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RB.V - Russell Breweries Inc

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redhots Newbie

redhots

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Here are some details on the US craft beer market. 

http://vinepair.com/wine-blog/craft-beer-bubble/

 

It is interesting how many breweries are popping up in Washington, Oregon, etc...

 

This quote is from one of the bigger brewers... which are being gobbled up by the big boys.

Anyone who does want to sell, should be selling right now. Valuations are out of this world. There are people swarming all of us wanting to give us money. In a two-week period, I had 17 different private equity firms that called.

 

 

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ourkid8 Newbie

ourkid8

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Sanjeev... *Hint Hint*   

 

This quote is from one of the bigger brewers... which are being gobbled up by the big boys.

Anyone who does want to sell, should be selling right now. Valuations are out of this world. There are people swarming all of us wanting to give us money. In a two-week period, I had 17 different private equity firms that called.

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TwoCitiesCapital Newbie

TwoCitiesCapital

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Sanjeev... *Hint Hint*   

 

This quote is from one of the bigger brewers... which are being gobbled up by the big boys.

Anyone who does want to sell, should be selling right now. Valuations are out of this world. There are people swarming all of us wanting to give us money. In a two-week period, I had 17 different private equity firms that called.

 

This is a good question because I was under the impression craft breweries were in bubbly territory while most likely, in the short term, over-saturating the market. That being said, obviously Sanjeev sees value in Russell. I was also under the impression, with his offer to buy a controlling stake, that this was more of a long-term investment and not some trade.

 

So the question is - how ludicrous of a price would Sanjeev have to be offered for him to sell or is this a company that is buy-and-hold forever?

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LesPaul Newbie

LesPaul

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Russell branded gear is in! I tried to buy a shirt, but the shipping to Ontario was kind of expensive ($18 I think?). I'd be okay with someone shoving the shirt into a beige envelope and putting it through Canada Post after all.

 

The new site looks great, the activity on social media is distinctly different than before and I overall have a lot more positive sense about the branding in general; however, it's my opinion that we should be open to all options, even if selling earlier than planned (or selling at all) runs counter to a standing strategy and vision that has been put into action.

 

Sometimes this even means selling a beloved home/guitar/car when someone offers you crazy $!

 

I'm sure management will make the right decision, whatever that may be.

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abitofvalue Newbie

abitofvalue

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Had a chance to meet with an early investor in Lagunitas last weekend - apparently craft brewery valuations are truly getting silly here in the states. He mentioned a couple of recent deals and how those were at historically high valuations even accounting for growth (think 15x+ this year's projected revenue). He also mentioned that incoming calls from buyers were really aggressive most of the year - esp once rumors of the sale started getting out. their veiw was distribution remains a major issue so some of the financial buyers dont realize what they are getting into.

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ourkid8 Newbie

ourkid8

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Thanks bud. There was continued slow progress across the board.  I am surprised by the large jump in professional fees but that's a one time hit due to the defense from Premier. My concerns is around the following:

 

The Company will need additional capital to fund its planned discretionary capital expenditures for the

next twelve months. There is no guarantee that the Company will be able to raise additional equity or debt

financing on favorable terms if at all or generate cash flow from operations in the future.

 

Where did you see Q1 results?

 

Personally haven't really looked at the FY2015 stuff (my investment is tiny - and I actually just wanted some PDH)...but I know Q1 came out today!

 

http://www.sedar.com/DisplayCompanyDocuments.do?lang=EN&issuerNo=00016831

 

Here you go!

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ourkid8 Newbie

ourkid8

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I hope so and I REALLY hope the BOD is carefully exploring the potential opportunity to sell itself in this bubbly market. 

 

"The Company will need additional capital  to fund its planned discretionary capital expenditures for the next twelve months. " 

 

I think that's just standard lingo so investors can't sue them if they run into unforseen issues. It says the same in the MD&A for Q4. It's not like they lack liquidity and I haven't read anywhere about big capex investments coming up.

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kab60 Newbie

kab60

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I might be wrong, but I think it basically says that the company will need to spend money to keep going. They have almost 900.000 in cash.

 

This one is buried deep in the notes but I think it shows there's progress being made (I think it might have been released before). They're finally off those stupid 9 percent related party loans.

 

21. SUBSEQUENT EVENT

On October 1, 2015, pursuant to the loan agreement entered with Business Development Bank of Canada (BDC) on July 3, 2015, the Company finalized a loan of $788,000 which was used to repay in full the principal and interest of the two long-term debts (Note 9(b) and 9©). The BDC Loan, bearing interest at base rate of 5.15% plus a variance of 1% per year maturing April 15, 2023, is secured by the assets of Fort Garry Brewing Company Ltd.

 

Apart from the higher legal fees it seems costs are coming down because Sanjeev and co. are cleaning up. Bonus payments for senior management has also decreased in Q1.

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ourkid8 Newbie

ourkid8

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Yup, continued slow progress across the board.  Let's hope you are right as it is a concern.  Sanjeev, care to add additional colour? 

 

I might be wrong, but I think it basically says that the company will need to spend money to keep going. They have almost 900.000 in cash.

 

This one is buried deep in the notes but I think it shows there's progress being made (I think it might have been released before). They're finally off those stupid 9 percent related party loans.

 

21. SUBSEQUENT EVENT

On October 1, 2015, pursuant to the loan agreement entered with Business Development Bank of Canada (BDC) on July 3, 2015, the Company finalized a loan of $788,000 which was used to repay in full the principal and interest of the two long-term debts (Note 9(b) and 9©). The BDC Loan, bearing interest at base rate of 5.15% plus a variance of 1% per year maturing April 15, 2023, is secured by the assets of Fort Garry Brewing Company Ltd.

 

Apart from the higher legal fees it seems costs are coming down because Sanjeev and co. are cleaning up. Bonus payments for senior management has also decreased in Q1.

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ourkid8 Newbie

ourkid8

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PDH's statement:

 

Management has raised capital through equity and debt financing, and anticipates that it will

continue to do so, in addition to conducting revenue generating operations. The outcome of these

efforts cannot be predicted at this time.

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LesPaul Newbie

LesPaul

Posted
Posted

Denver Smith Acquires Stake in Russell Breweries Inc.

 

MILFORD, CONNECTICUT--(Marketwired - Dec. 9, 2015) - Denver Smith("Mr. Smith"). This press release is being disseminated as required by National Instrument 62-103, The Early Warning System and Related Take Over Bid and Insider Reporting Issues, in connection with the filing of an early warning report (the "Early Warning Report") regarding the acquisition of securities of Russell Breweries Inc. ("Russell") by Mr. Smith.

 

Mr. Smith is pleased to announce that he has acquired 769,000 common shares of Russell, a producer of premium beers in Western Canada with breweries located in BC and Manitoba.

 

Mr. Smith has acquired ownership of 769,000 common shares representing approximately 0.88% of the presently issued and outstanding common shares. This acquisition increases Mr. Smith's position in common shares of Russell to 2,030,300 or approximately 2.33% of the presently issued and outstanding common shares of Russell.

 

Following completion of this acquisition, Mr. Smith together with joint actors 73114 Investments LLC and Paratus Capital LLC, owns and controls 9,378,860 shares, or approximately 10.77% of the presently issued and outstanding common shares of Russell (based on 87,083,788 basic shares outstanding as of September 30th, 2015). These shares are held by 73114 Investments LLC (6,948,800 shares), Paratus Capital LLC (399,760 shares), and Denver Smith (2,030,300 shares). Mr. Smith is the Chief Investment Officer of 73114 Investments LLC. Mr. Smith is a founding partner, officer, and 33.3% owner of Paratus Capital LLC.

 

The common shares were acquired in multiple trades on the open market on the TSX Venture Exchange at prices ranging from $0.055 to $0.06 per security. Mr. Smith has acquired the common shares for investment purposes, and may acquire further common shares, or dispose of its holdings of common shares, both as investment conditions warrant. As of the date of this press release, Mr. Smith and joint actors currently intend on acquiring more shares of Russell on the open market or through other means. Russell is listed on the TSX Venture Exchange under the symbol "RB".

Denver Smith's office is located at 52 Carlson Drive, Milford, CT 06460.

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ourkid8 Newbie

ourkid8

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The news is not around the $45k purchase, it is around the fact Mr. Smith and joint actors controls almost 11% of the company. I hope he will push for BOD seat and try to sell the company. 

 

Man buys $45,000 of shares on open market.  Lol.  You know it's a microcap when that is news.

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ourkid8 Newbie

ourkid8

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Did everyone vote on the proxy material? I voted with management besides on the approval of the stock option plan which allows management the ability to grant options up to a maximum of 10% of the issued and outstanding shares.  This needs to be addressed and since Sanjeev is on the compensation committee, we should start to see progress in this area.   

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