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[wylecoyote] 18/10/2012 19:43

Coco, maybe you could explain why it fell to 30ish p then rose to 40 p? A good 30% rally there...

[petersinthemarket] 18/10/2012 15:42

Buywell2
Congrats, good charting - regretably, you were smack on the money with this dog.
For some of us shafted holders, can you now conjure up a chart which might imply some hope of a healthy recovery sometime!
Seriously though, anyone, how long is it likely to take for this situation to play itself out.

[buywell2] 18/10/2012 15:12

Did you mean this ?

Chartwise 40p call made on 9th Sept hit today


Worth learning about charts if you are serious about investing .... advfn's kit comes in very handy I find







buywell2 9 Sep'12 - 09:14 - 1306 of 1449 edit







40p retest chartwise could come if support breaks






Which has now become this ....





What's your problem ?

[petersinthemarket] 17/10/2012 19:44

Constructive criticism pls cocomac0!
Kindly explain what your view of shft's future might be.

[cocomac0] 17/10/2012 17:44

Give a child a crayon and he'll draw something that makes more sense than that stupid chart which has been posted........ again!!!

[hectorp] 17/10/2012 09:10

Resistance should appear around 45p. Not time to be adding yet.

[buywell2] 17/10/2012 08:38

Chartwise 40p call made on 9th Sept hit today


Worth learning about charts if you are serious about investing .... advfn's kit comes in very handy I find







buywell2 9 Sep'12 - 09:14 - 1306 of 1449 edit







40p retest chartwise could come if support breaks

[redbraces] 16/10/2012 16:25

Yes,

It is called, a dead cat bounce. !!!!!!!!

[john09] 16/10/2012 15:09

Meanwhile ...this is some bounce today!

[c1d] 16/10/2012 12:11

If SHFT are insured against all and any losses I will eat my hat. What insurer in their right mind would agree to this level of cover?

[muckshifter] 16/10/2012 12:06

Noirua,
The contractor normally insures "the works" for the client as an item in his price. It covers everything done and every item provided under the contract, for the employer, and the contractor. Usually, the client asks for proof that the insurance is in place before the commencement of work because it protects him even if the contractor goes bang.

But, it does not cover poor productivity because of bad ground.

In this case Eurochem, I'm absolutely sure, took the bad ground risk, ie. they would have had a contingency within their budget, not insurance because you can't get it - that's what a cost plus contract effectively does.

Would have been a hell of a brown envelope to get $800 million in as no such payment went through shft's accounts, did it?
Regards.

[noirua] 16/10/2012 11:42

As I worked on British Gas contracts across Scotland, and for four years at Kirriemuir, near Dundee, I can assure you that what I have posted #1539, is factually correct for underground projects. All major parts came through Perth, Scotland.

There were many insurance claims made against companies and about 85% were agreed with insurers. Though claims in these cases were between £100k and the highest £3.5m [a 24inch valve and by-pass missed by contractor], in 1970s/1980s money values -- there were no massive claims throughout the 16 years I was with them.

[muckshifter] 16/10/2012 11:38

Sorry Noirua, but that's absolute rubbish.
Regards.

[noirua] 16/10/2012 11:24

Excellent incorrigible.

On contracts I've been involved with concerning the 'old' British Gas in the 1970s and 1980's on their undergound gas pipelines, up to 48 inch diameter, it was necessary to insure every part from flange, valve and pump individually -- to British Gas standards that were higher than normal British Standards.

It seems certain that SHFT would have also insured, as contractor, everything due to be placed into the ground. Also every item of equipment used in carrying out the digging, including break downs. This would also have included the grout supplied onsite.

A contractor would often be a quite small outfit and therefore could not be sued as they would automatically go into receivership. It was necessary for the company, Eurochem in this case, to pay for all insurance that was carried out by SHFT on all parts and would include insurance for SHFT to cover legal costs to defend their position.
On ground conditions etc., Eurochem would have paid SHFT a sum to insure against any losses. It seems this sum MAY have been $800 million.

From all this, as said before, the loss to SHFT would be their good name. Thus, they must fight the claim robustly.

So my guess is that SHFT will make no actual loss.

[hectorp] 16/10/2012 11:19

at last I understand thanks to muckshifter's very clear post many thanks

R Turner no need to be unpleasant. My views may not have been as clear as I would like but this thread is for the benefit of all.
PS what happened to Metnor ? cancelled on AIM 2009.
H.

[incorrigible] 16/10/2012 07:54

muckshifter's points on insurannce seem valid. i got the below response from the CFO:

Thank you for your mail to us. I am replying for Mr. Peters.

At this stage, I can only reiterate the announcement we made on 5 October 2012.

We have not yet received notification of the arbitration claims but we believe that any such claims are without merit and will contest them robustly.

We are pursuing our claims against EuroChem.

Although the company does carry insurance for its operations, we cannot comment at this stage on the appropriateness or relevance of insurance related to these apparent claims.

[rcturner2] 16/10/2012 07:32

Excellent post.

[muckshifter] 16/10/2012 07:13

The possibility of encountering terrible ground conditions is something which is ALWAYS considered and extensively discussed in any contract for underground work or major muckshifting, before a contract is agreed (because it happens in a significant percentage of jobs). The risk is then allocated between the parties to the contract and either priced into the contractors price, or forms part of the clients budget contingencies.

For example, a couple of years ago, I did a muck tender where the client's Consultants were convinced that a particular high risk existed, based on extensive boreholes which they, and I, studied. That risk sat with the client (UK Gov) but my company was asked to price for taking that risk, which had an anticipated worst case cost of £1m+. I was sure that the risk was minimal and we took the risk on, for an additional agreed payment of far less than the worst case, and it cost us, not a bean.

Over several decades, I've been involved in major muckshift projects in the UK and six other countries on various continents. None of those projects were insured against bad ground conditions by either the client or the contractor, because, I assume, no insurance company was prepared to take on such risks. Jobs are always insured against every form of accident, employers liability, public liability, contractors all risks, and the works, but the last two mean that when you are half way down the shaft you (and the client) are insured if the bit you built collapses, not for your costs if the job proves more difficult than you thought at time of tender.

In the case of Eurochem, it is axiomatic that Eurochem took on the risk of bad ground conditions. That is what a cost plus contract effectively means. But the points that I noted in post 1515 lead me to believe that perhaps shft took on programme liability, and I seriously wonder if they did get a cap on liability on this one (Almost all?).

The only relevant "insurance" in this case, imho, is perhaps that provided by the South African equivalent of the Export Credit Guarantee Department that we had in the UK. But I don't see them accepting that Eurochem are in default of payment obligations while there is a dispute procedure underway.

So I don't think you need to worry about insurance premiums going up, because I think you'll find insurance doesn't cover the problem. In fact, it would be interesting if those here who keep babbling on about insurance could explain why shft made past provisions for losses on contracts where bad ground was encountered.
We will see in due course no doubt.
Regards.

[rcturner2] 15/10/2012 17:17

I can see a case for buying them, but not at the moment.

I will be waiting it out on the sidelines for a while, probably until at least the next set of results, as I want to see how bad things are.