Fortune oil14 Feb 2014 07:38
Morning Del , always good to read your posts .
I would like to tell a story , and would be interested in your comments from yourself and others .
I agree broadly with your email , however I may see the prioritys differently . For me the big story is Maoming .
This was always going to be a huge project , and their was always the question of where the money would come from . Would we increase our borrowings , would we have more share dilution . ( yes we did )
I was perplexed by the 2.36 pence divi , but maybe this was done for two reasons .
1=) To allow the extra shares (1/2 billion to be created and thus increase the hold the concert party have over this company . ) ( a reverse buyback if you like . )
2=) To appease shareholders ( first time ever . )
We now have the money for Maoming ( I believe )
On associate status , although important , I look at the Vodafone story unfolding , with it's 45 % stake in Verizon .
( my largest holding ) .
For years Verizon was allowed under American law to use it's cash reserves to pay down debt , and to stop a payout to Vodafone shareholders .
However Vodafone has played a blinder and looked forward to the day , when dividends would be restored .
They have been now and because of this Verizon have had to give Vodafone a reasonable deal in order to get their 45 % stake back .
The point I am making is that the value of Verizon was never realised in the Vodafone share price until , this deal was anounced , and as such the shareprice I believe reflects just under true value . ( I would put it at about 2 pounds and 50 pence , but won't get into that debate on this page ) .
The point of this story , is our CGH holding is significant , but we may have a similar story , and may not realise the true value until it is disposed of .
If CGH however continue to pay dividends at an increasing rate , then I believe that at about 15 cents in the hong kong dollar ( not their yet ) would cover the interest payments on our 300 million loan . and allow us to expand quicker .
Last point , I did believe at one time that this would be a company that would slowly increase it's dividends over the years , but while this still maybe the case , I don't think this is now a priority of FTO , I look forward to the announcements due , but would not be suprised , if the Attention was directed at Maoming .
The usual caviats apply , that this is all in my own opinion , and that these are only my musings , when I get caught up thinking at what stage will we start to see value from this share extracted .
I won't finish by saying this could be it . ( too many false dawns ) , but just good luck everyone .
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