BLY - Boart Longyear Group

[Donga]

Yes and the debt issue is a race against time: GFC & mining recovery -> BLY SP recovery -> less pain to refinance is my simplistic view. Not sure what the dilution will do though expect to contribute in share offering when it comes. Was attracted to earlier low SP given their EPS in '07 & 08 and evident recovery for miners. I'm still learning though

 

[jbocker]

Well the capital raising has been announced yesterday. I confess to being somewhat uneducated in these matters, but the overall deal to me seems somewhat complex.
- An entitlement offer 1 for 1 @ 27c
- Unconditional Share Placement to Professional and Sophisticated investors (guess they are not talking to me!)
- Conditional Share Placement to Professional and Sophisticated investors (to be approved by share holders up to $15K limit).
All designed to pay off their debt. Tading halted till Thurs 20th and last traded at 44c.

In the scheme of things how does this rate amongst other capital raisings by other companys in recent times?? Is it complex or pretty standard.

I hold some of these (at 22.5c) having bought and sold in the days of ~$2 after the float.

 

[Donga]

Wish I knew My holdings also average 22.5c and will probably wait until the dust settles after a few days of people buying and selling for all sorts of reasons. Depending on how many you have and other opportunities, you might want to sell a few at some time to pay for your entitlement. Longer term expect this stock will have a multiplier effect, north or south, depending on how the recovery pans out, especially for miners. Of course DYOR and best of luck

 

[fureien]

wow sp seems to have tanked a bit too fast in my opinion

i bought in at 41.5 cents and was sitting happily when it was 44 cents

i didnt sell and its now 34 cents -_- this has happened to me one too many times the past 3 months

capital raising seems only beneficial for ppl who get in late after the announcement. they get to buyin at the sp after it tanks and avergae down further. whereas shareholders get screwed over.

now i have no choice but to take up the entitlement to average down.
does any1 have any idea when the settlement date is? its not that 24th septermber date is it. because thats way to damn long and risky to wait for your entitlement. sp might have tanked several times before then


also my broker is IB, i heard that i have to contact them to participate in capital raisings correct? Or will BLY send me a letter regardless?

 

[ausbronc]

Yeh this is my first ever capital raising experience and i bought in at 0.405c. If i want to see a profit in the futrue does that pretty much mean i have to take on the discount share price of 0.27c, or can i hold onto my shares at 0.405 and expect it to go back up in the future. as a rookie im only looking for some opinions on what to do so any advice would be great

 

[YELNATS]

capital raising seems only beneficial for ppl who get in late after the announcement. they get to buyin at the sp after it tanks and avergae down further. whereas shareholders get screwed over.

Don't know about that. Currently selling at 34c or above. You could sell at that price and use the funds to take up the 27c offer and make a 26% gain.

Assuming of course that you think the longer term sp will hold at 27c or above.

 

[fureien]

are you allowed to sell your holdings before you are allocated your entitlement?

the sp tanked another 8% today sigh. gmg sp went up instead of down why is this tanking so hard.

also how do i take up the entitlment offer anyway? as i mentioned i am with IB, i have to go through my broker as i wont be sent any documents correct?

 

[skc]

are you allowed to sell your holdings before you are allocated your entitlement?

the sp tanked another 8% today sigh. gmg sp went up instead of down why is this tanking so hard.

also how do i take up the entitlment offer anyway? as i mentioned i am with IB, i have to go through my broker as i wont be sent any documents correct?

Use the IB ticket system (login from their website) and inform them you want to participate in the BLY offer. Also ask them if you are able to sell your current holding yet. You won't be sent any documents through IB.

Note that the offer isn't officially open until tomorrow. Closing date 8 Sept, but you should leave a few days of buffer for IB to accept your instruction.

Also, you should notice on your IB statement that you now have something along the lines of BLYR which signifies the entitlement you own.

 

[YELNATS]

are you allowed to sell your holdings before you are allocated your entitlement?

What I meant was that you could sell your existing holdingsbefore you take up your new shares. Obviously you must have had an existing holding at close of business on August 17 to participate in the spp.

Note from the comapny's announcement,

Quote
The Company will ignore changes in shareholdings which occur after the commencement of the trading halt on 17 August 2009
Unquote

 

[ausbronc]

not a whole lot of incentive for taking up the 0.27c share offer now with today closing at 0.29c. what will happen if the market price drops below 0.27c? will they lower the discounted share or will it be a bust and no-one take up the offer?

also i am trading throuhg commsec. will BLY send me out a letter or will i have to contact commsec to find out how to take up the offer

 

[fureien]

argh good point. most likely bly will drop to 27c on monday. no point then.

i shudve exited earlier ...down 30% ><

i havent figured out how to set stop losses on IB's trader platform yet. its so complicated compared to etrade

i guess i have to ride this wave to the bottom and wait for it to go back up again


im sure the sp will recover again eventually. i havent been wrong yet when it comes to these things. just a frustrating waste of time tho

 

[Donga]

I shouldn't worry about BLY and expect it will will rebound nicely after the recapitalisastion once the traders have stopped shorting and the institutions start adding to their portfolio again. All this dependent upon China/mining not falling into a hole. As always DYOR but that debt overhang was killing them.

 

[ausbronc]

so what happens to the re-capitalisation process if no share holders take up the discounted share offer? is this bad for boart

or

does it not really have a negative effect on the whole capital raising process

 

[Donga]

Maybe wait until you get the paperwork and gauge then how BLY is travelling. For what its worth, BLY has been slowly recovering today from the earlier lows and buy/sell columns. Last week it was being heavily shorted and hopefully this will dry up before 27c is reached .

 

[YELNATS]

so what happens to the re-capitalisation process if no share holders take up the discounted share offer? is this bad for boart

or

does it not really have a negative effect on the whole capital raising process

The institutional and retail componts of the offer are fully underwritten. That means they are guaranteed to raise the full US$341 million they require.

As per BLY's announcement,

Quote

The Entitlement Offer has two components:
•
An institutional entitlement offer, where offers have been made to qualifying institutional shareholders for them to apply for their pro-rata entitlement to raise approximately US$184 million (A$219 million)(the “Institutional Entitlement Offer”).
•
A retail entitlement offer, where an offer will be made to qualifying retail shareholders for them to apply for their pro-rata entitlement to raise approximately US$157 million (A$187 million) (the “Retail Entitlement Offer”).

The Entitlement Offer is fully underwritten and will raise approximately US$341 million.

Unquote.

However, I would think they will be more successful on the institutional side of the offer compared to the retail side, though.

PS. I've had a great run with BLY, so currently I have sold down most of my holdings and am waiting to see if it will be worthwhile taking up the 27c offer.

 

[ausbronc]

Hey thanks for the help. im considering holding my shares at 0.405 and trying to average down and try to get a few more shares while the price is low. ill see how this goes but hopefully things will start to turn around soon

 

[fureien]

After considering the facts, ive decided that BLY should recover over the longer term (after this raising), ive concluded that despite buying at a ridiculously high price, im gunna stick with it a bit longer. Ive sent IB a ticket to take up the entitlement offer so i can average down a bit. It should put me at an average entry price of 35 cents, which i think is a target that the market should easily rally back up to. Fingers crossed that the SP holds above the 27cents price. If it doesnt ill just keep averaging down... Ive got plenty of spare capital anyway.

Ive been watching BLY for several months and kicked myself several times each time it broke out, so its about time i did something lol

 

[Ferret]

I'm also tempted to jump onto this with prices < 30c. All the other raisings I've watched lately have ended up with the share price well above the raising price once the dust has settled.

I also think a lot of risk goes out of BLY following this raising, and if the world economy continues to recover this company has plenty of blue sky.

 

[Barndat]

BLYR appeared in my IB portfolio today. Think I will wait a bit to see if they recover as the premium is only 0.5 cents on today's low (2.30 pm)

 

[jbocker]

BLYR appeared in my IB portfolio today. Think I will wait a bit to see if they recover as the premium is only 0.5 cents on today's low (2.30 pm)

I am going to wait too. I am not inspired buying in at the current price, could the market price go under 27c??
Nice the have the debt paid off, however does it mean loads more shares on the market, and has management given indication that it will manage its future debt better. Am I being harsh? I see this capital raising purely a bailout, I would feel much better if the raising was for some new expansion opportunity.