21-03-2013, 05:48 PM
Re NAV of RMT - are'nt cos incl shipping are obliged to revise the NAV yearly to incor in the Annual Report to shareholders so that its ships, among other assets, reflects the current market value? Or is it in the case of RMT they also incor the valuable Time Charter rates of their various ships which still have many years to go in the NAV thus enhancing its NAV for yet many years to come till the lucrative TC mature?
Grateful of your knowledgeable advice on this point?
Grateful of your knowledgeable advice on this point?
(21-03-2013, 04:21 PM)d.o.g. Wrote: [ -> ](21-03-2013, 03:31 PM)greengiraffe Wrote: [ -> ]It is trading at steep discount to book value. If it is so good, the sponsors should have taken it private at steep discount.
Book value is meaningless for shipowning companies. In a boom, the ships are worth more than book. The reverse is true in a bust. That is why RM has had to negotiate a VTL waiver - because the market value of the ships is below the value required to stay within the VTL covenant.
RMT's book value is still positive. But replace the book value figure with the actual market value, and RMT's equity would be a lot lower, perhaps even negative. If RMT's true equity is negative, then of course there is no point taking it private - RM would be paying real money to buy something that is worthless. They would be better off buying physical ships on the open market.