Miller Energy Resources Inc. (OTCMKTS:MILL) Is Not Bankrupt Yet
Miller Energy Resources Inc. (OTCMKTS:MILL) managed to add 71.43% to its market value yesterday, as news hit the web that its management team does not intend to file for bankruptcy, after being de-listed from the NYSE and ending up on the OTC Markets’ pink tier.
As reported by KnoxNews, company CEO Deloy Miller has advised that “no one else should count us [MILL] out” yet. Investors were obviously convinced by the talk of “arrangement with an Alaskan strategic partner that would provide sale/lease-back financing for the company’s rigs”, but what really caught their attention was most likely the private financing source that is to provide MILL with a $165 million loan, so that it could pay off its debt.
And MILL definitely could use the money, what with its latest financials looking like this:
- Cash – $2.23 million
- Current assets – $119.98 million
- Current liabilities – $109.14 million
- Quarterly revenues – $20.27 million
- Quarterly net loss – $152.26 million
Truth be told, such sights aren’t all that uncommon on the OTC Markets lately. Many otherwise respectable NYSE companies have suffered similar fates, on account of what Bloomberg calls the “worst commodities slump in more than a decade”. Alpha Natural Resources, Inc. (OTCMKTS:ANRZ) is just one recent example – although, unlike MILL, it appears that ANRZ does not have convenient private financing sources to bail it out.
Still, even though said loan may seem like a lucky break for MILL, investors would do well to remember that the harsh market conditions that caused the company’s fall from grace are still at hand. When it comes right down to it, MILL was de-listed from the NYSE because of failing to maintain an average market capitalization of $15 million, which is the direct result of the company’s failure to make a profit in recent quarters.
Since it doesn’t seem like the situation on the petrol market is about to become less oppressive for companies of MILL‘s scale any time soon, MILL‘s main problem will probably endure for the foreseeable future.
Needless to say, that will not be good for investor value – a fact that should be taken into account before loading the boat with MILL shares. Further, investors may want to wait up for the financial report that the company delayed before making up their minds on MILL, as it will probably have a profound impact on the ticker’s position and direction once it finally hits the web.
