Any view's on this share, sp50p assets 240 p/share

Looks like a good one - particularly after today's announcement with MOS.
See MOS BB - it's buzzing.

Hi All,

This is gonna fly soon .... NAV of 2.40, cash in Brazil earning 16p per share, yet a share price of 68.5p .... it will be corrected soon, and it could start tomorrow ....

Big write up in The Telegraph today ....

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2005/08/07/ccrown07.xml&menuId=242&sSheet=/money/2005/08/07/ixcoms.html

Best bits ....

It is not often that a chief executive discovers hundreds of millions of dollars sitting in a company bank account. But that was the nice surprise that greeted Stuart Pearson, the CEO of Crown Corporation, and his boardroom colleague Philip Wood when they flew to Brazil in June.

At the offices of Banco do Brasil in Sao Paolo, they were given confirmation that the business they had both joined only recently was US$659.6m (371m) in credit.

The bank provided a written statement that the funds existed and were available for Crown Corporation to withdraw - although the cash is supposed to stay in Brazil or Argentina, under local currency control restrictions.


"The main mission now is to get this cash out of South America through asset swaps," Pearson says. "We are looking at assets in Portugal now - a lot of land, casinos, hotels, and a golf course near Lisbon."

However, the Banco do Brasil is majority state-owned and is keen to see as much of the deposit as possible reinvested in Brazil. "It is a large dollar deposit and it is pretty clear the government wants most of the cash to stay in the country," Pearson says. "There will be a political solution I think. . . We'll probably have to buy a gold mine, which is fine. I don't mind doing that."



Cheers,
PM

UP 10.2% already, after pre-open buying ....

It's really gonna pop methinks :)

Cheers,

PM

It appears some just think it's too good to be true, and I was one at first but it's got to be worth a flutter, the opportunity of a lifetime me thinks. :)

Rob Hi,

True it is :)

They made a huge profit on the contracts, now they have the cash and are trading at a huge discount to NAV, without the EPS of 16p in interest even in the equation :)

Cheers,
PM

PM

Something doesn't quite add up with this one.
However couldn't resist the punt. So I just got in at 72p.

Excellent call on Aminex by the way.

Mono

Mono Hi,

Yeah, I hoped the 10% on this one earlier would have stuck, but with the cash in the bank, it's only a matter of time before they convert it to assets, and maybe get some out as cash, then the price cannot fail to show the true value of it.

Aminex, yeah very good day there, and interest is only just building up, so a long way to go yet, and hopefully a few nice oil strikes next year, will make them 's .... bargain of the week I think !

Cheers,
PM

This Company's Windfall has not been recognised yet but once they start the asset swaps into what will be considered more valuable than the Brazilian Deposit which incidently is paying 25m in interest per yr! The windfall came from contracts they onsold to Lambert Financial. Lambert paid with a $350m promissory note issued by the Banco do Brasil. As the company noted at the time, "the gross profit to Crown is equivalent to the consideration". Or to put it another way, in just seven months Crown had made a profit of $350m by winning the contracts with the help of Lambert and then selling them back to Lambert.

The other strange thing is that the contracts - $633m for one and $75m for a separate security contract - were sold for around half their combined value of $708m. That implies a profit margin of 50 per cent, which is extremely high for the construction industry.

Pearson explains: "What I understand is that Rybak thought he would be able to find a construction partner, but in the event he failed to do so. Lambert agreed to find a new buyer for the contracts but on the condition that it would have a year before it paid for them to try and sell them on.

"I don't think anyone believed they would be moved on in time and that the promissory note would be met," Pearson says. But the note has in fact been redeemed - which is the reason all that cash is sitting in the Sao Paolo account.

So a company capitalised at 100m earning interest of 25m per yr (P/E 4 alone on it's cash) and other interests which could greatly increase the value. Net assets in excess of 350m, Speculative Buy? Hardly speculative really is it, there are legal ways to repatriate funds which the Co. is working on and will just be a matter of time before the share price rises to the true value.

I'm holding tight.

This one will keep the cardiac unit at my local hospital busy !!!
What are those huges sells at 54p all about ??
The share price has even gone up to 65-69p afterwards.
Don't understand but still holding.

confused of South London

Something I just posted on the other Crown BB ....

ateeq Hi,

Rob is correct, but there is also the very high probability, that if the price does not go through the roof, Crown Corp will ask for the shares to be suspended, and request a rerating, after which they will resume trading at a much higher value.

You can tell from the AGM statement, that the directors want the true value of the Brazil cash reflected in the S.P, and a rerating will do that, if the news does not :)

Cheers,
PM

Can they do that?

Rob Hi,

Yes, it's been done before :)

Cheers,
PM