Pv Crystalox Solar Share Discussion Threads

[steve73] 19/4/2017 09:06

stronger GBP reduces value of contract settlement perhaps..?

[salpara111] 19/4/2017 08:51

Definitely relieved that I sold out in the low twenties.
Current share price seems to be below the liquidation value without any contract settlement so a bit pessimistic.

[cjohn] 04/4/2017 08:41

That is a definite possibility!

[zcaprd7] 03/4/2017 13:54

Agreed, though I reckon one of the management team will walk away with it all, on the premise that they'll take the workers with them, to save redundancy costs, which I never really buy into...

[cjohn] 03/4/2017 11:50

Yes, they said that thy're going to source ingots from elsewhere.

Bear in mind that much of the relevant production facilities were mothballed in a pristine state and the value written down in one fell swoop, (3 years ago from memory.) It's not as if we're talking about decades-old buildings that are the worse for wear. Irrespective of the minimal value of the very specialised machinery, the buildings themselves will be worth more than the written off balance sheet value.

[salpara111] 03/4/2017 09:27

Trades still heavily weighted to the sell side but the share price seems to be holding its ground which is good.

[steve73] 02/4/2017 13:04

I'd argue that even 10% is too high.
They've stated that ingot production (which is only done in the UK) will cease this year, so that leaves only blocking (UK) and wafering (Germany)- so they must be planning on sourcing ingots from elsewhere (probably once they've run down their polysilicon feedstock to zero). Hi-tec furnaces were probably a higher initial cost that the "industrial" saws, and would have very little resale value. The 2% therefore sounds reasonable..!

Maybe they're looking to move the blocking operation from the UK (depending on where the ingots are produced). Probably looking to spin-off the blocking & wafering, perhaps as an MBO, and then cease all UK operations. This may be the optimum way to reduce the wind-up/redundancy costs.

[cjohn] 02/4/2017 11:37

Ok, let's take 10%. Again you make my point for me. Thank you. 10% of 78m is 7.8m, which is considerably more than the balance sheet value of less than 2m.

As we're doing the calculations for wind-up, it makes obvious sense to come up with a realistic value for the PPE.

[salpara111] 31/3/2017 13:39

Not wishing to rain on your parade but I personally think that 10% would be a more appropriate level given how much overcapacity there is out there today.
My own valuation assumption is that any residual value for plant, equipment and any other fixed assets will be eaten up by closure costs, redundancy etc.
I look at the cash and polysilicon stock plus any contract settlement value to be the disbursable value to shareholders and that ranges from the high teens through to about 35p on my estimates.

[cjohn] 31/3/2017 09:30

Returning to the value of the PPE, Salpara has made my point for me.

He gives the example of a buy out of machinery etc at only 20% of replacement cost. Well, replacement cost of the assets is likely to be similar to the original cost of 78m. And 20% of 78m is 15.6m ie much more than the balance sheet value of 2m.

[salpara111] 30/3/2017 13:42

I have liquidated most of my position as I had a very good gain and needed to realise the capital gains this year to offset against other losses.
I guess I will try and deploy the cash elsewhere now with a view to buying back in again in 4 months or so.

[zcaprd7] 29/3/2017 23:58

Now, now stig. A lot of nervous Nellie's at 25p here. But 20p is basically cash now the inventory is sorted... The business, assets and settlement are in for free at this price.

[the stigologist] 28/3/2017 11:48

how's your grannies egg sucking coming along ?

[jimblack513] 28/3/2017 10:49

The payout could be a multiple of the share price in March 2016 is what they say. OK but the price was just 10p then. A multiple of 1 would be a payout of 10p. Good but not great.

[salpara111] 27/3/2017 12:57

Depends on whether the plant is reusable or not.
I worked for a global automotive manufacturer who sold one of their old engine assembly lines to a Chinese company about 3 years ago and from what I understand they got about 20% of the replacement cost.
If it cant be resold for purpose then value is likely to be at best 10% of value.
The long and short of it is that management have been gradually unwinding all their commitments and outsourcing what they can in anticipation of liquidating the business which is, in my view, the correct thing to do.
they should be able to trade off the remaining excess polysilicon over the next 6 months which is the last outstanding issue.

[zcaprd7] 25/3/2017 02:58

Well, last time they paid about 12 million euros to give the plant away to management...

[eezymunny] 24/3/2017 13:44

They have 30,000 hectares of prime undeveloped beachfront land close to St Tropez. If you don't believe me, read the annual report - like wot u cudda done in the 1st place ;)

[zcaprd7] 24/3/2017 13:06

Does the plant include land?

[eezymunny] 24/3/2017 12:36

Agreed Hugepants. My wind up number is 18p/share but I might be out by a wide margin. I think we can only guesstimate.

Agree choccy. Nothing else matters very much except arb. Perhaps it's 15-30% downside vs 100-200% upside. Looks a great bet to me but one that may not work out...

[choccywoccy] 24/3/2017 12:22

Just my view but...the PPE is an irrelevance here. It is worth peanuts. The only thing that matters is whether they win the arbitration and whether they get paid. The downside is pretty much (give or take a bit of losses until June) the current assets, maybe 15p a share. The upside is well, potentially very large, if they win and get paid. Everything else is pretty much irrelevant. It is an asymmetric.

[hugepants] 24/3/2017 12:15

Thanks eezy. I'm probably too pessimistic then as regards trading for this year but in a windup scenario there will presumably be additional one-off costs which could be a few million.

[eezymunny] 24/3/2017 12:09

The drop in NAV in H2 was primarily down to the "buyout" of their obligation to buy polysilicon at daft prices. That's just a one off, not a good guide to ongoing profits/losses. Hard to work out what the current year may bring, wrt op profit/loss, but that's not the place to start!

[the stigologist] 24/3/2017 12:04

They started out as Plant manufacturers but thought their Plant was so good why sell it they could simply make the ingots and wafers themselves and get more of the margin... so that's what they did. Their whole raison d'etre was owning this plant 'exclusively' so i doubt any competitor will want it as it'll be different to their own plant (and likely to have no ongoing maintenance support infrastructure going forward)

MBO seems right strategy. Investors should be given a choice if they want cash or equity participation.

[hugepants] 24/3/2017 11:37

NAV dropped by about 4M euros from the interims to the final year results to end December. They say prices started collapsing again in H2 so does that give an idea of the losses going forwards? Say 7.5M euros per annum? Not very scientific I admit but they've not given much indication of the current trading but I assume its loss-making again now given the downbeat tone.