CXG 2.27% 21.5¢ coote industrial ltd

vintage garbage

  1. 426 Posts.
    lightbulb Created with Sketch. 9
    This announcement is full of spin and little else.

    The only concrete news is that Greentrains PL at the moment can not pay for what has been delivered.

    Part payment of 80 Million could be two million dollars.

    "Major portion of the remainder" by definition is less than the full receivable.

    The company is sholdering all the commercial risk in this transaction for an 'arms length' company with uncertain capital and capacity to pay.

    If there is a downturn and South Spur Rail can not hire out these locomotives will Greentrains forgive the receivable and help Coote industrial, somehow I doubt it.

    Banks are very negative to engineering companies at the moment and I doubt that they would roll over existing facilities without greatly reducing the limits.

    Coote Industrial has basically bet a huge slab of bank money to "help facilitate" Greentrains into a deal.

    Banks arn't stupid and often notice when clients bet the shop in a risky manner. I would expect Coote to have problems rolling over their facilities.

    Pity really, I liked the Rail story.

    Will watch and wait.

arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.