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Gold/Mining/Energy : American Eco (ECGOF, ECX on Toronto exchange)
ECX 1.8000.0%Dec 19 3:59 PM EST
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To: Michael Anthony who wrote (2277)3/29/1998 4:00:00 PM
From: david james  Read Replies (1) of 2841
 
DBCO has their annual shareholders meeting tomorrow and management will need to explain to their shareholders about their complete failure to get any value out of the stock. They've been losing an increasing amount of money despite increases in revenues and their stock is trading at less than 1/5th of the highs about 3 years ago. I believe that DBCO is asking shareholders to approve the new contracts of some of DBCO's old management. I think its a safe bet that the announcement was an attempt to protect themselves from the wrath of their shareholders.

This deal for DBCO involved $20 mill up front and taking on about $40 mill of DBCO's debt. Given the past reputations of DBCO's management, it seems pretty likely that any group offering to loan Eco cash for this deal would want some assurances that this money was well spent. We may get a response by Eco on Monday. But even if we assume that the story is true as it states, the 'failure' of Eco to obtain financing may be primarily because the banks saw this investment as too much risk given the level of debt and negative cash flow that DBCO shows. It does not mean that cash would be unavailable for 'safer' acquisitions.

David
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