OptsyEagle Posted March 25, 2015 Share Posted March 25, 2015 Isn't Thurso the plant that Chad bought for $1. I think $300 Million might just be a little bit on the high side. He certainly created a lot of hype though. I suppose a valuation number like that is kind of like a lottery ticket. You know in your gut the numbers will not come in, but the greed inside us all makes us worry more about missing out if they did, then the reality of the real world. Kind of like Chad's $300 share price prediction a few years ago. No matter how hard I tried to remind myself that it was all Chad's hope and really no known substance, I found it very difficult to get it out of my mind. I think the stock passing back through $10 pretty much erased it, but until that point it kept ringing and ringing in my ear. This valuation price article is really the same thing. Don't bet on it. It may happen, but right now it is just hope. Link to comment Share on other sites More sharing options...
misterkrusty Posted March 25, 2015 Share Posted March 25, 2015 $300m for Thurso sounds a little high to me ... they've sunk about $320m of capex into Thurso since 2010, and this industry doesn't earn its cost of capital over time so I'd want a discount to invested capital That said ... it really hinges on your outlook for dissolving pulp prices. industries like this tend to overshoot in either direction, and when prices spike those animal spirits really kick-in in the executive suites (of potential acquirers) around 2010/2011 there was a huge spike in DP prices. this led to a huge supply increase which has been hitting the market for the past several years. 2015 will likely be the first year in a while that demand growth will outpace supply growth. 2016 will be a similar story, given the lead-time required to bring on new capacity and a limited number of projects in the pipeline. Looking further out to 2017+ , the cost per tonne to add new capacity may go up significantly since there are only so many old pulp mills that are suitable for conversion to DP and this recent wave of supply used up most of those suitable mills (or so I've read). it's a lot more expensive to build from scratch. The ~4-10x upside on the equity is probably sufficient compensation for the risk... but I like lay-ups, thus my only exposure at this point is the 2016 debentures. Link to comment Share on other sites More sharing options...
sculpin Posted April 2, 2015 Share Posted April 2, 2015 I believe Fortress is missing a great opportunity to purchase a good size proportion of their outstanding debentures at sizeable discounts to face value. Currently the 2016's are trading at $65 and the 2019's are at $40. Below Alpha Natural bought back $593MM for $331 million by issuing another debt product and with cash on hand. They will also save an additional $21 million in interest costs. FTP could use a combination of debt on Landquart (or sale & leaseback proceeds) and cash on hand to carry out a similar manoeuvre. Alpha Natural Resources Announces Repurchase of $593 Million Unsecured Notes and Issuance of $214 Million Senior Secured Second Lien Notes BRISTOL, Va., April 1, 2015 /PRNewswire/ -- Alpha Natural Resources, Inc. (ANR) ("Alpha"), a leading U.S. coal supplier, today announced that it has completed the repurchase of an aggregate of approximately $593 million in principal amount of its unsecured notes, including $82 million principal amount of its 3.75% convertible notes due 2017, $108 million principal amount of its 9.75% senior notes due 2018, $220 million principal amount of its 6.00% senior notes due 2019, $68 million principal amount of its 4.875% convertible notes due 2020 and $115 million principal amount of its 6.25% senior notes due 2021, in separate privately negotiated transactions with investors. Alpha funded the aggregate repurchase price of approximately $331 million for the unsecured notes through a combination of proceeds from the issuance of $214 million principal amount of 7.50% senior secured second lien notes due 2020 (Series B) (the "Series B Notes") and $117 million of cash on hand. The repurchase of the unsecured notes and issuance of new Series B Notes results in a reduction in Alpha's consolidated net indebtedness of approximately $379 million, and reduces Alpha's anticipated annual cash paid for interest by approximately $21 million. As a result of the transactions, Alpha is revising its guidance for 2015 cash paid for interest from a range of $245-$255 million to a range of $230-$240 million. Philip J. Cavatoni, Alpha's Executive Vice President & Chief Financial and Strategy Officer, said, "The transactions announced today illustrate Alpha's continuing ability to take advantage of opportunities in the financial markets to proactively strengthen the company's balance sheet. We were able to achieve a meaningful deleveraging of our balance sheet while reducing cash interest payments. These steps increase our financial flexibility as we continue to manage through ongoing challenges in the domestic and international coal markets." The newly issued Series B Notes have the same terms as Alpha's 7.50% senior secured second lien notes due 2020 that were issued on May 20, 2014, but constitute a new series of notes issued under a separate indenture and CUSIP and will vote as a separate class on all matters that require action of the noteholders. The Series B Notes are guaranteed by each of Alpha's current and future wholly-owned domestic subsidiaries that guarantee Alpha's obligations under Alpha's credit agreement. The Series B Notes and the guarantees are secured by second priority liens on the same collateral securing on a first priority lien basis indebtedness incurred under the credit agreement, and will consist of substantially all of Alpha's assets and the assets of Alpha's subsidiary guarantors. Link to comment Share on other sites More sharing options...
lessthaniv Posted April 3, 2015 Share Posted April 3, 2015 The sale and lease back thought makes a ton of sense if they can structure a deal. Looking at the VSF markets especially in China, leaves me with with the thought that DP markets have a ways to go before stabilizing. But no doubt the 2016's at a minimum could be addressed sooner than later. The company seems to suggest that the VSF market bottomed last year. Hopefully their forecast is correct. The viscose staple fibre and rayon filament markets, which are key drivers in dissolving pulp demand, reached a bottom in the second quarter of 2014, and since such time capacity utilization has improved. The third quarter of 2014 saw dissolving pulp reach its lowest prices since May 2009, but over the past few weeks these prices have stabilized. Management believes dissolving pulp prices will improve in 2015 as a large proportion of dissolving pulp producers are currently operating at a loss. Management has completed a thorough review of the dissolving pulp supply and demand environment and has forecast capacity utilization in the dissolving pulp industry will reach 94% in 2015 and continue to increase in subsequent years as global growth in demand for dissolving pulp outpaces growth in supply. Management believes once utilization rates exceed 90%, pricing power will return to dissolving pulp producers. Link to comment Share on other sites More sharing options...
sculpin Posted April 6, 2015 Share Posted April 6, 2015 Hopefully Chad is thinking (or acting upon) about hedging the Canadian dollar imminently to lock in the currency advantage that Thurso now enjoys. Oil is starting to rebound & the CAD is now at 1.2474. Hopefully someone he knows is reading this board and will tell him that the value of his equity could very well ride on him locking in the currency for a few years. Link to comment Share on other sites More sharing options...
alertmeipp Posted April 6, 2015 Share Posted April 6, 2015 Hopefully Chad is thinking (or acting upon) about hedging the Canadian dollar imminently to lock in the currency advantage that Thurso now enjoys. Oil is starting to rebound & the CAD is now at 1.2474. Hopefully someone he knows is reading this board and will tell him that the value of his equity could very well ride on him locking in the currency for a few years. Not sure if he should rush. Link to comment Share on other sites More sharing options...
misterkrusty Posted April 7, 2015 Share Posted April 7, 2015 Hopefully someone he knows is reading this board and will tell him that the value of his equity could very well ride on him locking in the currency for a few years. I did tell him that, but it was over dinner and after so many beers that I'm not sure he remembers Link to comment Share on other sites More sharing options...
Libs Posted April 8, 2015 Share Posted April 8, 2015 Article on Fortress: http://business.financialpost.com/2015/03/09/long-road-back-from-disaster-how-one-bad-investment-nearly-destroyed-forest-paper-ltd/ Interesting thread, thanks every one. This gives me pause: <Meanwhile, the CEO’s attention has started to wander. “I am finding new interesting investment opportunities in technology in the U.S.,” he says, including optimizing the efficiency of lithium batteries in iPads and cell phones and trying to improve the efficiency of solar panels.> Link to comment Share on other sites More sharing options...
sculpin Posted April 8, 2015 Share Posted April 8, 2015 I guess the only positive to take out of the fact that Chad says he is finding interesting investment opportunities in lithium & solar is that he will have to monetize something very large within Fortress Paper (sale of all of Thurso, Landquart etc). Accomplishing this, he would need to pay off the IQ debt and I would think the 2016 debenture before he had sufficient funds to make a sizable investment in these other sectors. Link to comment Share on other sites More sharing options...
alertmeipp Posted April 9, 2015 Share Posted April 9, 2015 I guess the only positive to take out of the fact that Chad says he is finding interesting investment opportunities in lithium & solar is that he will have to monetize something very large within Fortress Paper (sale of all of Thurso, Landquart etc). Accomplishing this, he would need to pay off the IQ debt and I would think the 2016 debenture before he had sufficient funds to make a sizable investment in these other sectors. Are u sure he is investing thru FTP? Link to comment Share on other sites More sharing options...
sculpin Posted April 17, 2015 Share Posted April 17, 2015 Cdn/US $ now at $1.21 from the $1.25/27 level of last few months. Negative for an unhedged Thurso. Is the dollar bull run over? Apr 17, 2015 : The dollar bull run of the past year is reaching an end, according to long-term dollar bull David Bloom, head of foreign exchange strategy at HSBC. He explains why to Long View columnist John Authers. http://video.ft.com/4176714561001/Is-the-dollar-bull-run-over-/Markets Link to comment Share on other sites More sharing options...
lessthaniv Posted April 23, 2015 Share Posted April 23, 2015 Some positive comments on the VSF markets. Inventories falling and utilization around 80% now. Seems like some of the slack is coming out of that market. http://en.xinfinance.com/html/Industries/Energy/2015/82556.shtml http://www.fibre2fashion.com/textile-market-watch/viscose-staple-fibre-vsf-price-trends-industry-reports.asp Link to comment Share on other sites More sharing options...
sculpin Posted April 27, 2015 Share Posted April 27, 2015 http://www.valuewalk.com/2015/04/snyder-brown-capital-returns/99999/ On the positive side of things, our Fortress Paper Debentures rebounded to near our cost basis in the first quarter, making the largest positive contribution to performance. Despite the fact that this fixed income investment still trades at just 65 cents on the dollar, we continue to believe these debentures are “money good” and that we will receive our principal in full in December 2016. When we first purchased this investment, it seemed that some sort of restructuring was all but inevitable (an outcome we were comfortable with due to the asset value, cash position, and our position as the first maturity to come due). However, the falling Canadian Dollar and continued operational improvements have moved the company into a positive operating cash flow position. On the year-end conference call last month, the Chairman and CEO stated: “the debt burden is quite manageable … we are currently forecasting internally that we will make it through all our debt commitments.” This is a tremendous improvement from last year, and we believe that absent some dereliction of duty by the board of directors our debentures will be repaid in full. This represents a gain of 65% from the current price, which would contribute roughly 24 percentage points to the gross performance of the partnership, due to our large position size. Link to comment Share on other sites More sharing options...
sculpin Posted May 11, 2015 Share Posted May 11, 2015 http://seekingalpha.com/article/3160456-fortress-papers-ftplf-ceo-chad-wasilenkoff-on-q1-2015-results-earnings-call-transcript?page=1 Link to comment Share on other sites More sharing options...
triedtestedand Posted May 11, 2015 Share Posted May 11, 2015 Details here: http://fortresspaper.com/images/pdfs/financials/Q1-2015%20MDA%20and%20Financials%20Combined.pdf One interesting point not elaborated upon in the conference call notes is the DP segment sales price realized ($CDN/ADMT). They sold ~39K ADMT of DP in the quarter, and they booked revenue of ~$37M CDN. That's ~$948CDN/ADMT. Not sure the details of what's included/excluded ... but big picture a pretty good mitigation of 13% chinese duties IMHO, based on an estimate of $1006/CDN/ADMT for commodity DP in the quarter (this # itself based on a $805USD/ton estimate of DP price in the quarter, and an 80 cent CDN/USD dollar translation). Link to comment Share on other sites More sharing options...
triedtestedand Posted May 11, 2015 Share Posted May 11, 2015 My bad on my last remarks ... forgot that $37M in DP segment revenues includes the $3.4M in cogen sales ... BUT also forgot that DP segment revenues exclude shipping/commissions ... so bit of a wash actually (two offsetting wrongs). Link to comment Share on other sites More sharing options...
Josh4580 Posted May 12, 2015 Share Posted May 12, 2015 up 28% today any rumors or reasons why? Link to comment Share on other sites More sharing options...
wachtwoord Posted May 12, 2015 Share Posted May 12, 2015 up 28% today any rumors or reasons why? Zerohedge has an opinion: http://www.zerohedge.com/news/2015-05-12/companys-42-surge-past-week-confirmation-grexit-imminent Link to comment Share on other sites More sharing options...
lessthaniv Posted May 12, 2015 Share Posted May 12, 2015 I believe the market expected (based on past guidance) that the Q1 numbers were going to be blurred due to downtime, lower cogen , etc ... Now that Q1 is behind the company the market is forward looking to some improved numbers in Q2. Cogen is up and running now and us/can exchange rate will be more meaningful in the Q2 numbers. I'm also am seeing some signs of a slowly improving VSF market. So, all in all, I suspect the worst (dare I say it?) is perhaps behind this company. Volatility due to tight floats works both ways. When investors want out, the stock can be volatile to the downside. When investors want in, the stock can be volatile to the upside. Link to comment Share on other sites More sharing options...
jose Posted May 12, 2015 Share Posted May 12, 2015 Perhaps scene 3 of 4 of Phil Fisher's new factory parable? We'll see! (says the long-suffering long) Link to comment Share on other sites More sharing options...
Liberty Posted May 12, 2015 Author Share Posted May 12, 2015 Lightning will strike Thurso and Landquart simultaneously any moment now. Link to comment Share on other sites More sharing options...
jose Posted May 12, 2015 Share Posted May 12, 2015 Lightning will strike Thurso and Landquart simultaneously any moment now. Hahaha. And DP price will head down to 500. Followed by a Canadian self-imposed tariff on all exports. Link to comment Share on other sites More sharing options...
lessthaniv Posted May 12, 2015 Share Posted May 12, 2015 http://www.bloomberg.com/news/articles/2015-05-12/fortress-paper-rises-on-report-of-contract-to-print-greek-notes Link to comment Share on other sites More sharing options...
triedtestedand Posted May 12, 2015 Share Posted May 12, 2015 Liberty ... welcome back. Zerohedge ... while premise of GREXIT may be a speculative reason to buy ... their correlation of it against 2012 "material banknote order re-instatement" at height of recent Euro woes is flawed ... that order was for govt of India. Also, if you check out their Q1 results by geography (2nd last page of quarterly financials), 88% of orders were in Asia ... so not too many Euros/Drachmas (or Swiss Francs for that matter) were accounted for in the most recent quarter Link to comment Share on other sites More sharing options...
jose Posted May 12, 2015 Share Posted May 12, 2015 I took the zerohedge article to be (mostly) a speculative joke. Perhaps not. I wonder if the "report" the bloomberg article alludes to is just the zero hedge one. We'll see. Link to comment Share on other sites More sharing options...
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