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Container ships charterer with 170+ years history

Hulumas
Supreme

23-Mar-2010 11:49

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I am sorry to know that. Is it a S-chip counter?

commando ( Date: 23-Mar-2010 11:46) Posted:

lost 13k!!!!!!!!!!!!! omg....heart pain....all my profit gone!!!!!!!!!!!!!!!!!!!

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commando
Veteran

23-Mar-2010 11:46

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lost 13k!!!!!!!!!!!!! omg....heart pain....all my profit gone!!!!!!!!!!!!!!!!!!!

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lawcheemeng
Master

23-Mar-2010 11:19

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hehehe...share share only lah..........hope everyone don't lose $....hope every one Haut... ah.....hehehe.........

knightrider ( Date: 23-Mar-2010 11:10) Posted:

Anyway, thks for your reminder !

lawcheemeng ( Date: 23-Mar-2010 10:44) Posted:

dear knightrider...we have been in this forum.....quite long liao lah...hehehe......can said 'laojiao' i do not make call too buy sell or hold....as every body risk level is not same mah.....hehehe........and that article is just a click n paste...hehehe....my english and anaylse not so deep lah......so just a gentle reminder cheap is never cheap loh...hehehe.......

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Hulumas
Supreme

23-Mar-2010 11:17

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CLEAR ALL AND AVOID it could be the best choice, not until an uncertain bad signal is faded and non existence anymore!

commando ( Date: 23-Mar-2010 10:01) Posted:

even at a lost? the parent company will help????????

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knightrider
Elite

23-Mar-2010 11:10

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Anyway, thks for your reminder !

lawcheemeng ( Date: 23-Mar-2010 10:44) Posted:

knightrider ( Date: 23-Mar-2010 10:38) Posted:

The lawcheemeng comment, " Very deep water la" - Just one simple word - "Can buy" or "Can sell" or "can hold" or even "can short" will make it much easy to"ming pai" !

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Alligator
Veteran

23-Mar-2010 10:48

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yalor, so often to see:

1. Cheap could become cheaper

2. Expensive could become even more expensive

3. cannot just decide based on ONE indicators like just PE, just DPU/yield, just NAV, etc, some cheongsters had PE way about market average!! some stayed at single digit for as long as i remembered

so,, entry price and exit price do matter.

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Hulumas
Supreme

23-Mar-2010 10:46

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Simple but is it dependable?

knightrider ( Date: 23-Mar-2010 10:38) Posted:

The lawcheemeng comment, " Very deep water la" - Just one simple word - "Can buy" or "Can sell" or "can hold" or even "can short" will make it much easy to"ming pai" !

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lawcheemeng
Master

23-Mar-2010 10:44

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knightrider ( Date: 23-Mar-2010 10:38) Posted:

The lawcheemeng comment, " Very deep water la" - Just one simple word - "Can buy" or "Can sell" or "can hold" or even "can short" will make it much easy to"ming pai" !

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knightrider
Elite

23-Mar-2010 10:38

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The lawcheemeng comment, " Very deep water la" - Just one simple word - "Can buy" or "Can sell" or "can hold" or even "can short" will make it much easy to"ming pai" !

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Hulumas
Supreme

23-Mar-2010 10:38

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No, it is US treasury bond perhaps. Ha. ha.. ha...

ROI25per ( Date: 23-Mar-2010 10:29) Posted:

so if business cant stand high leverage, dun do it.

1 company that can withstand high leverage is STARHUB

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ROI25per
Master

23-Mar-2010 10:32

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good reminder

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lawcheemeng
Master

23-Mar-2010 10:31

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read again for those still intend to go in....for those still vested .....good luck.....for those who lost a chunk like me and sold off....there are lots of chances to get it back......i was glad i move to others a few months back.......but a bit sad too see so many still stuck there.......good luck to all.

matthewsoh ( Date: 24-Aug-2009 09:33) Posted:

I quoted this from the other forum.

"Mr_X wrote:

Long time forumers may remember a piece I wrote on Frasers Commercial Trust’s recapitalization exercise a month back. Back then, I articulated my thoughts to bring some sense of balance to what I felt was an overly pessimistic view of the exercise. In the commentary, I urged readers to adopt a neutral stance and to avoid the knee jerk reaction of lambasting F&N due to certain perceived injustices around the deal.

Recent events at Rickmers have once again prompted me to comment on their FY09Q2 massive DPU cut. The difference this time round though, is I feel many fellow investors are underestimating the severity of the challenges facing Rickmers and being far too optimistic to what management has to say. I’ve seen their CEO (Hensen) and CFO (Ban Huat) in action before. Pretty charming fellows, but that’s no substitute for solid business performance.

Quite a number of Rickmers investors think that this DPU cut is just a temporary measure to conserve cash and the tide will turn when the economy shows recovery. I don’t think so. In fact, the trust is pretty much screwed short of a massive bailout by either the sponsor or a strategic investor. The DPU cut is no business prudence; it is in fact the symptom of an unsustainable business model and the lack of prudence that led to bad decisions made in the past.

The key issues facing Rickmers are:
1. Loan to value covenants under existing financing terms
2. Expiry of US$130million facility
3. US$711 million committed expenditure
4. Shortfall in funding for remaining ~US$200 million Hanjin ships
5. Redelivery of Maersk Djibouti

All issues except the last are financing problems. These are not exactly big revelations; management to their credit is candid in sharing them with the investment community. But what I think is missing among many retail investors is the sense of urgency, appreciation of the severity and an understanding on what these challenges really mean for the next 5 years.

Let’s start off with the most pressing issue, the expiry of US$130million facility in 8 months’ time. Considering that the collaterals, i.e. container ships, have had at least half of their values shaved off since the good old days, it’s highly doubtful if the banks will allow a full debt rollover. Even if such a thing is possible, the terms would be detrimental to unitholders. Rickmers’ current loan terms are somewhere 90 to 120bps above LIBOR. There is no way that they are getting back those terms, my best guess will be somewhere in the region of 250 to 350bps margin attached with some stringent cash lock covenant.

Then comes the ever elusive discussion with bankers on the waiver of LTV covenants. Will a waiver be granted? Almost for sure, though not because the bankers are Mother Theresa material. They don’t really have a choice. Creditors stand to loose out if they force an asset firesale due to depressed box ship value, the best chance they have is milking the trust and its charter revenue for all it is worth. Like all things in life, a waiver does not come free of charge. The likely price would be a combination of once-off payment for “waiver fees”, massive increase in debt margins, debt amortization and cash lock covenants.

LTV waivers have bearing on the credit facility available for funding the remaining Hanjin ships. Management has indicated that existing facilities amount to US$170million, leaving a shortfall of US$30million in funding. Under a LTV waiver, credit capacity is bound to be reduced. The shortfall is potentially somewhere in the region of US$60million. Management intends to top up any of such shortfall with internal cash, but that of course wipes out 75% of their cash reserves (currently US$80million).

The most serious of all challenges no doubt lies in its US$711million capital expenditure for 4 super size 13,100 TEU newbuilding. Short of a bailout or sale & leaseback, the only viable solution is a combination of debt and equity. With depressed ship values, debt funding is unlikely to exceed 50%. That leaves around US$360million equity needed. Current market capitalization is around US$135million.

Considering the poor metrics of the trust, any rights issue will need to be at least 40% below market price in order for underwriting to be arranged. That brings us to around US$81million possible for every 1:1 rights raised. Considering that the trust needs US$360million equity, a 5 rights for every 1 existing unit exercise is probable. I don’t think the dilution impact from such an exercise needs further elaboration. Such a high cost of equity and unfavorable debt markets ensure that these large acquisitions are most certainly going to be DPU destructive rather than accretive.

The redelivery of Maersk Djibouti though no serious challenge, is an unwelcome distraction in this climate. My understanding is that the current charter rate of US$22,000 / day is likely to fall to around US$9,000 / day, a 60% reduction. Cetris paribus, that translates to a DPU reduction of 0.75 cents per annum.

In summary, barring any unforeseen circumstances, the next 12 months will likely see a highly dilutive equity raising either through rights issue and/or private placement, significant increase in financing cost, some form of debt amortization program together with cash lock arrangements. Considering the massive debt load of the trust, it is my belief that distributions are likely to be suspended or maintained at some token amount no more than US$5million per quarter (~diluted quarterly DPU of 0.15cents).

I urge caution in bargain hunting based on simple yield calculation of the existing 0.6cents DPU, good operating performance or a good brand name. Ultimately, an annuity-like trust is bought for stable and meaningful DPU, not some esoteric operating performance or brand name. Assuming that Rickmers obtains the necessary capital to function as a going concern, chances are the trust will not be making any meaningful distributions for the next 3 to 5 years depending on the trajectory of an economic recovery."

More than meets the eye .. wont dare to hunt for cheap stuff

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ROI25per
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23-Mar-2010 10:29

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so if business cant stand high leverage, dun do it.

1 company that can withstand high leverage is STARHUB

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ongph88
Member

23-Mar-2010 10:28

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what u think abt gold investment, one biz assoc trying to sell ? take real gold and keep, collect monthly return 1.5% for 6 months ! safe ? risk is future gold price and return of 1.5% is too little. I rather invest in stocks.

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knightrider
Elite

23-Mar-2010 10:25

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If the parant Company, did not stretch a helping hand, it could be like FerroChina. End up ZERO. Cannot short hor, wait kana suspension !!!

pharoah88 ( Date: 23-Mar-2010 10:15) Posted:

nO NAV ????

can gO as lOw as market wants

HiGH RiSK Of sUspensiOn.

Rickmers

Symbol:
B1ZU

Currency:
Singapore Dollar

Last:

0.315

-0.095

Vol (K): 11268.0

Trading
Updated Time	23-Mar 09:50
Open	0.3	High	0.34	Low	0.265
Prev Close	0.41	Buy	-	Sell	-
Volume(K)	11268.0	Buy Vol(K)	-	Sell Vol(K)	-
52 Wk High	0.64	52 Wk Low	0.325	52 Wk Avg Vol	1294.233
All Time High	1.72	All Time Low	0.32
Comments	No Info

*Technical Analysis Information is updated Daily

Technicals
RSI	60.85	Williams %R	-28.57
Comments (RSI)	No Info	Comments (W%R)	No Info

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ROI25per
Master

23-Mar-2010 10:23

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if u cant service tis loan , ur condo will be auctioned off @ fire price and thus will eat into ur equity

NAV =394,577,000/423,675,000 =US0.93

ROI25per ( Date: 23-Mar-2010 09:44) Posted:

Asset = US$1,264,595,000 ;Equity = US$394,577,000

A good analogy is

U have a 4-room HDB flat fully paid @ S$394, 577 and u get a 100% loan of S$870,018 to buy a 2/3 room condo. so can my condo rental covers my loan interest and installment?

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knightrider
Elite

23-Mar-2010 10:20

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Hey, this is a VERY GOOD explanation ! I like it, it is so clear and easy to UNDERSTAND ! Thks.

ROI25per ( Date: 23-Mar-2010 09:44) Posted:

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pharoah88
Supreme

23-Mar-2010 10:18

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their SHiPs were bUilt at PEAK PRiCES ????

NEW SHiP PRiCES are at HALF-PRiCE nOw

Pacific Shipping Trust is iN gOOd pOsitiOn tO bUild nEw SHiPS at HALF-PRiCE nOw.

ROI25per ( Date: 23-Mar-2010 09:44) Posted:

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hotokee
Veteran

23-Mar-2010 10:18

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For those with holdings, nobody can decide for them, but for newbies the bad news is the auditors in short tells us the company is unable to meet debt when it falls due. CE: BOSAYOR.

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pharoah88
Supreme

23-Mar-2010 10:15

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nO NAV ????

can gO as lOw as market wants

HiGH RiSK Of sUspensiOn.

Rickmers

Symbol:
B1ZU

Currency:
Singapore Dollar

Last:

0.315

-0.095

Vol (K): 11268.0

Trading
Updated Time	23-Mar 09:50
Open	0.3	High	0.34	Low	0.265
Prev Close	0.41	Buy	-	Sell	-
Volume(K)	11268.0	Buy Vol(K)	-	Sell Vol(K)	-
52 Wk High	0.64	52 Wk Low	0.325	52 Wk Avg Vol	1294.233
All Time High	1.72	All Time Low	0.32
Comments	No Info

*Technical Analysis Information is updated Daily

Technicals
RSI	60.85	Williams %R	-28.57
Comments (RSI)	No Info	Comments (W%R)	No Info

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