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Gold/Mining/Energy : TS TELECOM (www.tstelecom.com): ASPIRING TELECO -- Ignore unavailable to you. Want to Upgrade?

To: Ciao who wrote (1591)	9/8/2000 11:24:42 PM
From: Gordo	Respond to of 1762

Ciao, Now you're really stretching my accounting ability. I was a bit puzzled about the reference to Note 12. The only correlation I can draw is that the facilities of the Subsidiary group are collaterized by fixed deposits, and thus in effect the creditors would have a claim against cash for the amount of the collateral. Thus the amount of free cash available to the company is partially offset by the amount that is security for the line of credit. Now for the voodoo accounting - Item 14. The minority interest portion that is deducted from the proceeds of issuance of TST shares reflects the portion of TST that is not owned by TS Telecom (i.e. TST shares were issued for cash, but TS Telecom only owns 64% of TST and therefore only has claim on 64% of the cash). In addition, 36% of the net assets of what is now TST have been transferred away from TS Telecom which is represented by the ($2,691). The net result is called dilution gain - essentially a gain that was realized by spinning off assets into TST and receiving cash in excess of the book value of those assets. The term dilution in this context I believe refers to the dilution of TS Telecom's ownership in those assets as a result of the transaction. Clear as mud??? Okay, this is starting to hurt my brain. Enough accounting for one night. I still hold a small position in TOM - essentially free shares as I sold most of my position on the runup to $3 (actually some at $3) and realized a tidy profit. I'm planning to hold for now, but certainly not buy any more - I'm not convinced that the majority shareholders of TOM are truly operating the company in the best interests of all shareholders. There are far too many Related Party Transactions (Note 10) and other activities (share issuances, acquisitions, asset spin-offs) which do not always appear to be entirely above-board or in the best interest of all shareholders. If this were a private company this would be fine, but it is a public company that is being run by a few majority shareholders as if it were there own private company. There I have said my piece. Good luck to all. gord