Pv Crystalox Solar Share Discussion Threads

[zoolook] 09/11/2017 10:21

Hi CJohn

Thanks for the clarity on this.

[cjohn] 09/11/2017 09:48

Hi Zoolook,

The arbitration is in lieu of a trial for breach of contract. The other side lost. They pay a penalty of 34m euros and interest. This is "awarded" to PVCS; ie PVCS needs to do nothing to receive the 34 million and interest. It's an award.

However, the award doesn't mean the other company couldn't, if they so wanted, now buy the 22.9m wafers. If they do this, it doesn't mean PVCS suddenly lose the penalty payment. The other company would have to pay for these wafers in addition. This would be loss-making for both parties, I assume......

[steve73] 09/11/2017 09:06

H1 results stated there was 27.9MM EU in cash plus 7.4MM in Inventory. Loss was 5.4MM. So assuming the same loss for H2 (it'll probably be a little less due to lower salaries and lease costs), we should end up with around 63.9 MM including this settlement, or 40 ct/# (35pps).

Wind-up cost might be similar to another 6 months losses (just a pure guess), so a final payout could be around 32pps. Not sure whether there would be a tax liability on the settlement, or whether it could be offset against recent losses (anyone know?).

Also, AIU the RNS, there could be a reduction if we have to supply wafers as per contract... IIRC wafer costs were around $5/w when these long supply contracts were set up. Currently wafers are closer to $1/w, so there might be a 5MM Eu cost there (eq. to about 3pps).

Happy to be corrected on my assumptions if anyone has better info.

[the stigologist] 09/11/2017 09:01

legitimate questions

worth ringing the company IR to ask

[zoolook] 09/11/2017 08:58

"The obligation to pay is not conditioned upon the delivery of 22.9 million wafers, outstanding under the contract, although the customer's right to seek such delivery is not precluded by the award."

Does this mean that if the customer did seek delivery of the 22.9million wafers it would be at no cost additional cost to them or that they would have to pay for the product on top of the award?

And how long could the customer retain the right to make this request as this would be an impediment to winding up the company if the right didn't have an expiry date.

Or am I asking the wrong questions?

[kirk 6] 08/11/2017 20:23

Look very undervalued to me here

[muffster] 08/11/2017 16:20

Think we will see a turnaround strategy mentioned now. Happy to hold

[zcaprd7] 08/11/2017 16:19

The Group retains its operational wafer production capabilities in Germany and will continue its focus on the French niche low carbon footprint wafer market where it has some competitive advantage...A wafer seems to be tiny (mm long) and they are normally discussed in terms of power, so it's hard to determine how much they need to potentially hand overI still think the company will buy pvcs rather than pay the full amount though.

[zcaprd7] 08/11/2017 16:03

No mention of legal costs either...

[salpara111] 08/11/2017 15:39

plenty of volume on both the buy and sell side today but my best guess is that the current valuation represents closer to a worst case scenario so I will hold for now.

[zcaprd7] 08/11/2017 15:22

That is the key assumption I suppose... I thought pvcs still had a few knocking around that they were offloading? Also, they can only sell them at below the cost of manufacture, so presumably they could buy a load off the market if needs be?I imagine we have the results of the strategic report to come this week for next steps?

[salpara111] 08/11/2017 15:21

Have to confess to being at something of a loss here.

34M Euro plus interest is at least £30M.

Does the market think that they wont pay?

I would have expected to see the share price over 40p with that amount of cash coming in but we are in fact down?

I can only assume that the market is pricing in the fact that the customer may well insist on receiving the product and in that case I guess the award would shrink considerably in net terms.

I am inclined to hold onto mine for the moment and see what plays out as there can be little downside from here given the cash situation.

[pejaten] 08/11/2017 14:25

Presumably the compensation is the price difference between contract and market price. That would mean if they want the volumes they would have to pay extra for the volumes they take? Probably no point?

[zcaprd7] 08/11/2017 13:22

How much are 22.9m wafers worth?

[zcaprd7] 08/11/2017 13:20

Yes, about 35p I'd say, strange price action today?

[yamaha865] 08/11/2017 11:30

So any ideas what the net distribution could be?? Seems EUR 62m with award and cash, plus inventories and any other net assets, less shut down costs.

Maybe something like EUR 60-65m distribution? Would imply a share price of about 34-35p

[pastybap] 08/11/2017 11:06

Well there we go. €34m + interest, and the client has the option to take delivery. Pretty underwhelming tbh.

[cjohn] 06/11/2017 07:39

Hi Stigologist,


I've taken a quick look at OXS, to see what happened in that case.

A few years ago, there was a long drawn out arbitration between Oxus Gold and the governemnt of Uzbekistán regarding ownership of assets in Uzbekistán.

The arbitrators were UNICITRAL, the Unied Nations Commission on International Trade Law, which is sometimes involved in cases where one or both parties are governments.


Oxus lost the arbitration in 2015 and subsequently folded.

Would you explain how you think the Oxus case can cast light on the circumstances of the PVCS case, and how exactly your experience with Oxus differed?

all the best
Cjohn

[the stigologist] 05/11/2017 23:12

Doesn't sound like my experience with OXS

[cjohn] 05/11/2017 19:05

Hello zpcaprd7,

You asked whether the two parties will have seen the draft judgement.

My understanding is as follows. The two parties WILL have seen the draft judgement. There is a draft judgement, precisely so the two parties CAN read it over and draw attention to any (material) factual errors on the part of the arbitrators.


Say the final judgement was published without a draft, and there turned out to be a material inaccuracy; this could lead to appeals against the judgement (and in some cases invalidate it.)

The use of a draft judgement avoids this pitfall.

The two parties are strictly forbidden to reléase the contents of the draft to third parties; there is a strict legal embargo. Ooly a handful of figures on either side will know the contents of the draft.

Breaching the embargo can lead to claims for damages; so it's in no-one's interest to leak.

I hope this is of some help.

I do not believe that any minor ups and downs in the PVCS share price in the last couple of weeks are linked to a supposed leak of the draft judgment, (whether a positive outcome for PVCS or a negative.) The general trend in the last few weeks has been upwards as might be expected given the approaching deadline for any award.


In view of the previous behaviour of the opposing company, we might expect them to procrastinate right up to deadline for checking the draft judgement. But this is speculation on my part.


All the best


CJohn

[zcaprd7] 03/11/2017 13:49

Topped up, in for a penny as they say...

[zcaprd7] 03/11/2017 12:32

Mostly playing with the spread, some MM games (I hate that bb trope) perhaps to score some cheap stock before the decision?

[zcaprd7] 03/11/2017 12:04

Some news leaking?

[cjohn] 03/11/2017 07:57

They would be told if there was a delay in finalising the draft judgement. So there hasn't been a delay at that point, at least.



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