Asf,If you could get the whole company for nil it would still be...

Asf,
If you could get the whole company for nil it would still be a bad buy.

The business comprises four parts;

a)The quarry mines limestone for the factory with some additional third party sales of overburden. Without the bulk sales to the factory cros ssubsidising the operating costs the quarry would be marginal. I don't think Penrice has money set aside for rehabiliting the quarry which has been in operation for about 70 years.
When the Soda Ash plant closes it is finished.

b)The bicarb plant relies on the Soda Ash plant to provide its process streams.
When the Soda Ash plant closes it is finished.

c)The Soda Ash plant is the heart of the operation. It is worn out. Built by ICI at the start of WW2 with machinery of that era. ICI left it in the 90s, since then a succession of owners have sarved it of maintenance expenditure to keep pace with it wearing out. It is just limping along.
It uses the Solvay process which is a huge consumer of energy in the form of steam, electricity and coke. It is exactly the type of industry that the Carbon Tax is designed to close down.
The rehabilitation costs of the site may well exceed its land value.

d)The recently developed salt extraction process which is at pilot plant stage. This looks promising but will require capital to develop.

So its a dead duck operationally. Against this it has some administrative problems;
1)Being cash flow negative it can't meet its interest payments on the $100m outstanding. These will be compounding.
2)I think it has the remnant liability of a couple of defined benefit super schemes.
3)The staff must be starting to wonder how it would be able to meet its redundancy liablity.
4)Good staff will start wandering off.

Shareholders who have a need for their money might consider taking what they can while the going is good.

bacci