Greg GuichonFording Canadian Coal Trust (Inc Trust)FDG.UN.TOWEAK BUYSep 09, 2005
Payout ratio of about 85/90% after they've paid their CapX. Coal price is negotiated once a year and the risk is that you don't know what the price wil be next year. Have to watch what's happening in China. If their growth rate stays where it is, then prices should remain high.
Being acquired by Teck Cominco (TCK.B-T). If you are holding this in a taxable account, there are some very negative consequences. In an RRSP or RIF you can avoid the tax consequences. He sold the majority of his holdings into the market prior to the transaction.
Being acquired by Teck Cominco (TCK.B-T). Arbitrage companies were forced to sell. There is a financing gap and Merrill Lynch (MER-N) is part of that, so the market is concerned. The deal could fall apart.
If held in an RRSP, you could continue holding. If it's in a taxable account, consider selling the units before the new deal gets done. Take it as a gain as opposed to the tax treatment that will supposedly come on the consummation of the deal. (Editor’s note. Check with your broker.)