Seriously something is wrong here. I spent some time digesting...

Seriously something is wrong here. I spent some time digesting the annual report on weekend as attracted to the old adage about backing the guys which provide the shovels etc. But wow !! How in the world can they be valued at over $350-400M on top of a $457M netdebt at 9.25% interest locked in for the next 5 years, struggling to cover their interest bill and no money to replace or grow their fleet which by and the way is getting older by the day.

Couple of gems I found in the report

$447M (interest bearing) Debt against $349M of Equipment. Pg 43

Back in 2012/13, they had $1Billion of Equipment and did $61m EBIT to cover a $25M interest bill when mining was roaring. Also their fleet much 5 years younger then it is now so would produce a much higher EBIT margin. Now they have $349M of equipment (after the merger) and need to cover a $45M interest bill.

$35M of costs to do the merger. $77.9M of Goodwill out of Merger written off. Pg 80.

$14M legal and advisor costs then reversed that to ignore it and report Operating EBIT. $20M they capitalised. Also then paid Andys and Orionstone $77.9M of goodwill then immediately wrote it off ? Irrespective of how its accounted for still need to pay for it over the next X years.


A loan to own hedge fund (Black Diamond) owns 25% of the equity and 30+% of the debt. And the original owners of Andy and Orionstone are no where to be found in the top shareholders. Pg 134

Probably explains where the smart money has gone or is now positioned.