BLY - Boart Longyear Group

[skc]

ASL reports tomorrow and is smacked down today (I was surprised it didn't go down more yesterday)... it takes a brave soul to hold this into tomorrow's report that's for sure.

Actually ASL reported today and things aren't nearly as dire as BLY's painted. Share price up a casual 17%.

It would have taken a brave soul to went in to the report, long or short.

 

[odds-on]

Actually ASL reported today and things aren't nearly as dire as BLY's painted. Share price up a casual 17%.

It would have taken a brave soul to went in to the report, long or short.

I have been holding ASL since taking a position in May (1.55)...does that make me brave or just plain stupid?

Will have a read of the results over the next couple of days and make a decision - but if it is able to pay a dividend, life cannot be too bad. I reckon it will end up trading at tangible book.

 

[skc]

I have been holding ASL since taking a position in May (1.55)...does that make me brave or just plain stupid?

May be lazy?

Will have a read of the results over the next couple of days and make a decision - but if it is able to pay a dividend, life cannot be too bad. I reckon it will end up trading at tangible book.

What's NTA? Iress is saying 63c which I assume is not your price target!

 

[McLovin]

What's NTA? Iress is saying 63c which I assume is not your price target!

Is that assets/share or price to assets??

 

[skc]

Is that assets/share or price to assets??

Need to get my brain fixed. Lol.

I've only used that Iress information a few thousand times.

 

[VSntchr]

I am out as of yesterday result ..thing turn for the worse with balance sheet gone - take a loss not a big one as I manage to trade in and out for a while for profit so my average probably be around 55-60c and I got out at 52c

Money gone to AHZ because this thing look better by the day in 2 years it should generate decent profit and start growing ....

Good move there ROE, AHZ breaking out of consolidation this morning while Boart releases a shocker. Avg rev. per month in December looking very shakey in the presentation. Things are looking far worse than the 2009 low. There is really no optimism in the report and the only positive to be taken away is that the company does have some substantial assets that could be sold. Equity now only ~$450m after this years massive loss...

 

[skc]

Good move there ROE, AHZ breaking out of consolidation this morning while Boart releases a shocker. Avg rev. per month in December looking very shakey in the presentation. Things are looking far worse than the 2009 low. There is really no optimism in the report and the only positive to be taken away is that the company does have some substantial assets that could be sold. Equity now only ~$450m after this years massive loss...

Yes it's a pretty bleak presentation. In this market, who are they going to sell the assets to? The equity is book value and it's only a write down away from being wiped out.

The fact that they feel the need to mention time and again that they are a 120 year old company... you'd think they know by now that they are in a cyclical business so you should be more prudent with your gearing level in case when things go bad!

Which brings us to a philosophical (or perhaps statistical) question. Is a 120 year old company more or less likely to survive the following year comapred to just any company over 10 years old? Does the long history mean that statistics / freak event or whatever will soon catch up with tem?

 

[McLovin]

Which brings us to a philosophical (or perhaps statistical) question. Is a 120 year old company more or less likely to survive the following year comapred to just any company over 10 years old? Does the long history mean that statistics / freak event or whatever will soon catch up with tem?

Is that like asking if a coin is flipped 120 times and goes heads every time then it has a greater than 50% chance of going tails on the 121st flip?

It would be a brave person who would step into mining services at the moment, IMO. If history has taught me one thing, it's that booms and busts can persist for far longer than you think they will. And this was a massive boom.

 

[VSntchr]

In this market, who are they going to sell the assets to?

My thinking exactly.
They talk about pricing pressures due to increased competition which is a result of alot of companies having lower than average utilisation rates...
So until competitors start seeing utilisation improve - who would want to buy the assets?
Perhaps there is some assets which can be used by other companies, e.g. not all assets are drilling specific. But even then, the demand for all things mining service isn't exactly substantiating a thriving market.

 

[tradernor]

BLY - Time frame for the Reversal of the Sector

BLY's stock has plunged primarily because of the weak sector. What is your opinion about the timeframe in terms of the reversal of the sector? How long will it take until the sector reverses? thanks.

 

[ROE]

Re: BLY - Time frame for the Reversal of the Sector

BLY's stock has plunged primarily because of the weak sector. What is your opinion about the timeframe in terms of the reversal of the sector? How long will it take until the sector reverses? thanks.

it is not just weak sector this business has balance sheet issue ... it has a decent chance of getting massive dilution or going belly up..

 

[tradernor]

Re: BLY - Time frame for the Reversal of the Sector

it is not just weak sector this business has balance sheet issue ... it has a decent chance of getting massive dilution or going belly up..

Yes, I agree. The balance sheet has also problems. It is weak because the debt to cash flow ratio is too high. I think the lenders will convert into shares by 2015.

 

[tradernor]

Do you know why BLY is listed in Australia although it is a US company?

 

[skc]

I am out as of yesterday result ..thing turn for the worse with balance sheet gone - take a loss not a big one as I manage to trade in and out for a while for profit so my average probably be around 55-60c and I got out at 52c

Things are not looking good for BLY. These snippets from Dow Jones Newswires. I wonder if the company willl offer any response tomorrow.

SYDNEY- Boart Longyear Ltd., the world's largest supplier of drill rigs to the mining sector, has begun talks with specialist restructuring advisers to avoid bankruptcy as demand for equipment from global resources companies plummets, three people familiar with the matter said.

Utah-based Boart has been seeking to sell assets or raise capital since February, when it appointed Goldman Sachs to carry out a strategic review in the wake of widening losses and high debts. Now, Boart has begun working with a different set of advisers-the Australian restructuring group at law firm Ashurst, and insolvency practitioners KordaMentha-which specialize in radical measures to save companies from financial collapse, the people said.

... Despite the cutbacks, Boart has struggled to manage debts of around US$600 million. In recent months, the company has twice negotiated with lenders to relax financial covenants and replace restrictive bank loans with long-dated high-yield notes. But with demand for drilling equipment showing little sign of recovery, Boart appears to be running out of options to repair its balance sheet. Boart's unsecured notes due in 2021 are now trading at only 72%-73% of their face value, and bondholders are nervous. Ares Management L.P., a Los Angeles-based fund which has become Boart's largest lender, recently appointed Australian law firm Arnold Bloch Leibler to represent its interest in any future restructuring of the firm, a person familiar with the matter
said. Such a restructuring could include lenders exchanging debt for equity in the business, although no decisions have been taken.

BLY's stock has plunged primarily because of the weak sector. What is your opinion about the timeframe in terms of the reversal of the sector? How long will it take until the sector reverses? thanks.

The question is, when BLY folds, is ASL a buy or sell?

 

[ceasar73]

BLY major share holder is dumping shares, hence the large price drop. Does anyone here thing Boart will survive??
If YES, then now is surely a great time to buy...
thanks

 

[skc]

BLY major share holder is dumping shares, hence the large price drop. Does anyone here thing Boart will survive??
If YES, then now is surely a great time to buy...
thanks

A bit late to be selling now?! They still have some 70m shares.

FWIW, I don't think BLY will survive in it's current form. It will most likely be recapitalised in a debt-for-equity swap. The debt is already trading at 25% discount to face value so it's hard to see any equity value left.

Then again, from memory Billabong's debt traded below face value as well and yet equity holders were not wiped out.

Down 30% as we speak.

 

[McLovin]

You don't bring in KordaMentha just for a chat. I reckon they'll be done in the next week.

 

[skc]

You don't bring in KordaMentha just for a chat. I reckon they'll be done in the next week.

BLY major share holder is dumping shares, hence the large price drop. Does anyone here thing Boart will survive??
If YES, then now is surely a great time to buy...
thanks

And what do I know. It's gone from historical low of 8.8c 2 days ago to 21 cents at the close today.

Sign of life or terminal lucidity?



This is PLA's almighty spike before it went to corporate heaven. There probably was a corporate activity rumour in the background somewhere.

 

[goccipgp]

Looks like a breakout at 0.25 with a short term target of 0.292, according to au stoxline.

 

[shoegaze]

What do you guys take out of the announcements on monday?