REEF.W19 really?

CITK has 8M negative cash balance. Waskaduwa has 11M only.Do you think they can construct Waskaduwa from 11M.

Warrant conversion also coming,they have real problem with cash.

quote="npp"]
But looking at the financials, it's subsidiaries have their own money to build the hotels, which after completition should add to the group's revenue.
[/quote]

well you have to look closer. I don't know why cashflow statement does not tally with the balance sheet but they have positive cash+fixed deposits which can also be considered 'cash'
They (CITK) also have a large stake in CLND which is worth around 1.4bn rupees. So it's not that they are struggling for cash, but they have loads of it. Further CITK also has a very comfortable debt/equity ratio.

CITW also has a huge amount due from related parties and NO debt, so again, it will not be hard to find cash.

Only concern for me is that most of the amount due to both CITK and CITW is from the parent REEF. Now the failed warrant conversion will affect that in a big way since the amount is almost 1bn rupees. The amount foregone by the W18 non-conversion is 943m. Anyway, it's not that even the parent company too is struggling for cash

Btw, the amount that could be raised by the W19 conversion in 2015 is 2.5bn

I hold no REEF.N, but only REEF.W19

These points are not in favor of REEF but just to make the point that the group is in no immediate risk of not having cash

I also dont know why.But normally cash & cash equivalents reflect in cash flow.last year b/s figure was tallied with cash flow balance.

According to cmv of CLND it is worth 1.4Bn. Problem is whether it is cash realizable or not in short term to mid term.Current NAPS is 18.25,CLND running at loss.Who is going to buy this loss making company at least above 30.Initial cost of Investment was around 30 after transferring 10% stake from Reff to citk at 40.

What REEF did they have brought 10% of CLND at 20 & transferred to CITK at 40.only one thing they can do now transfer CLND stake to another company from CITK at profit.

Hikka IPO failed,w conversion coming..... construction of CITW,CITK not properly started.yes no doubt they are running out of cash.

Do you think that REEF can transfer 900M to Wskaduwa immediately no...at leat they need another 2-3 IPO's.

npp wrote:well you have to look closer. I don't know why cashflow statement does not tally with the balance sheet but they have positive cash+fixed deposits which can also be considered 'cash'
They (CITK) also have a large stake in CLND which is worth around 1.4bn rupees. So it's not that they are struggling for cash, but they have loads of it. Further CITK also has a very comfortable debt/equity ratio.

CITW also has a huge amount due from related parties and NO debt, so again, it will not be hard to find cash.

Only concern for me is that most of the amount due to both CITK and CITW is from the parent REEF. Now the failed warrant conversion will affect that in a big way since the amount is almost 1bn rupees. The amount foregone by the W18 non-conversion is 943m. Anyway, it's not that even the parent company too is struggling for cash

Btw, the amount that could be raised by the W19 conversion in 2015 is 2.5bn

market bull wrote:I also dont know why.But normally cash & cash equivalents reflect in cash flow.last year b/s figure was tallied with cash flow balance.

According to cmv of CLND it is worth 1.4Bn. Problem is whether it is cash realizable or not in short term to mid term.Current NAPS is 18.25,CLND running at loss.Who is going to buy this loss making company at least above 30.Initial cost of Investment was around 30 after transferring 10% stake from Reff to citk at 40.

What REEF did they have brought 10% of CLND at 20 & transferred to CITK at 40.only one thing they can do now transfer CLND stake to another company from CITK at profit.

Hikka IPO failed,w conversion coming..... construction of CITW,CITK not properly started.yes no doubt they are running out of cash.

Do you think that REEF can transfer 900M to Wskaduwa immediately no...at leat they need another 2-3 IPO's.

npp wrote:well you have to look closer. I don't know why cashflow statement does not tally with the balance sheet but they have positive cash+fixed deposits which can also be considered 'cash'
They (CITK) also have a large stake in CLND which is worth around 1.4bn rupees. So it's not that they are struggling for cash, but they have loads of it. Further CITK also has a very comfortable debt/equity ratio.

CITW also has a huge amount due from related parties and NO debt, so again, it will not be hard to find cash.

Only concern for me is that most of the amount due to both CITK and CITW is from the parent REEF. Now the failed warrant conversion will affect that in a big way since the amount is almost 1bn rupees. The amount foregone by the W18 non-conversion is 943m. Anyway, it's not that even the parent company too is struggling for cash

Btw, the amount that could be raised by the W19 conversion in 2015 is 2.5bn

Please note they can go for Debenture Issue, which will be mutual benefit for their bosses affliated banks.

market bull wrote:I also dont know why.But normally cash & cash equivalents reflect in cash flow.last year b/s figure was tallied with cash flow balance.

According to cmv of CLND it is worth 1.4Bn. Problem is whether it is cash realizable or not in short term to mid term.Current NAPS is 18.25,CLND running at loss.Who is going to buy this loss making company at least above 30.Initial cost of Investment was around 30 after transferring 10% stake from Reff to citk at 40.

What REEF did they have brought 10% of CLND at 20 & transferred to CITK at 40.only one thing they can do now transfer CLND stake to another company from CITK at profit.

Hikka IPO failed,w conversion coming..... construction of CITW,CITK not properly started.yes no doubt they are running out of cash.

Do you think that REEF can transfer 900M to Wskaduwa immediately no...at leat they need another 2-3 IPO's.

npp wrote:well you have to look closer. I don't know why cashflow statement does not tally with the balance sheet but they have positive cash+fixed deposits which can also be considered 'cash'
They (CITK) also have a large stake in CLND which is worth around 1.4bn rupees. So it's not that they are struggling for cash, but they have loads of it. Further CITK also has a very comfortable debt/equity ratio.

CITW also has a huge amount due from related parties and NO debt, so again, it will not be hard to find cash.

Only concern for me is that most of the amount due to both CITK and CITW is from the parent REEF. Now the failed warrant conversion will affect that in a big way since the amount is almost 1bn rupees. The amount foregone by the W18 non-conversion is 943m. Anyway, it's not that even the parent company too is struggling for cash

Btw, the amount that could be raised by the W19 conversion in 2015 is 2.5bn

my argument is this,

warrants are options, quite different from rights. A company cannot expect an option to be totally exercised and expect to utilised those funds in a specific project. Unlike in a rights issue where the issue price is given depending on the prevailing market price and the objective of the issue is clearly stated.

So the failure of the rights cannot be blamed if REEF run out of cash.

There would have been a reason behind having that stake in CLND rather than having as cash. We can find out in the future as to what they are trying to do. But of course, considering their gearing, I don't think that it is a bad position and borrowing from external parties is a possibility.

I too said that finding the 900mn is a concern, but in my books, it is not a serious threat at the moment. We'll wait and see how things are in the next reports for these companies.

Btw, REEF needs cash - true, if not they wouldn't have revived the W18 warrant conversion.