Sampson Holds 50% Interest In Harmac

Debenture Conversion Yields Nearly 50% Ownership

The local daily is reporting that Harmac's saviour, the Sampson Group has converted debentures into shares, giving the group almost 50% of the once defunct mill.

You may recall that the closed mill was bought out of bankruptcy for $13.5 million which included employees kicking in $25,000 each for a 25% ownership stake in the company. Several other investors, including the Sampson Group, came up with the rest.

Fortune would seem to have smiled on the mill since the new ownership resurrected it and like the Phoenix rising from the ashes, once again the signs of prosperity can be seem rising from the stacks at the mill.

The article goes on to praise the Sampson group for their faith in the mill and the employees and how they have guided the company through the perilous economic times of late. They didn't mention an earlier story which pointed to a sharp demand for their product in China which had pushed world pulp prices to record highs. They also don't mention the fact that given the original deal was for $13.5 million and the Canadian taxpayer kicked in approximately $25 million for upgrades, the biggest shareholder by far, should be the Canadian taxpayer.

Just a quick, very rough calculation of the return to the Sampson Group, assuming the $13.5 million and the $25 million now represent, real value at the mill, it would now have a value of $38.5 million. A 50% ownership stake would then be worth $19.25 million, and if the original investment by the Sampson Group was 50% of the $13.5 million their original investment of $6.75 million, would now be worth $19.25 million.

Since as pointed out earlier, the Canadian taxpayer has nearly twice as much money in the mill as it was originally worth meaning we should own about 66% of the mill I wonder when we might expect our dividend??