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   Gold/Mining/EnergyHarnischfeger (HPH)


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To: John Soileau who wrote (15)6/11/1999 9:21:00 AM
From: Allan
   of 57
 
The only thing even making me look at this co. is the fact that they got killed by the Asian crisis... now that the asian crisis seems like recovering.. well then I expect this one to recover as well... or, may be it won't - it's a gamble.. we have to find out if suppliers and customer confidence in the co is still in good standing.. kinda hard for a co that filled Chp 11 but who know... Any comment?

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To: Chartgod who wrote (10)6/11/1999 12:09:00 PM
From: John Anderfuren
   of 57
 
Hey Jim, I added yesterday at 1 1/4 looking to take out equity at 2.5 and let the rest ride out the storm. The old money tree seed is planted.

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To: Allan who wrote (14)6/11/1999 3:09:00 PM
From: one putt
   of 57
 
Allan -

From what I can gather, they currently have 47.9 MM shares outstanding with 23 MM float. Their book value is over $13/share as of June 10th. What are the odds of a buyout at these prices? Would competitors such as Voith benefit buy picking up HRH?

Regards~

TP

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To: one putt who wrote (18)6/11/1999 7:02:00 PM
From: Allan
   of 57
 
$2.25 for a co. whose has $13/share book value.. Looks good to me... however still not sure about the total debt.. from biz.yahoo.com it says total debt of $1.3Billion not the $2.xxBillion mentioned here earlier - am I missing something? Which one is correct?

Thanks for clearing this up for me!!

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To: robbie who wrote (12)6/11/1999 7:04:00 PM
From: Allan
   of 57
 
biz.yahoo.com

ANALYSIS-Valmet-Rauma to gain from rival's woes
By John Acher

HELSINKI, June 11 (Reuters) - Finnish engineering group Valmet-Rauma stands to gain from the bankruptcy of its U.S. rival Harnischfeger, which could trim excess capacity in paper machinery, analysts said.

Harnischfeger Industries (NYSE:HPH - news), the mining and papermaking equipment group, filed this week for Chapter 11 bankruptcy, struggling with a shortfall of working capital and hit hard by the Asian crisis that has knocked paper industry investment.

''If you look at the long term, then it seems that one major competitor is about to die,'' said analyst Markus Larsson at Handelsbanken.

Valmet-Rauma's paper machine division Valmet has about a third of the world market for paper machines, versus one third controlled by Vienna-listed Voith Sulzer and a good 20 percent for Harnischfeger's Beloit subsidiary, analysts said.

''Valmet-Rauma and Voith are the two leading parties now,'' said analyst Mats Lindholm at Den Danske Bank.

Harnischfeger on June 1 reported a loss of $74.3 million for the fiscal second quarter, with net sales up two percent year-on-year to $488.1 million, and said on June 7 it had filed for bankruptcy reorganisation.

Its pulp and paper machinery division had a second-quarter operating loss of $24.96 million on sales of $193.79 million.

At end-April, the debt-burdened company had long-term debt of $1.1 billion and current liabilities of another $1.1 billion, against shareholders' equity of just over half a billion.

Its stock has plunged this year on the group's dire straits, with market capitalisation shrinking to a puny $66 million for a company with annual net sales of more than $2 billion.

That compares with a market cap of 1.34 billion euros ($1.41 billion) for Valmet-Rauma with 1998 sales of 3.7 billion euros.

In the first-quarter, Valmet-Rauma sank to a loss after financial items of three million euros ($3.14 million) from a pro forma profit of 46 million euros a year ago.

Though poised to reap a windfall from Harnischfeger's troubles, Valmet-Rauma too has been hit this year by low investment in pulp and papermaking machinery. On Thursday it warned on 1999 profits and announced 2000 job cuts.

Valmet-Rauma Chief Financial Officer Sakari Tamminen declined to comment on whether the company would be interested in buying Beloit.

Analysts said it was unclear whether the bankruptcy meant Valmet's archrival Beloit was now out of the game altogether.

In any case, withdrawal of Beloit from the business would not quickly end the troubles besetting manufacturers of pulp and paper machinery, including Valmet-Rauma.

Analysts said that while Beloit could vanish from the new machinery market, where it has struggled, it could live off maintenance of installed Beloit machines for years or scale back to become a niche player, if creditors kept it in business.

''I don't think it will vanish from the face of the earth,'' Lindholm said. ''In the U.S. you can go belly-up under Chapter 11 and still stay in business -- it's new tricks, old dogs.''

Valmet-Rauma will surely watch closely where the bankruptcy proceedings take Beloit, and some analysts said it could be tempted to bid for it.

''What they could gain from Beloit would be its base of machinery to rebuild in the future and its customer base for maintenance services,'' Larsson said.

But analysts agreed that Rauma-Valmet would not rush into bidding for Beloit or other parts of troubled Harnischfeger.

''I think they'll sit tight,'' Lindholm said. ''Technology-wise Valmet-Rauma has nothing to gain from Beloit, and they still have capacity themselves so they certainly don't need the extra plant capacity or staff.''

Lindholm added that in the long term Valmet-Rauma stood to gain from Beloit's possible withdrawal from the paper machine rebuilding market, where it has aggressively competed with Valmet for projects.

Competition watchdogs would furthermore be aroused by any move by Valmet-Rauma to buy Beloit because a combination of the two would create a dominant market position, especially in the United States.

A merged group would easily have a world market share of between 50 and 60 percent, and in some advanced paper machine lines the market share could climb over 80 percent in the United States, one analyst estimated.

Voith would be the only serious competitor.

Valmet-Rauma is the company being formed by the merger this year of paper machine maker Valmet and engineering group Rauma. The merger is due to take effect on July 1 and the company will be renamed Metso.

($1 equals .9530 Euro)

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To: Allan who wrote (19)6/11/1999 9:20:00 PM
From: one putt
   of 57
 
Allan -

I too read where it states that they have $1.3 billion in debt, however, the story out of Helsinki states

"long-term debt of $1.1 billion and current liabilities of another $1.1 billion . . ."

Not really sure! The article posted by robbie, also found on Yahoo!, is out of Finland, the home of Valmet. It's possible that this article is just a little slanted towards Valmet. One of my favorite lines out of the article, if I may cut and paste:

"I don't think it will vanish from the face of the earth. In the U.S. you can go belly-up under Chapter 11 and still stay in business --it's new tricks, old dogs."

IHMO, Beloit has a lot left to offer, and whether they are bought out or their debt is restructured, I'll take my chances at current prices. I picked some up (not nearly enough) yesterday at $1 1/4, and more today at $1 15/16. I'm hoping for a double or triple bagger! This is purely speculation, as the bankruptcy filing is VERY fresh and more news is bound to come out of this one. What's your position on HPH? Did you load up the boat at 1 1/2 <vbg>.

Regards~

TP

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To: one putt who wrote (21)6/12/1999 12:40:00 AM
From: Allan
   of 57
 
TP, I ONLY WISH!!! :( .. will see how things go on Monday..

Have a great weekend!

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To: one putt who wrote (21)6/12/1999 1:16:00 PM
From: robbie
   of 57
 
"I don't think it will vanish from the face of the earth. In the U.S. you can go belly-up under Chapter 11 and still stay in business --it's new tricks, old dogs."

My favorite line also. I guess they've never heard of REORGANIZATION over there. I agree the article was biased. HPH has 13,700 employees and has announced that they don't plan any layoffs....I think they plan on sticking around. Bought 1000 @ 1 5/16, looking to buy more on dips.

Robbie


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To: one putt who wrote (21)6/13/1999 4:27:00 PM
From: Mark S.
   of 57
 
current liabilities would include the 750mil just obtained. eom

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To: robbie who wrote (23)6/13/1999 4:31:00 PM
From: Mark S.
   of 57
 
chapter 11, reorganization; your right but as far as buying on dips. I think you need to take a refresher course on creditors rights. This stock is way too volatile to buy on dips. i would hope that you take profits when you could. Nobody knows how this is going to shake out. Unless the company has opportunities for "new" business, the current credit savor would be in vain.

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