/6/2017 21:41

31 October 2016 Shareholders Circular - possibly one on AIM's greatest works of Fiction

You know - the fantasy world document to raise another £37m from the pension funds of British workers that fraudulently claimed:

Work had continued on site without material interruption since October 2015, and that by Jan 2017 another 65 acres of land reclamation was expected - misrepresentation on an industrial scale, since the company carried out NO land reclamation work for the 4 months prior to the Shareholders Circular and during the two month period afterwards, resulting in ZERO acres of Land reclamation for ENTIRE period through to Jan 2017 - how the Nomad let them get away with that beggars belief.

Or the claim that by the end of Q2, MPL would have completed the 200 acres of land reclamation and construction of 6 berths, of which 4 would be operational - misrepresentation on an industrial scale - MPL managed to add 15 acres to the 75 acres from a year ago and then promptly announced they were shutting down all Land reclamation for at least another 6 months(to avoid disappointment, shareholders would be very wise to accept this is all they will ever see!). So MPL told shareholders they expected to achieve 125 acres in 12 months - while actually delivering 15 acres in 18 months!) Shareholders will be aware ITD during a 21 month period that included 2 monsoon seasons, managed to reclaim 225 acres at JNPT in tidal waters up to 21m deep!


It also contained the following statement:

'The Directors expect that the continued expansion of JNPT will present significant opportunities for the Company. In particular, the Directors believe that the Company will benefit from the Facility being able to offer:

• mid-stream discharge and loading of cargo at anchorage whilst vessels wait to berth at JNPT.'

Readers will be aware we told the Nomad this was nonsense and highly misleading for a number of reason:

Nearly all the vessels trading to JNPT were gearless(no cranes) making it a physical impossibility.

For the last 12 months very few vessels destined for JNPT have ever been forced to wait in the anchorage for a berth.

An earlier investigation funded by the Indira Harbour terminals, established that stream container transhipment, from even very small container vessels equipped with onboard cranes, would still be very difficult to achieve even in calm sea and wind conditions.

The JNPT terminals were doubling the terminal capacity over the next few years - to ensure all vessels immediate access to a berth, and spending hundreds of millions to improve the road access.


This clearly went straight over the clueless Management's heads because they sent a rightfully concerned II, a couple of photos of small geared break bulk/container ships in an attempt to refute our claims, along with some telephone 'comfort' from a NED who shall remain nameless.



Now roll forward to the Prelims -

'The addition of 3.0 million TEUs at JNPT will address congestion on the water side. However, the enhancement of the road side capacity is not in line with the sea side capacity and for incremental volumes, evacuation from JNPT by the short sea route (8-9 NM) to Karanja Facility seems to be the only alternate.'

So, the clueless MPL management having been rumbled that their ridiculous claim in the Shareholders Circular was total nonsense, now seem to be back to making it up as they go along again, by laughably claiming that one of the top 20 container ports in the world, while expanding capacity to 10m teus, will be forced to "evacuate" cargo out of the terminal BY SEA.

Shareholders will be aware that following the implementation of a number of new operational measures early last year, JNPT recently reported that the Port had not had a road congestion problem for more than 12 months and, is currently spending hundreds of £millions improving the Uran highway to ensure it is more than capable of handling the additional terminal capacity without congestion!


The ridiculous MPL claims of stream transhipment of JNPT container cargo made the management look like desperate fools clutching at straws but, their 'evacuation' of cargo from JNPT claim is totally irrational and illogical. I spoke to a senior terminal manager at the DP World JNPT terminal today and, he laughed out loud, when i told him the MPL management were claiming in their Company Statement's, that following opening of T4, JNPT would likely be forced to 'evacuate' landed containers back over the quay to Kajanja, to avoid landside congestion as, that was the only alternative!

Apart from the fact that NO major container terminal would ever do this from a credibility viewpoint, MPL's management are also seemingly oblivious to the fact that, if in the extremely unlikely event it ever did, the Indira Terminals would likely get the business since they were barely half the distance from JNPT by sea!


AIOHO/DYOR

[diku] 29/6/2017 08:23

How about a private investigator uncovering what is going on here...


Complete lack of management integrity - Board promotions rather than resignations for a management team responsible for a drop in the share-price of 98% post IPO, from 250p to 4.25p!

Management travelling expenses and hotels bills totalling circa £25k/month for most of the last 7years.

[waterloo01] 28/6/2017 23:41

MT, I think that is the nub of it. There is no value here given the debt to the banks and their lien over the asset. Indeed the value of the completed project is still less than the outstanding debt.

[mount teide] 28/6/2017 23:37

I reported to the person in Cenkos responsible for regulatory compliance that the account manager responsible for handling their MPL account has consistently failed to provide answers to our queries over a considerable time. To us, he acted more like a defence counsel for MPL than a Nomad - a number of telephone conversations ended in shouting matches.

These included queries over comments in RNS Statements and/or Financial Statements that were either deliberately misleading to make it difficult, if not impossible to ascertain the rate of progress with the berth piling for example, in order to be able to hold management to account.

Or completely false statements, as in the outrageous claim made by the Executive Chairman, that Land reclamation work was ongoing and progressing in line with management expectation, during at least a 9 month period when the only means of access to the Port for commercial aggregate trucks required the suicidal action of a drive across a deep, 40m wide fast flowing tidal creek!

Funnily enough, there was no enthusiasm among the drivers for an early grave and so, sensibly they waited a further 9 months until the creek had been bridged.

AIMHO/DYOR

[pj 1] 28/6/2017 23:08

Note- all from memory DYOR

[pj 1] 28/6/2017 23:08

Strangely they didn't even infer it was a pre-payment!

[pj 1] 28/6/2017 23:07

MT
A few years ago I raised a query with Cenkos and the NEDS as to who the £10m in debtors was (receivables or whatever its called). I remember other P.I.'s also questioned it at the time, maybe even on the SPL thread?

No answer to our query was ever given (2014/15 from memory)

[mount teide] 28/6/2017 22:49

pj1 - are you suggesting the Company may have issued a cheque made payable to another Company/someone with a different name to that which was put on the chequebook stub?

Surely not!

[mount teide] 28/6/2017 22:37

oronocor - that valuation estimate is based on the banks taking over the Port in the next 18 months and looking for a trade buyer and, includes the following very reasonable assumptions:

90-100 acres of Land reclamation/hardstanding - we are confident there will be no more

360m max of low cost open Jetty capable of handling only small vessels

-3.5m CD of water in the access channel

Port handling equipment leased

2 mile single lane heavily potholed dirt access road servicing a £150m new port

Annual operating profit of 20% of current debt interest payments at very best

etc etc


Any prospective buyer would not be interested in the original build cost, but with further investment whether it could be made a commercially viable alternative to the Indira Harbour terminals.

At a £30m valuation, we doubt many port operators would be interested in a terminal only capable of handling barges and small coasters carrying extremely low value bulk and break bulk cargo, which has an average cargo round trip running distance jetty to storage compound of 1.8km( how not to build a port in one easy lesson!).

To build the identical docks and terminals in the Indira harbour today from scratch, to handle the traffic they presently handle would mean certain bankruptcy. The Port of Tilbury's docks complex today would have an estimated build cost of many £billions, yet if the Port were sold today it would at best raise a £billion - based purely on 20 or so times the earnings. Incredibly, the Government sold the Port of Tilbury to the management for £32m in 1989. Middle and junior Port Management who bought the maximum 5,000 shares allocated to them by the Management Board at a cost of £1 a share, saw the value rocket to £81 a share within a decade, as a result of an offer from Forth Ports.


AIMHO/DYOR

[pj 1] 28/6/2017 22:36

What's the odds the £10m pre-payment to ITD (which I believe showed in debtors) wasn't paid to ITD direct?

Any takers?

[orinocor] 28/6/2017 21:43

If MT is right and the finished port is only worth £30M then we are looking at a scam of epic proportions. That's less than the value of the last placing never mind the £48M raised as loans and the IPO proceeds!

[mount teide] 28/6/2017 21:09

Over 4 years ago MPL made advance payments of nearly £10m to ITD, which have since risen to £16.7m towards 'mobilisation and quarry development'.


Year End 2013 Prelims
'Advances include payment to EPC contractor of GBP 9,916,154 towards mobilisation advances. These advances will be recovered as a deduction from the invoices being raised by the contractor over the contract period'

Year End 2016 Prelims
'Advances include payment to EPC contractor of GBP16.70 million (prior year GBP13.25 million) towards mobilisation advances and quarry development. These advances will be recovered as a deduction from the invoices being raised by the contractor over the contract period.'


In our experience it is simply unprecedented that most of these advance payments are yet to be deducted from ITD's invoicing some 4 years after they were made and build out commenced!

This suggests to us that the build out contract is not being administered under the usual payment terms used throughout the industry for this type of marine facilities construction contract but, more likely payment terms many with long experience in the industry have never come across before.

Which must be more than a little worrying for shareholders following the recent news that Executive Chairman Nikhil GANDHI, is currently the subject of an Indian High Court criminal case for issuing a SIGNED BLANK CHEQUE to a major port development contractor.

Hmmmmmmm.

AIOHO/DYOR

[kramch] 28/6/2017 17:32

I have had a quick scan of the published accounts and note as follows;

Impairment review; "value in use" higher than final expected cost of completed port - good to know!
When completed = c 200 acres, 6 berth capable of handling 4000DWT vessels upto 5M draft.
Berth configuration now; 800M of quay length using 2 sides of 400M jetty (plus 600M waterfront).
So far; 90 acres reclaimed, materials for further 10 acres on site,
Jetty; 160 piles sufficient for 250M jetty, intent to lay 240 piles. Jetty slabs now fabricated for 150M, to be laid in near term,
To commence ops by end Dec 17 (2 berths),

Business development team in place, 2 MOU’s announced for customers wishing to use facility, further announcements in coming weeks.

Business model; 4 prongs; coastal movement of cargoes, feeder movement of cargos to larger ports, mid-stream discharging & loading of cargo, develop Container Freight Station,

They cite bottlenecks in evacuation of materials from the larger JNPT across the peninsular, a new rail head “Uran” under construction 5 km away (inferring better access than JNPT’s)

Admin expenses are £2.4M; directors fees £348k, employee costs £306k, other admin £1.479M (don't mention travel expenses this year).

K.

[mount teide] 28/6/2017 11:55

Would any major ports group be interested in a Karanja Port Terminal with the following spec - 90 acres of hardstanding and a 300m lightweight open jetty with -3.5m CD water depth in the 3 mile approach channel from Mumbai Harbour - if offered it some time in the future for £30m?

Extremely unlikely. Why ?

The draft restriction in the access channel is a major issue.

To increase it to -6m CD, to attract shipping currently serviced at the Indira Harbour terminals would probably cost north of circa £50m - in addition, as in the access channel to JNPT, there will be very significant depth maintenance dredging costs following every monsoon season, which sees hundreds of millions of tonnes of sediment deposited into Mumbai Harbour and Karanja Creek annually from the hinterland's connecting waterways. The Indira Harbour terminals do not face this issue since they are in a dock with a fixed water depth accessed by a lock entrance, adjacent to the main deep draft channel in Mumbai Harbour.

The Indira Harbour terminals currently handle circa 15m tonnes per year of stream transhipment cargo from vessels anchored in Mumbai Harbour. This is mainly low value bulk cargo. Many of the vessels they discharge in the anchorage have a loaded draft too deep, to directly access the Indira Harbour berths and so are 'lightened' in the anchorage to reduce the vessel draft to a level permitting safe access to the berths.

Do you think the current Indira Harbour operators are going to let Karanja have the stream transhipment element of the cargo, if Karanja is unable to accept the ship once it has been lightened to a draft capable of accessing the Indira Harbour terminals. Of course not - they will say to the vessel operators, "Karanja is only able to discharge the vessel at the anchorage, which will take many weeks - whereas we can lighten the vessel in the anchorage and then move it to the Indira Harbour berths to finish it off in a fraction of the time"

During discussions with Pavan, after he had commenced some initial commercial marketing of the port; with even his extremely modest knowledge and understanding of shipping and the ports industry, it quickly dawned on him that the ship handling rates for stream transhipment bulk and general break bulk cargo, needed to make Karanja a commercial success were simply not there. As evidenced by his comment which i noted at the time: "we believe using much of the site for container transhipment and other activity could actually offer shareholders a better result than handling mainly shipping" You don't say ! And this was before the access channel depth was reduced to -3.5m CD, and the Port development cost surged by another 40% for a much reduced specification, with a materially higher operating cost!

We believe the decision to reduce the depth in the access channel to -3.5m CD was taken because the management's technical advisors pointed out that this is the natural scoured depth of most of the 3 mile Karanja creek and, so the only dredging they would have to carry out is largely the area between the present access channel and the berth, together with the berth pockets. Laughably, it would seem even this has taken them more than 3 years to carry out as a result of using 'stone age' technology (mobile crane and bucket grab on small floating pontoon), rather than a computer controlled, high performance suction dredger.

Considering the cost of the Port development has ballooned to a totally implausible £150m - what technology do shareholders believe the MPL management has probably deployed to carry out a sub sea depth survey of the dredged area to ensure it has been completed in line with the contractual terms?

A 'stone age' marked hand leadline from a floating pontoon and a hand held GPS plotter? or,

The real time, 3D colour, sub sea survey images that modern purpose built GPS controlled dredgers work with to, maximise productivity and minimise on-site work time?



AIOHO/DYOR

[mrx001] 28/6/2017 08:33

Guys, what are you hoping for holding shares in this company run by scoundrels? If it is giving them your investment funds without any gain then I can understand it. Just look at their track record, they are here for lining their pockets without doing anything like a days work.

[phowdo] 27/6/2017 12:06

Grant Thornton are as much use as a Chocolate Teapot.

[mount teide] 27/6/2017 11:55

Well, after giving up hope of a reply, a short and sweet acknowledgement from Grant Thornton - and no more - in connection with a request for information as to the methodology they use, to check the cash funds claimed by the management of Companies they get paid to audit, are actually in the bank accounts.



Dear Mr XXXXXX

Thank you for your email enquiry.

We owe a duty of confidentiality to our client and cannot discuss any details relating to the client about which you are seeking information.

Your sincerely

For and on behalf of Grant Thornton (UK) LLP


Grant Thornton audited AIM fraud Globo's accounts - after Globo issued a financial statement which stated that they had circa £100m on deposit - it subsequently proved to be a total illusion.

[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