PNC - Pioneer Credit

[craft]

Hi @craft
Things are looking bad. Today it dropped to $0.31, that's 39.8% from yesterday. Things have been going not too well over the past couple of months. Recent market turmoil has not help.

Today, this announcement looks like it put a nail in their coffin. Maybe I am being too alarmist.
https://www.asx.com.au/asxpdf/20200324/pdf/44gbdpg44yw08l.pdf

This is not an update. This is saying that Carlyle might want to back out??? I think they got a raw deal??

I may as well pick PNC for the tipping comp. A4N have not served me well in terms of tipping, so I am going to choose PNC.

Hi @Faramir

I exited Pnc as soon as it restarted trading. Wasn't prepared to risk deal completion then, certainly wouldn't risk it in this market. Not following developments in this company, many better opportunities in this market.

 

[Faramir]

Just as PNC was going great for my tipping comp in April - this Trading Halt happens:
https://www.asx.com.au/asxpdf/20200408/pdf/44gt653gt5lmpp.pdf
Their “White Knight” could have picked a better looking damsel to rescue.

Oh well, I wore the yellow jersey for at least 4 trading days during April.

@Dona Ferentes I am really worried about this business. I feel sorry for its clients and front line staff. I use to believe in its ‘ethics’ about how PNC helped its vulnerable customers. Maybe I was fooled by my naivety. There seems no way out.

 

[Dona Ferentes]

this Trading Halt happens:
https://www.asx.com.au/asxpdf/20200408/pdf/44gt653gt5lmpp.pdf
Their “White Knight” could have picked a better looking damsel to rescue.

@Dona Ferentes I am really worried about this business. I feel sorry for its clients and front line staff. I use to believe in its ‘ethics’ about how PNC helped its vulnerable customers. Maybe I was fooled by my naivety. There seems no way out.

Trading Halt.... has all the hallmarks of Carlyle pulling out (as per the denial in response to media 25/3).... and, then, CFO moving on (06/4), mmmm? ......Red Flags (up the pole)

 

[Dona Ferentes]

plot thickens. On 13 April, Carlyle Group issued PNC with a 27-page list of demands implying the company had been less than forthright during the due diligence process and reserved the right to demand Pioneer return the $141.6 million debt it has drawn down.

Among the defaults claimed by Carlyle Group with Pioneer Credit are "strategies employed by the company between March and August 2019", "non-compliant disclosure of information to Carlyle prior to its entry into the facility agreement" and "internal governance matters".

The Australian Financial Review understands Carlyle Group is livid the company was offering large discounts to debtors in 2019 to get money in the door and is yet to appoint permanent replacements to the chief risk officer, chief operating officer and chief financial officer roles.

Pioneer Credit has denied the claims..

"The Company is generally disappointed with Carlyle’s actions and is considering this further letter and its proposed response. Pioneer believes that it has engaged with Carlyle in good faith continuously throughout the period since the SIA was signed, providing extensive information, analysis and data and has responded to all enquiries with vigour and detail. It seems clear to the Board that Carlyle are intent on exercising maximum pressure on the Company, including using the potential impacts of COVID-19, to move from their original commitment under the SIA and either withdraw from the transaction or attempt to gain control of Pioneer for a very low price. "

- well, der.

 

[Value Hunter]

It seems that what I previously mentioned in this thread about the numerous red flags of both Pioneer Credit and Collection House turned out to be extremely prescient.

 

[james5890]

Hi Everyone;

PNC (Pioneer Credit :ASX 200) stock price has been falling constantly from last few weeks after cleansing statement announced. what could be the reason of price drop? stock price just went up before cleansing announcement. does this all activity say good or bad sign?

 

[peter2]

A cleansing notice is a statutory notice a company must issue after placing new shares on the market. They are usually accompanied by appendix 3Bs. Their purpose is to tell the market that the company is in compliance of its continuous disclosure obligations and is not relying on any carve outs under the continuous disclosure regime. In other words the market is fully informed. This means the newly placed securities can then trade with no restrictions. Hope this helps. Above is my basic understanding but I am no lawyer.

The cleansing notice would not have caused investors to sell. It could be a few knife catchers selling to grab some profit or other holders taking the opportunity to sell after the recent rally.

PNC looks to have been in big trouble during the past year.

 

[coolcup]

The cleansing notice would not have caused investors to sell. It could be a few knife catchers selling to grab some profit or other holders taking the opportunity to sell after the recent rally.

PNC looks to have been in big trouble during the past year.

Is there a reason you quoted my post from 7 years ago? I am trying to understand the relevance to today, I may have missed the connection. Also I'm not sure I intended to convey the cleansing notice from 7 years ago caused investors to sell.

 

[james5890]

The cleansing notice would not have caused investors to sell. It could be a few knife catchers selling to grab some profit or other holders taking the opportunity to sell after the recent rally.

PNC looks to have been in big trouble during the past year.

Thanks Peter

 

[peter2]

@coolcup I quoted your explanation of a cleansing notice as I thought it was a good explanation.

Knowing what a cleansing notice is would make it an unlikely reason for the recent price fall in PNC. Hence my response to James5890.

 

[coolcup]

@coolcup I quoted your explanation of a cleansing notice as I thought it was a good explanation.

Knowing what a cleansing notice is would make it an unlikely reason for the recent price fall in PNC. Hence my response to James5890.

Thank you for clarifying mate. I thought I had inadvertantly drawn a link I didn't intend to or misunderstood your note. Thanks again.

 

[Value Hunter]

Pioneer Credit is definitely still a zombie company. Still alive but in a weak position and likely to remain so for years to come.

 

[The Cruising Investor]

I bought this company years ago as a dividend stock, but after a bungled takeover, the dividends stopped and the price tumbled. I now hold well out of the money. I think the business is differently a growth industry and PNC has some good contracts, so cash flow still looks good. I would expect dividends to start again in Q2 2021(albeit much smaller than before). Once the 20 days MA crosses the 128 day MA (just my system) I will heavily dollar cost average, so my break-even point is much closer. So long as PNC gives guidance on dividends I will be a long-term hodler.

 

[Scotsman88]

Hi Guys,

I am new to the forum but would love to hear how your views have changed on Pioneer Credit.

I like the management remuneration scheme and cashflow's seem to be moving back into the positive. Debt levels are high and they seem to have a higher cost of borrowing than their Australian competitors, however, on par with overseas businesses in the same sector. As the rates are variable this leaves them exposed. However, they are picking up more distressed consumers at lower prices and the Macro job environment is holding steady. At 0.34 the stock seems cheap. Annual report is due to be published 30/08/23 and the interim report was positive. The CEO (and majority shareholder) has been talking up the financial results over the airwaves in recent times.

I am considering buying some at this price.

Any feedback would be greatly appreciated.

Cheers,

Scotsman88

 

[Faramir]

I went from FOMO although I didn’t buy any PNC —>> to this stock stinks —>> I have no idea what PNC does, meaning I have just ignored PNC.

If I didn’t understand PNC while I took a mild interest in it, I definitely don’t understand it now. So the only way I could change my view is:
—>> this stock stinks —>> I have no idea but I suspect this stock stinks but I don’t know why

So I may as well continue to ignore PNC

 

[Faramir]

1 year chart vs 5 year.
I am no chartist but I don’t believe there’s a turn around. Then again, I should be the last person to have a view on PNC.