SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : IPPs and Merchant Energy Co.s
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: majaman1978 who wrote (851)1/1/2003 12:42:41 PM
From: KyrosL  Read Replies (1) of 3358
 
I think the potential problem with MIR bonds is not the reaudit but the timing of the wholesale electricity market recovery. If the recovery is delayed beyond 2004, MIR may go bankrupt, if not taken over before then. The reaudit may reveal some past problems, but of far greater importance are current earnings and current liquidity. MIR still has a lot of liquidity ($1.4 billion at ye), but every quarter it seems that more cash than previously estimated disappears into the maw of writedowns and collateral requirements. For example, only a few months ago the company was talking about closing the year with $1.5 billion and that did not include the China plant sale. In the 3rd quarter 10Q the company revealed more writedowns of dozens of turbines scheduled for the 4th quarter -- I thought the company was done writing those down back in 1st quarter.

My bet is that in the 4th quarter they will complete their writedowns, and this is what I expect to hear from the Jan 10th CC. I also expect to hear a drastic reduction of capex for 2003 compared to previous estimates, given the writedowns of all the greenfield plants in Europe. However, keep in mind that many MIR investors thought the writedowns were complete back in the first half, and were unpleasantly surprised throughout the second half.

A conservative strategy is to wait for the jan 10 CC before buying the bonds. Usually the bonds don't move much, although if the CC is particularly good, you may have to buy for 5 or 10 cents higher.

Kyros
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2026 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News