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I just took another quick look at RMT. Here's another way to look at it....
The trust has US$725 million of committed revenue in the next 5 years (on average) of which I have assumed that 562 million will become free cashflow (using the last financial report expenses as a guide). I have assumed no defaults - a not unreasonable assumption given the "stress test" on the charterers in the last financial crisis.
The trust has 609 million of debt, taking out the 49 million convertible loan, which I assume is converted fully.
Then I assume that in 5 years time (on average), the fleet is worth only 60% of its depreciated NAV (depreciated in a straight line with zero value in 25 years), then I get a 528 million valuation on the fleet. I justify the 60% from RMT's IPO prospectus which has shipping rates fluctuating by as much as 30+% in a shipping cycle.
In total I end up with a net amount of 480 million into 558 million shares (including the converted shares) and a value per share of 86 US cents per share or about a dollar SGD. (no discounting was applied).
In other words, if I assume that all committed revenue is received, the convertible loan is fully committed, and we are in a fairly major shipping recession in 5 years time, I still end up with about a dollar per share in value. Other safety margins could still be applied on top of this depending on your view.
The trust has US$725 million of committed revenue in the next 5 years (on average) of which I have assumed that 562 million will become free cashflow (using the last financial report expenses as a guide). I have assumed no defaults - a not unreasonable assumption given the "stress test" on the charterers in the last financial crisis.
The trust has 609 million of debt, taking out the 49 million convertible loan, which I assume is converted fully.
Then I assume that in 5 years time (on average), the fleet is worth only 60% of its depreciated NAV (depreciated in a straight line with zero value in 25 years), then I get a 528 million valuation on the fleet. I justify the 60% from RMT's IPO prospectus which has shipping rates fluctuating by as much as 30+% in a shipping cycle.
In total I end up with a net amount of 480 million into 558 million shares (including the converted shares) and a value per share of 86 US cents per share or about a dollar SGD. (no discounting was applied).
In other words, if I assume that all committed revenue is received, the convertible loan is fully committed, and we are in a fairly major shipping recession in 5 years time, I still end up with about a dollar per share in value. Other safety margins could still be applied on top of this depending on your view.