Pellet Price, page-150

It is always with fear and trepidation when one invests with a Chinese controlling shareholder and there are justifiable reasons for that. However we need to look a bit more closely at Shagang Group and give a few statistics to maybe ease that fear. Firstly they are a privately held Company in China with some 30,000 employees and are currently ranked as a Fortune Top500 Company. As part of a diversification plan to complement their very substantial steel business, in 2016 they acquired London-based international data centre, Global Switch Holdings for UKP 2.4billion and then in Jun17 bought two internet data firms for $US3.8billion.
I think we can immediately dismiss any ideas about them trying to suppress the share price of GRR when we have a market capitalisation of just $A250mil as I think they will be able to buy us out at fair value if it ever comes to that and they do already have a 47% shareholding - honestly it would be just scraps for them.
I agree with the sentiments expressed about laying out CapEx requirements in dollar terms for at least a year in advance and for some sort of firm dividend plan such as 40% of EBITDA. I do note that Equity at 30Jun17 comprised of Contributed equity of $331.5mil plus Retained profits of $9.6mil for Total Equity of $341.1mil - I believe you can only pay dividends out of Retained profits so they have had an excuse in not paying out dividends in large amounts to date but this Retained profits account should increase to approx. $75mil at 31Dec17 giving heaps of room to pay a decent dividend.
Due to the volatility of the iron ore price and the pellet premium pricing, I am in favour of a positive cash balance and don't believe we should have debt to finance the business. Yes that makes for a lazy Balance Sheet but offers some balance when we can't effectively hedge our pricing.
If Southdown happens then we'll find out the detail at that point in time - not much use at this stage in speculating on any particular Corporate vehicle or IPO or otherwise as that is wasted effort as it will be a process in which we will have no say.
Just my 50c worth!