Member Info for bigbadbob79

Hahahaha. You'll have to try harder than finding stuff from over 2 years ago. Totally different coal market, the didn't have shed loads of expensive debt etc etc etc.

What was I saying earlier this month?

What was I saying earlier this year?

Well well well.

Quelle suprise.

Avani get the mine. Shareholders will be left with nothing. Just as I said would happen.

Hope that too many people didn't fall for the rose tinted shills (who seem to have disappeared, strange that) saying this was an opportunity to buy an undervalued business etc etc.

Mick007, yeah but the company is going to remain cashflow negative. Even if coal went to $500, BEN keeps burning through cash.

It won't. BEN gets $120 per tonne, everything after that goes to Avani to repay the loan principal.

That $120 has to cover all direct costs, the royalty, overheads etc. It's way below breakeven. The lights will be turned off soon.

Makes zero difference to BEN as everything above $120 goes to pay off the Avani loan.

Yes, you would definitely have done better with Premium Bonds - you can't lose any capital there!

I don't have a "book" rpg7, but it's clear you do.

I comment because I have followed the share since IPO, and it's an interesting case study in hubris turning to reality. And yes, maybe there's part of me that thinks it's a bit of public service to counter some of the laughably optimistic rose tinted views with a dose of cold hard reality.

The company is loss making. It's always been loss making otherwise they wouldn't have needed loans to keep going. It's now even more heavily loss making with a millstone of very expensive debt that also has conditions attached which means BEN cannot be cash generative whilst that debt exists, regardless of what happens to coal prices. The company is therefore now locked into a debt spiral and at some point the white flag will have to go up, shareholders will be rinsed and Avani get the mine.

There is no doubt here about the eventual outcome, it's just a matter of when.

What other reason is there for a low trading volume and record low price other than investors can see this as an utter basket case with no plausible investment proposition?

Because nobody wants to buy them and many holders have seen 80% of their value evaporate so might as well hold on and hope for a miracle?

Mick. The issue is the $120 doesn't cover cost of production. So the company is locked in a debt spiral regardless of coal price. They will run out of cash again very soon. Then what?

Correct sushi.

In fact even if coal prices doubled overnight the company would not benefit as everything over $120 has to go to pay off the principal on the Avani loan. $120 doesn't cover operating costs, so even if they pay off some loan, they will have to go cap in hand to Avani for more expensive debt to keep the lights on.

There'll be no bottom feeders here, there's nothing to feed on!

RPG

",i buy shares as an investment , not to trade ."

Nobody is going to trade this with a 50% spread. I also don't see that there is an investment case here. Sorry. I hope it works out for you but I just can't see BEN surviving the coal price returning to normality and burden of very expensive debt.

JohnHenry, absolutely agree with you. BEN will be wound up, mine and plant will pass to Avani. Avani will mothball it until such time as Met B prices increase to a point that paying a contractor (eg MHW) to mine some coal for them is cheaper than market price.

Avani see this as a long term hedge against coal price movements, and it's not really costing them anything as they get the coal in return for the debt funding which they know will never be rapid. Avani will get the coal and the mine, but they have no interest in acquiring BEN the company.

I hope that works out for you, but I fear it won't.

Avani don't want the company, it's loss making and valueless. They want the assets, and they're going to get them. Shareholders will be left with nothing IMO.

What's your motivation RPG? Trying to ramp the price up a bit so you can exit?

Neither, interested observer. I bought soon after IPO and sold out (way too early) for a decent profit at around 40p.

Why would Avani buy more shares in a loss making coal miner?

They don't want the company.

They will get their 400,000te of coal.

Then BEN will default on the loan at which point Avani call it in, sell the equipment they have secured the loan upon and there's nothing left for shareholders or other creditors. Who knows, perhaps the property is also part of the security in which case Avani just pay a contractor to do some mining as and when coal prices are high.

They aren't. They're going to get their 400,000te of coal, and then they are going to take the mine and the equipment that they have secured the loans on.

Avani pay, say, $220/te for coal. $100 of that (the excess of $220) goes straight back to Avani as load repayments. BEN is heavily loss making at $120/te gross for the coal.

You don't need to be a rocket scientist to see where this is heading.

"Looks like the market does not agree with the doom mongers"

And now the little spike is done and dusted the share is back at all time low. So yeah, market agrees.

The only thing that can save this is a miraculous and sustained increase in coal price.

The company can't do anything else can it? The asset is the mine and installed plant. They have debts bearing interest, they need cashflow or go bust.