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Strategies & Market Trends : Bosco & Crossy's stock picks,talk area

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To: The Ox who wrote (3188)	11/29/2002 7:25:59 PM
From: Crossy	Read Replies (2) of 37387

re: IPSU.OB - emerged Chapter 11 restructuring play IPSU.OB (Imperial Sugar) @ $2.00 Ok, this time no technology stock but an interesting post-BK chapter11 reorganized special situation where major players have a rather sizeable stake. Imperial Sugar was reorganized out of chapter 11 around a year ago. Morgan Stanley owns around 30% now and if you care to look at Edgar other investment firms are gobbling this up. The stock fell from $10 to $1 on bond funds that selling who obtained the new equity by the chapter 11 process instead of their former high-yield bond principal interests. Now the story seems to spread around and new investors take their position. Stock reversed the downward drift and is back up to $2 level. Company is basically a MAJOR company in food processing and sugar refining. Annual sales are above $1 billon. By selling non-core refining/milling assets they already brought down their bank debt level from over $200m to $120m now. Only 10m shares are out, so Price/Sales formulae is very low, around 0.02 and Price/Book around 0.20 - like in many other restructuring situations. If they further reduce working capital needs by selling noncore assets, they should be a handsomely profitable branded food products supplier. I bought in around the current level and are keeping this for the mid term. My last post-chapter11 play, Raytech (NYSE: RAY), an "asbestos lawyer victim" was more than a triple. This one could be even better ultimately because valuation looks even more attractive here.. Recently FAGAN CAPITAL took the opportunity of depressed prices due to bond fund selling and gobbled up around 700k of IPSU.OB shares. If you care to read the filings for the company, you will realize that a boardroom fight might be looming here. Another investor pointed me to the probable presence of a good amount of hidden reserves in the real estate owned alone. All in all a real nice restructuring play. Once the bank debt is refinanced, IPSU may emerge as a major player. From liquidity management the firm might be able to turn to growth management by the second half of 2003 take care CROSSY

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