Greg GuichonFording Canadian Coal Trust (Inc Trust)FDG.UN.TOBUYOct 21, 2005
Coal price is fixed once a year in the spring. Price is now about $120 per ton which is up from $30. At this point you don't know what the price f coal will be. This will depend a lot on China and the economic activity going on there. Feels it is still going to be strong. Feels the yield will stay at 12%.
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.)