copyright Thomas Ramseyer
Petroplus - the Rescue Campaign
Petroplus is said to have but CHF 1.1 Billion cash at hand. However, the amount needed counts for some CHF 1.7 Billion.
On
January 1st, 2012, the Board of Directors announced shutting down
refineries. To make such a decision is not difficult; in fact it is very
easy.
Even an apprentice knows: if there is no crude oil on stock there is nothing to refine. (Capo) As Petroplus lacks liquidity thus it cannot buy crude.
The Merry-Go-Round
(CAPO) When it cannot buy crude, it cannot refine oil. If there are no refined goods there is nothing to sell. If there is nothing to sell, there is no positive cashflow. If there is no positive cashflow, there is no liquidity. da(CAPO)ad libidum . . . . as Petroplus lacks liquidity, . . . .
The downgrading by the agencies was like carying beer to Munich when going to the Oktoberfest.
When trading oil the transaction is done delivery against payment. The procedure is well established; there is no risk for both the seller and the buyer.
Facts
0) Petroplus is lacking some CHF 1.5 Billion
There is no time to lose. The wake-up call already sounded quite some time ago.
1) Moody's and Standard & Poors
downgraded Petroplus to junk (CCC)
2) Shivering greenhorny bankers
without guts cancelled credit limits; death blow to follow.
3) Petroplus lacks oil
due to inability to buy oil against delivery.
4) According to statements Petroplus will stop
production within seven days.
5) Petroplus have their plants stop
refining oil (due to shortage of crude)
6) Petroplus is going down the drain
just as Swissair did in 2002.
7) Having refineries in Switzerland is a strategic must
Thus Petroplus is too important to fail. (Petroplus is lacking only USD 1.5 Billion. Compared to the 6 + 60 Billion-rescue of UBS that amount is just a chicken shit
8) CHF 1.6 Billion means NGN 1827 per Nigerian Citizen
NGN 1827 count for CHF 10.70 - this means that if every Nigerian contributed CHF 10.70 USD 1.6 Billion would be raised.
8.1) Petroplus market value right now is about CHF 165 Million (CHF 165'000'000) Nigeria's population of some 165 Million given CHF 1.00 per head is sufficient to acquire the entire company.
Even an apprentice knows: if there is no crude oil on stock there is nothing to refine. (Capo) As Petroplus lacks liquidity thus it cannot buy crude.
The Merry-Go-Round
(CAPO) When it cannot buy crude, it cannot refine oil. If there are no refined goods there is nothing to sell. If there is nothing to sell, there is no positive cashflow. If there is no positive cashflow, there is no liquidity. da(CAPO)ad libidum . . . . as Petroplus lacks liquidity, . . . .
The downgrading by the agencies was like carying beer to Munich when going to the Oktoberfest.
When trading oil the transaction is done delivery against payment. The procedure is well established; there is no risk for both the seller and the buyer.
Facts
0) Petroplus is lacking some CHF 1.5 Billion
There is no time to lose. The wake-up call already sounded quite some time ago.
1) Moody's and Standard & Poors
downgraded Petroplus to junk (CCC)
2) Shivering greenhorny bankers
without guts cancelled credit limits; death blow to follow.
3) Petroplus lacks oil
due to inability to buy oil against delivery.
4) According to statements Petroplus will stop
production within seven days.
5) Petroplus have their plants stop
refining oil (due to shortage of crude)
6) Petroplus is going down the drain
just as Swissair did in 2002.
7) Having refineries in Switzerland is a strategic must
Thus Petroplus is too important to fail. (Petroplus is lacking only USD 1.5 Billion. Compared to the 6 + 60 Billion-rescue of UBS that amount is just a chicken shit
8) CHF 1.6 Billion means NGN 1827 per Nigerian Citizen
NGN 1827 count for CHF 10.70 - this means that if every Nigerian contributed CHF 10.70 USD 1.6 Billion would be raised.
8.1) Petroplus market value right now is about CHF 165 Million (CHF 165'000'000) Nigeria's population of some 165 Million given CHF 1.00 per head is sufficient to acquire the entire company.
9) A lot of jobs are going to be destroyed
Employees and their families will be jobless. Certain regions virtually will be abandonned.
10) If Nigeria achieved to buy a substantial minority or even a majority then putting some Nigerians on the board of directors there will be a great opportunity to get knowledge, skills, experience and science as well as Refineries (to be built financed by a secondary offering to the public) to the Nigeria, the ECOWAS country with the highest potential.
thus being at the mercy of its surrounding countries. Petroplus vulnarability to be blackmailed will aggravate. This prevents investors from buying Petroplus, they even prefer to sell them at the market. (Petroplus traded at CHF 60 in 2008, lowered to CHF 3.5 by Christmas 2011, to drop to 1.20 to 1.70 upon Petroplus' board of directors announcement of the banks having cancelled the credit facility of USD 1.7 Billion. At the End of the year Petroplus had to announce the shut down of some 3 to 5 Refineries (Swiss Refinery included)
Threats
0) Cancelling of credit limits
due to the actual governmental debt crisis has regulators demand the banks for higher shareholders' capital.
1) Raising fresh shareholders capital an illusion in Switzerland
Given the ratings of Moody's and S&P, the northern investors will never participate in a capital increase.
1.1) Raising fresh shareholders capital no illusion when it comes to a strategic decision taken by a Country such as Nigeria
Nigeria's population is well able to tackle the goal supported by swift action taken even by private activity. (Politicians will take too much time to decide quickly enough) There is no time to lose.
1.1.1) Suggestion: a neatly working setup
A share holder company forcedly has to be founded in Nigeria. The only purpose thereof will be: AQUIRING PETROPLUS. The name of this company may be: Nigerian Domestic Economy Development (NDED)
The payment under subscription of a very high number of shares (suggested 17.5 Billion shares) 2) Issuing bonds of whatever quality
There is already USD 1.75 Billion outstanding debt. For numerous people's counting Nigeria no big deal at all.
3) Running out of Crude Oil
4) Because of stopping refining (DOWNSTREAM acitivty)
Petroplus is running out of stock; all oil derivatives will be sold in due course. Imminent insolvency will drive Petroplus out of the market. As they have no connections with Nigeria (partly they are afraid of known (419) problems, they would never buy Bonny light. Also they have no idea about transporting oil by huge cargoes. They explained that they get their oil from eastern countries (Aserbeidjan, Russia, UAE, Saudiarabia by the mean of pipelines. It is known that Petroplus' board of directors as well as its Management is not flexible enough to act in an appropriate manner. The literally got stuck mainly for the reason of arrogancy and ignorance. For the time being they had, have and will have no money to buy crude Arab or Nigerian Bonny.
5) The lack of UPSTREAM activity
proves to be a high risk strategy. Building up Refinery capacity in Nigeria then selling the derivatives in Nigeria will be a prosperous business. No shipping cost (Nigeria to USA for crude Bonny light, USA to Nigeria for derivatives such as fuel, grease and others) to be paid; a comparative advantage.
6) The slowdown of the worldwide economy
will result in far lower demand in 2012 then in 2011. As Bonny light is tagged to Brent which trades USD 10 to 20 since more than one year, Nigeria is not able to sell even not a sole drop to manufacturers abroad. Due to weird activity at the Chicago Board of Trade (CBT) in Chicago, USA, Brent Oil's price sticks well above Bonny light. This activity's only purpose must be the crouding out of Nigeria's Bonny light. Maybe some Arab countries - they are in desperate need of cashlow to boost their real estate business even more as well consolidating debt - are manipulating the Brent price for the sake of using OPEC's entire per day allocation.
Findings
Its management applying the old-school way of running the business, Petroplus will vanish from the scenery. Extraordinary situations ask for a highly flexible decision process. Waiting for the politicians is a waste of time. There is not much time left. The bankers are tightening the garotte's screw.
Extraordinary situations demand unconventional actions
The market is not restricted to the northern countries. Consider markets to grow in SubSahara countries.
Remedy - creation, development and maintenance of new markets
Instead of looking for markets the development of such markets must be tackled.The steadily growing demand will generate cash resulting in a booming domestic market.
Recommendation :
0) Plan for Petroplu
1) Building or being furnished with upstream facilities in Nigeria - timeframe: medium to longterm - but immediate start
1.0) Action plan - longterm timehorizon focussing on the future
in a region like the ECOWAS not yet troubled by turmoil, riot and instability like Mediterranian and ex Soviet Union region.
1.2) The geographic region to choose is Westafrica (in fact lead by powerful Nigeria)
organized as ECOWAS. The country to prefer will be Nigeria.
1.3) Build infrastructure in the chosen location, transfer knowledge, know-how and experience
1.3.1) Transfer from North to South
Transfer knowledge, skills, knowhow and science for free to the South.
1.5) Build up a downstream market in Nigeria as well to sell the refined goods directly all over Nigerian states thus the whole country.
2) Financing of actual and future activity 2.0) Outstanding debt (31.12.2010)
accounting for USD 1'750 Million
2.0.1) Petroplus' Maturity Profile......................................
2014 |||||||||||||||||||||||||||||||USD 600 Million||||||]
2015 |||||||USD 150 Million|||]
2017 |||||||||||||||||||||||||||||||USD 600 Million||||||]
2019 ||||||||||||||||||||USD 400 Million||||]
2.1) Implement local share holder company
fully owned by Petroplus Holdings AG, Zug
2.2) Create 1.7 Billion units or even more (1 share + 9 options)
at USD 0.01 on behalf of the local company in Nigeria, fully owned by Petroplus Holdings. Thereof 170 Million units are to be issued primarily upon completion of the creation. 1'530 Million remain as treasury stock to be sold at the secondary market according to the progress of the business. Potential USD 17 Billion
2.3) Primary placement will be 170 Million units
at USD 0.01 including 9 perpetual call options. Funds needed: USD 1.7 Million (1'700'000)
2.4) Roadshow revealing an attractive business plan
for arranging a secondary placement at Marketvalue plus discounted phantasy (USD 10.-- per unit of 1 share 9 calloptions included.
3) Petroplus Market Data
3.0) Standing Data
Total nominal value CHF 712'327'528
Nominal per share CHF 7.48
Number of shares 95’230’953
Value CHF 161'892'620 Number of shares 95’230’953
Realtime Petroplus Holdings Market Data Six-Exchange
Annual Report 2010 (Geschäftsbericht 2010)
copyright Thomas Ramseyer
http://www.xing.com/profile/Thomas_Ramseyer5?sc_o=mxb_p
