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No they paid 1x PE.
They are issuing 3% of capital in new shares or so.
That’s the price paid.
The minority at H1 this year is something like USD 35-40m.
That’s for HALF A YEAR. You need to double this and compare with $m of shares issued.
Then you get multiple paid.
Great press release this morning.
Minority buyout where Thungela is paying SUB 1x PE for these assets.
Conservatively that’s 5% on share price accretion since you will be valuing it at higher group multiple not 1x PE.
This is an excellent t time to reload on the shares.
1) Cop27 concluded with a watered down version of the text in which it only refers to phasing down coal and not phasing out coal. It also opens way for gas to be seen as a transition fuel. This is key since gas markets also drive coal markets. So it’s bullish thermal coal.
2) Today should be the day Transet reopens northern rail corridor after derailing interruption. Recall, as I said last week if you add up all the strikes and detailing hit and really say that volumes have been significantly hampered since October you could be looking at free cash flow boost from normalisation of activities or $200-300m next year. And next year is less than a month and half away…
3) Coal prices are recovering as weather also turns colder.
4) At say $190/t coal (which is below spot at >200) the company’s cash will be worth the whole market cap before year end 2023. This is transformative for any company.
On an 80%+ fcf yield ex cash this company is a printing press.
BUY!
Surprised the shares not reacting positively to this…
a return to normal operation will mean an improvement to free cashflow of $200-300m in a fully year in 2023 (strikes, derailing etc).
This is notable.z
That Seeking Alpha article is missing a key point of the thesis.
He calculates 30% FCF Y. Where he is wrong is he needs to deduct the mountain of cash and use the ex cash market cap to calculate it.
If you do that, on my numbers you end up at >80%.
And that’s transformative to the bull case.
The strike then derailing sagas are buying opportunities.
The stock is priced as though volumes have been impaired by near 20% forever.
Evidently these are one offs and will just make next year’s comparables very easy and favourable.
Buy ahead of 2023.
By end November 2023 this company’s market cap will be entirely backed by CASH.
And that’s at $190/t coal not 300…
Be as gloomy as you want but this is so cheap that so much negativity is already priced in.
Is it going to halve from here so the market cap will be entirely backed by cash by May 23 instead ;-)
This is a no brainer entry point, with a highest assymetric payoff to the upside.
Reposting - typos:
I am buying more today…
People sell plagued by fear.
Yet they forget that by end November 2023 this company’s market cap will be entirely backed by CASH.
And that’s at $190/t coal not 300…
Say whatever you want but this is so cheap that so much negativity is already priced in.
Is it going to halve from here so the market cap will be entirely backed by cash by May/June ;-)
This is a no brainer entry point, with a highest assymetric payoff to the upside.