Author Topic: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?  (Read 176246 times)

gokou3

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #550 on: April 30, 2019, 04:38:01 PM »
https://www.bloomberg.com/news/articles/2019-04-29/vancouver-s-once-rollicking-casinos-hit-by-dirty-money-crackdown

Meanwhile, Dundee has said it’s seeking to bring in a new partner to Parq by Tuesday. All told, investors had pumped more than C$1 billion in long-term debt and equity into Parq by the end of 2018, according to filings. Dundee, which put in C$142 million of that   :o :o, has said it doesn’t expect to fully recover its investment and that it could take another year or two before Parq is closer to stable operations.

"They don’t necessarily think they’re going to get their money back," said Hood. "But they do think that they’ll get a substantial portion back and that’s why they don’t just give up and sell it."


The first Parq reference in Dundee's filings is in their March 2015 AIF.

It must have taken some really impressive talent to lose dramatic amounts of money in a real estate development located in Vancouver over the past 4 years...

As a Vancouverite, can't agree more.  This will take someone like a Brookfield with multi-facet RE experience to turn around.



bizaro86

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #551 on: April 30, 2019, 05:02:33 PM »
https://www.bloomberg.com/news/articles/2019-04-29/vancouver-s-once-rollicking-casinos-hit-by-dirty-money-crackdown

Meanwhile, Dundee has said it’s seeking to bring in a new partner to Parq by Tuesday. All told, investors had pumped more than C$1 billion in long-term debt and equity into Parq by the end of 2018, according to filings. Dundee, which put in C$142 million of that   :o :o, has said it doesn’t expect to fully recover its investment and that it could take another year or two before Parq is closer to stable operations.

"They don’t necessarily think they’re going to get their money back," said Hood. "But they do think that they’ll get a substantial portion back and that’s why they don’t just give up and sell it."

The first Parq reference in Dundee's filings is in their March 2015 AIF.

It must have taken some really impressive talent to lose dramatic amounts of money in a real estate development located in Vancouver over the past 4 years...

You'd think so, but Parq is not just a condo building. The size, complexity and uniqueness raise the uncertainty level dramatically. I think the mistake was doing something so far outside their circle of competence. These guys are not developers. They had no business getting involved. Parq has the fingerprint of Ned Goodman's later stage "Master of the Universe" persona that led to so much capital destruction. It's pretty sad that he succumbed to hubris after such a long and successful career and blew everything up.

I just think it's funny/sad that they could have bought into just about any other RE development in Vancouver and their $140 MM would be $200 MM+ instead of taking a big loss.

doc75

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #552 on: May 01, 2019, 05:31:12 PM »
There are a number of articles out the past couple days regarding Parq.  Here's one from today.  Seems nobody is willing to say whether or not the April 30 payment was made:

https://biv.com/article/2019/05/parq-casino-future-uncertain-owner-mum-whether-it-can-service-its-debt

doc75

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #553 on: May 02, 2019, 05:33:37 PM »
There are a number of articles out the past couple days regarding Parq.  Here's one from today.  Seems nobody is willing to say whether or not the April 30 payment was made:

https://biv.com/article/2019/05/parq-casino-future-uncertain-owner-mum-whether-it-can-service-its-debt

A follow-up today:

https://biv.com/article/2019/05/parq-vancouver-defers-key-interest-payment-credit-rating-slides-selective-default

sculpin

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #554 on: May 04, 2019, 11:00:42 AM »
There are a number of articles out the past couple days regarding Parq.  Here's one from today.  Seems nobody is willing to say whether or not the April 30 payment was made:

https://biv.com/article/2019/05/parq-casino-future-uncertain-owner-mum-whether-it-can-service-its-debt

A follow-up today:

https://biv.com/article/2019/05/parq-vancouver-defers-key-interest-payment-credit-rating-slides-selective-default

 “Parq is solidly on track to close a new equity and finance package, replacing our existing development and construction financing.”

She added in a subsequent email that the company’s debt holders “support” the potential refinancing and equity package.

“We are very excited about Parq Vancouver’s future and look forward to building on the initial success of our unique and award-winning property,” she said in the first email.


Hopefully this is achieved. Along with the common equitization of the pref liability, this will go a long way to further de-risk & remove uncertainty from DC.

doc75

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #555 on: May 06, 2019, 11:32:30 AM »
Dundee will release Q1 results after market close on Friday.  The optimist in me hopes they have chosen a Friday release to ensure they can announce the Parq transaction.  The pessimist in me has followed Dundee for a while and knows better than to trust the optimist!

In other news, a whole boatload of shares hit the market next week.  It'll be interesting to see what they do regarding a repurchase plan, if anything. (Really not sure they have the liquidity to do much.)


petec

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #556 on: May 06, 2019, 11:45:43 AM »
I suspect your inner pessimist has the edge.

That said I’m looking forward to adding next week at bargain levels.
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Rod

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #557 on: May 06, 2019, 01:09:11 PM »
I suspect your inner pessimist has the edge.

That said I’m looking forward to adding next week at bargain levels.

Just to be different I'm going to bet the stock goes up next week ;)

I think the best buying opportunity may be later in the year, or even in 2020. The big stock overhang may keep a lid on the price for a long time even if the company's value is clearly rising. If I can be confident the net assets are worth at least $3 without resort to hopes and dreams regarding some of the speculative stuff like Chad, I'd be a buyer. The preferreds may see a large rise in the interim.

bizaro86

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #558 on: May 06, 2019, 02:52:39 PM »
I suspect your inner pessimist has the edge.

That said I’m looking forward to adding next week at bargain levels.

Just to be different I'm going to bet the stock goes up next week ;)

I think the best buying opportunity may be later in the year, or even in 2020. The big stock overhang may keep a lid on the price for a long time even if the company's value is clearly rising. If I can be confident the net assets are worth at least $3 without resort to hopes and dreams regarding some of the speculative stuff like Chad, I'd be a buyer. The preferreds may see a large rise in the interim.

I've got to think their recent history of an arguable coercive exchange offer and then a mandatory coversion to common at a huge discount will weigh on the prices of the prefs.

Also, I think there is a good chance that they suspend the dividend on the remaining pref issues after a tender. After they tender, it is really unlikely they'll return money to the common (dividend, etc). In that scenario, what is the upside to the Goodmans of paying pref dividends?

-they won't need to pay common dividends
-they won't be able to issue new prefs anyway
-the longer they don't pay the lower the effective interest rate on the prefs
-every dollar paid out to the prefs is no longer available for corporate priorities or executive compensation.

IMO, the logical thing for them to do is buy back some of the dilution in a tender and then stop paying the prefs. If they suspend the dividends on the prefs I think the price will tank.

bizaro86

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #559 on: May 06, 2019, 03:00:35 PM »
Another way to look at this - what rate/LTV would you charge me on capital secured by a portfolio of Canadian juniors and illiquid private stakes? The terms would be the capital is permanent, and if I miss payments you can't call it, but I promise to eventually make any payments I miss. I have the option to repay my the money at two times the initial value, but no obligation to ever do so. Assume for the purposes of this exercise that my recent track record of investing in companies like that is very poor.

That at least rhymes with the current circumstances around the DC prefs. I think people anchor on the par value, which is risky in this case.

The prefs are likely way better than the common, but at current prices I think the risk-reward is still poor.