Traders Cooperative

[Joe Stocks]

Bot ALIN-A and ALIN-B preferreds. Special situation and risky. Divindends suspended. This may take several years to pay out. In the mean time dividends accrue. Note due in 2023. A bit iffy that ALIN defaults. ALIN is now privately held. ALIN is now owned by Brookfield Business partners.

Looks like a good earnings report. So, backing out the non-cash impairment charge of $116.4mil they would have had net income of $28.5 mil? 9% net profit adjusted? Is that correct? Preferred payment runs about $8mil per quarter. I understand they need consent from secured PIK notes lender to pay out a dividend. Dividends accumulate.
July 21 presentation looks interesting.
https://cms.alterainfra.com/wp-content/uploads/2021/07/Q2-21-ER-Presentation.pdf

I am very much intrigued by a buy here. Bought A's and B's with average cost of $3.56 and $4.02 on the B's. Now less than 1% of port as I still evaluate and digest the risk. Usually a PIK loan would have me thinking BK filing and a bondholder trying to steal the company. But with ALIN being privately held by Brookfield Business Partners et al., and from what I understand the PIK note is also held by same, I don't see much benefit or possibly of ALIN going bk. I assume the ships are collateralized. So, no benefit there. Brookfield certainly did their due diligence before buying. And with adjusted EBITDA of $165.8 million in the fourth quarter of 2021 it would appear business is not that bad. I know that the big headline loss may be scaring some away, but a good part of that was a non-cash impairment charge. I don't see much benefit for ALIN to defer the dividends on the preferred for a lengthy time as the divy accumulates. I see the preferred owners and BBP somewhat aligned in the future of ALIN. I am a patient investor. I accept the 1% risk and prepared to wait this one out for years. If they were to defer the B's for years and then settle up, and they returned to par, that would be a 70% annualized return - 750% total return approx.
Saw this headline today. "Six North Sea #oil and #gas fields are set to be given the green light this year, The Telegraph" I believe AFIN has at least about 12 vessels in the North Sea.

Fitch Rating notes of Sept 2021.
https://www.fitchratings.com/research/corporate-finance/fitch-upgrades-altera-infrastructure-lp-idr-to-ccc-following-exchange-offer-expiration-03-09-2021