FGE - Forge Group

[skc]

FGE have gained nearly 20% today. I wonder why the sudden rise?

News that their data room has attracted plenty of interest...

http://au.news.yahoo.com/thewest/business/wa/a/21314995/wa-firms-cast-eyes-over-forge/

Shares in Forge Group have soared more than 20 per cent as WA contractors join parties having a look at its books as the engineering company seeks a more lasting fix for huge project losses.

This may or may not lead to an actual offer, and any offer may be higher or lower than the prevailing share price.

 

[PurplePixie]

Thanks skc!

It's interesting watching what can change the price so quickly.

I imagine any take-overs would be on the strength of Roy Hill?

 

[ROE]

ANZ pull the pin, sad day, fire sale or bankrupt or corner investor at massive discount no win for shareholder in any scenario.

 

[skc]

ANZ pull the pin, sad day, fire sale or bankrupt or corner investor at massive discount no win for shareholder in any scenario.

Yup... that was a very dramtic and quick turn of events. It was always going to be a all or nothing type gamble... but I thought they would last a little bit longer yet.

 

[skc]

Another one added to Chairman David Craig's resume.

http://investing.businessweek.com/r...sCapId=23724765&previousTitle=FORGE GROUP LTD

2008-2010
Former Independent Non-Executive Director, Chairman of Audit Committee, Member of Nomination Committee and Member of Remuneration Committee
ADG Global Supply Limited

2008-2010
Former Non Executive Director and Chairman of Audit & Risk Management Committee
Entek Energy Limited

2008-Present
Non-Executive Director and Chairman of Audit Committee
United Minerals Corporation NL

2009-2013
Former Independent Non-Executive Director, Chairman of Audit & Risk Management Committee, Chairman of Remuneration Committee and Member of Disclosure Committee
Moly Mines Ltd.

2009-2013
Former Independent Non Executive Chairman and Member of Audit Committee
Southern Hemisphere Mining Limited

2010-2012
Former Consultant, Non-Executive Director, Chairman of Audit & Risk Management Committee and Member of Nomination & Remuneration Committee
Nomad Building Solutions Limited

2011-Present
Non-Executive Chairman
Gunson Resources Ltd.

2011-Present
Independent Non Executive Chairman, Chairman of Nomination Committee, Chairman of Defence Committee and Member of Health, Safety & Environment Committee
Forge Group Limited

2013-Present
Non-Executive Director, Chairman of Audit & Risk Committee and Member of Remuneration & Nomination Committee
Sirius Resources NL

None of these companies are booming successes... the jury's still out with SIR.

 

[PurplePixie]

ANZ pull the pin, sad day, fire sale or bankrupt or corner investor at massive discount no win for shareholder in any scenario.

I imagine the stocks are worth nothing now?

Or will they just be worth a very low amount?

Or would a shareholder go on a creditor list?

Totally new at this and have no idea what would happen.

 

[ROE]

I imagine the stocks are worth nothing now?

Or will they just be worth a very low amount?

Or would a shareholder go on a creditor list?

Totally new at this and have no idea what would happen.

You don't know until Thursday when the announce to the market their position ...but nothing good would come out of this .. These are possible scenario.

1. Bank pull their support and demand their debt back, FGE don't have the cash they are insolvent and their asset belongs to the banks, administrator call in, fire sale start...nothing will be left for holder...

2. They find a buyer for the business and the new owner wish to take on all the liability including the bank debt, how much they pay no idea

3. Sell off their asset or exchange their big contracts with some other company for some cash and pay back the bank debt, do they have anything to sell that worth 50-100m?

4. Recap, need to find a white knight who willing to inject money that satisfied FGE bankers and carry on...
This won't come cheap as FGE is on 000 emergency bed, they demand large discount and that dilute most current holders value..

When it comes to this shareholder usually get little value out of it....you are the last in line ....

 

[McLovin]

ANZ pull the pin, sad day, fire sale or bankrupt or corner investor at massive discount no win for shareholder in any scenario.

Hard to believe that if ANZ didn't want to stay on, even with the sweet deal they gave themselves, that there's much left in FGE worth saving. It wasn't even that long ago that this was still a darling stock, considered bullet proof by many even as the sector started to get whipped.

 

[PurplePixie]

Thanks Roe!

Doesn't sound too good either way!

 

[craft]

The warrant has a cash equivalent term which is basically an execution clause as the company could never meet the call. The bank could utilise this at any stage to maximise their windup distribution, but would not be in their interest to use it a point that left equity with anything.

What surprised me most about FGE is not that it ended up like this but that the price got close to $2.00 in-between the announcement that really put the writing on the wall and this one.

Best case scenario for shareholders is that the execution clause has been exercised because there is an offer on the table that management doesn't want to take but ANZ thinks they should. If there is no offer then ANZ will put them into receivership to protect its priority claims. Can't imagine there would be anything left for shareholders out of that process.

 

[skc]

Best case scenario for shareholders is that the execution clause has been exercised because there is an offer on the table that management doesn't want to take but ANZ thinks they should. If there is no offer then ANZ will put them into receivership to protect its priority claims. Can't imagine there would be anything left for shareholders out of that process.

Where did you read about that?

 

[McCoy Pauley]

You don't know until Thursday when the announce to the market their position ...but nothing good would come out of this .. These are possible scenario.

1. Bank pull their support and demand their debt back, FGE don't have the cash they are insolvent and their asset belongs to the banks, administrator call in, fire sale start...nothing will be left for holder...

2. They find a buyer for the business and the new owner wish to take on all the liability including the bank debt, how much they pay no idea

3. Sell off their asset or exchange their big contracts with some other company for some cash and pay back the bank debt, do they have anything to sell that worth 50-100m?

4. Recap, need to find a white knight who willing to inject money that satisfied FGE bankers and carry on...
This won't come cheap as FGE is on 000 emergency bed, they demand large discount and that dilute most current holders value..

When it comes to this shareholder usually get little value out of it....you are the last in line ....

As one of the commentariat pointed out when news emerged that companies like Monadelphous and other mining service providers were going through FGE's data room, they were almost certainly doing due diligence on FGE's numbers when the tenders awarded to FGE come back onto the market because FGE can't do the job any more.

I highly doubt that any peer/competitor to FGE would be interested in purchasing FGE. They would rather see the company go into insolvency and then cherry pick the best assets, use their intelligence from going through FGE's data room to cherry pick the best contracts and away they go.

I don't see a white knight coming to the rescue.

I don't hold FGE, but I do hold MND.

 

[craft]

Where did you read about that?

I'm just saying that it would be the best case scenario as an explanation to why ANZ have moved now.

ANZ have put themselves firmly in control - if its not to force acceptance of some offer then its to protect their claims via receivership.

I have no idea if there actually is any offer.

 

[skc]

I'm just saying that it would be the best case scenario as an explanation to why ANZ have moved now.

ANZ have put themselves firmly in control - if its not to force acceptance of some offer then its to protect their claims via receivership.

I have no idea if there actually is any offer.

I see. I mis-understood your wording. I wonder what sort of change of control / administrator appointed provisions exist in a typical contract. Re-tender is a timely and costly proceess...

 

[ROE]

http://www.afr.com/p/business/companies/forge_may_pay_ultimate_price_for_9aWkuE7JIGIeenJU7DRLWN

 

[ROE]

Game over
http://www.afr.com/p/business/companies/forge_appoints_administrators_source_lkLBq0TDWXrYnjC6s5JAaN

 

[McLovin]

So...who's next?

There's a whole bunch of small mining services companies that are surely only a few ham sandwiches away from being the next FGE.

 

[skc]

So...who's next?

There's a whole bunch of small mining services companies that are surely only a few ham sandwiches away from being the next FGE.

BLY's balance sheet is not in great shape with $190m current debt and $645m non-current debt against $37m cash and $443m of inventories. Any issues turning those inventories into cash will see it run into a bit of trouble. Equity market value is $210m.

EHL is another one. Current debt $9.3m, non-current debt $406m against $5.7m cash ~$50m debtors less creditors and $15m of inventories. They do have $820m in fixed assets (so if they can sell them near book value they'd be OK) and last reported op cash flow was decent. Utilitisation rate is 43% means a lot of idle fleet around. Equity market value is ~$170m.

Then there's Leightons... with potential cash flow problems in Middle East and probably Gorgon Jetty. But you'd hope it won't go under.

BTW, how good was CLO's timing?! Selling it's stake in March 2013 for a sweet $6.05.

 

[Miner]

As one of the commentariat pointed out when news emerged that companies like Monadelphous and other mining service providers were going through FGE's data room, they were almost certainly doing due diligence on FGE's numbers when the tenders awarded to FGE come back onto the market because FGE can't do the job any more.

I highly doubt that any peer/competitor to FGE would be interested in purchasing FGE. They would rather see the company go into insolvency and then cherry pick the best assets, use their intelligence from going through FGE's data room to cherry pick the best contracts and away they go.

I don't see a white knight coming to the rescue.

I don't hold FGE, but I do hold MND.

I'm just saying that it would be the best case scenario as an explanation to why ANZ have moved now.

ANZ have put themselves firmly in control - if its not to force acceptance of some offer then its to protect their claims via receivership.

I have no idea if there actually is any offer.

All speculation but reasonable explanation of its condition on FGE finance.
Who will trust ANZ who made a volte face after providing $100 M (?) debt assurance and then taking the support off.
I thought to miss out to make quick bucks last time when the shares sunk at 28 cents. But this time I am not going to think of even investing when it opens (if) on Thursday.
FGE management proved its incompetency so can not show any miracle .
two questions I have : what ANZ shareholders will say for its lending steps
Second - why still no one asked the directors for sleeping under the blanket and taking hefty bonus . It was raised at first trading halt and now buried under sand.
I am worried as an engineer about the fate of Roy Hill Project and the creditors who invested fortune through work in progress once FGE collapsed. Mrs R the richest person of Australia will probably blink after just sorting out her funding good. What about the people jobs once again will slide ? Roy Hill is the only large project in mining area in Australia/W now.
It is just not FGE shareholders going to be shafted.

- - - Updated - - -

As one of the commentariat pointed out when news emerged that companies like Monadelphous and other mining service providers were going through FGE's data room, they were almost certainly doing due diligence on FGE's numbers when the tenders awarded to FGE come back onto the market because FGE can't do the job any more.

I highly doubt that any peer/competitor to FGE would be interested in purchasing FGE. They would rather see the company go into insolvency and then cherry pick the best assets, use their intelligence from going through FGE's data room to cherry pick the best contracts and away they go.

I don't see a white knight coming to the rescue.

I don't hold FGE, but I do hold MND.

I'm just saying that it would be the best case scenario as an explanation to why ANZ have moved now.

ANZ have put themselves firmly in control - if its not to force acceptance of some offer then its to protect their claims via receivership.

I have no idea if there actually is any offer.

All speculation but reasonable explanation of its condition on FGE finance.
Who will trust ANZ who made a volte face after providing $100 M (?) debt assurance and then taking the support off.
I thought to miss out to make quick bucks last time when the shares sunk at 28 cents. But this time I am not going to think of even investing when it opens (if) on Thursday.
FGE management proved its incompetency so can not show any miracle .
two questions I have : what ANZ shareholders will say for its lending steps
Second - why still no one asked the directors for sleeping under the blanket and taking hefty bonus . It was raised at first trading halt and now buried under sand.
I am worried as a miner about the fate of Roy Hill Project and the creditors who invested fortune through work in progress once FGE collapsed. Mrs R the richest person of Australia will probably blink after just sorting out her funding good. What about the people jobs once again will slide ? Roy Hill is the only large project in mining area in Australia/W now.
It is just not FGE shareholders going to be shafted.

- - - Updated - - -

As one of the commentariat pointed out when news emerged that companies like Monadelphous and other mining service providers were going through FGE's data room, they were almost certainly doing due diligence on FGE's numbers when the tenders awarded to FGE come back onto the market because FGE can't do the job any more.

I highly doubt that any peer/competitor to FGE would be interested in purchasing FGE. They would rather see the company go into insolvency and then cherry pick the best assets, use their intelligence from going through FGE's data room to cherry pick the best contracts and away they go.

I don't see a white knight coming to the rescue.

I don't hold FGE, but I do hold MND.

I'm just saying that it would be the best case scenario as an explanation to why ANZ have moved now.

ANZ have put themselves firmly in control - if its not to force acceptance of some offer then its to protect their claims via receivership.

I have no idea if there actually is any offer.

All speculation but reasonable explanation of its condition on FGE finance.
Who will trust ANZ who made a volte face after providing $100 M (?) debt assurance and then taking the support off.
I thought to miss out to make quick bucks last time when the shares sunk at 28 cents. But this time I am not going to think of even investing when it opens (if) on Thursday.
FGE management proved its incompetency so can not show any miracle .
two questions I have : what ANZ shareholders will say for its lending steps
Second - why still no one asked the directors for sleeping under the blanket and taking hefty bonus . It was raised at first trading halt and now buried under sand.
I am worried as a miner about the fate of Roy Hill Project and the creditors who invested fortune through work in progress once FGE collapsed. Mrs R the richest person of Australia will probably blink after just sorting out her funding good. What about the people jobs once again will slide ? Roy Hill is the only large project in mining area in Australia/W now.
It is just not FGE shareholders going to be shafted.

 

[So_Cynical]

Service company's don't own anything so have no real value and yet are so attractive to value investors. :dunno:

RIP: Forge..another share market darling gone.