Rickmers has dropped from $0.22 in Nov 2015 to a mere $0.06 as of 20th Jan 2016.
Recent developments:
1) Rickmers has suspended the distribution of dividend, and will review every quarter.
2) Rickmers Maritime has exited Intercreditor Deed and Various Financial Restrictions Lifted.
3)
"In light of the depressed chartering markets, the Trustee Manager is of the view that it is appropriate to recognize impairment charges on its vessels in its 4Q2015 financial results amounting to about US$129 million. The impairments will be reflected in the income statement, thereby resulting in a net loss for 4Q2015 and FY2015." Announced on 14th Dec 2015.
Whats in for Rickmers now ?
1) Rickmers has a contracted value of US$197 million ( based on the factsheet updated as of 4th Nov 2015 on Rickmers Maritime Website ), assuming 0 renewal.
2) Rickmers has about US$325 million outstanding loan , with US$209 million expiring in 2017. As of 30th Sep 2015, Rickmers has US$50 million cash.
3) Rickmers will take a impairment loss of US$129 million or US$0.15 per share. Its asset will be left with US$0.42 ( estimated ) or S$0.60.
Analysis
Technically, with the contracted US$197 million + US$50 million Rickmers should be able to pay off the debt due 2017. Should they not able to pay, they can sell off some part of US$768 million worth of Vessel ( Dont know if the vessels are worth that much ).
Currently it is trading at 6cts or 0.1x its estimated book value. Looks like it is trading at a bargain.
Should Rickmers be able to contract more revenue or a recovery in shipping rate or sale of vessels, Rickmers may come back stronger.
My speculative recommendation: Buy with potential high returns with high risks involved.
Recent developments:
1) Rickmers has suspended the distribution of dividend, and will review every quarter.
2) Rickmers Maritime has exited Intercreditor Deed and Various Financial Restrictions Lifted.
3)
"In light of the depressed chartering markets, the Trustee Manager is of the view that it is appropriate to recognize impairment charges on its vessels in its 4Q2015 financial results amounting to about US$129 million. The impairments will be reflected in the income statement, thereby resulting in a net loss for 4Q2015 and FY2015." Announced on 14th Dec 2015.
Whats in for Rickmers now ?
1) Rickmers has a contracted value of US$197 million ( based on the factsheet updated as of 4th Nov 2015 on Rickmers Maritime Website ), assuming 0 renewal.
2) Rickmers has about US$325 million outstanding loan , with US$209 million expiring in 2017. As of 30th Sep 2015, Rickmers has US$50 million cash.
3) Rickmers will take a impairment loss of US$129 million or US$0.15 per share. Its asset will be left with US$0.42 ( estimated ) or S$0.60.
Analysis
Technically, with the contracted US$197 million + US$50 million Rickmers should be able to pay off the debt due 2017. Should they not able to pay, they can sell off some part of US$768 million worth of Vessel ( Dont know if the vessels are worth that much ).
Currently it is trading at 6cts or 0.1x its estimated book value. Looks like it is trading at a bargain.
Should Rickmers be able to contract more revenue or a recovery in shipping rate or sale of vessels, Rickmers may come back stronger.
My speculative recommendation: Buy with potential high returns with high risks involved.
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