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Good little write up done by Mullen Groups CEO and Chairman Murray Mullen in this years Chairmans Message to their unitholders. Thanks Fairfax and Prem for there support and are pleased to have them as long term investors. Quick little read. I am sure that Prem loves the decentralization of the Mullen Group, much like Fairfax is run!



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The debentures that Fairfax purchased bear 10% per annum(payable quarterly) and are convertable at $10.73.... Prem and team sure are working wonders with that float!!


You are right Uccmal that it is a A-1 company with very knowledgeable people on the board with tons of experience in the industry(Example- Pat Powell- His Bonnett Energy Services might try hitting up Fairfax as well!!?). Living in the area, and knowing many of the companies that it owns, I am quite familiar with the company.


A small example is one company that they purchased a year ago in R.E Line out of Coleville, Saskatchewan. This company likes to own the trailers instead of the truck as there are much better returns, and they let the owner operators own the truck, run the wheels off it, spend there time going to work everyday and essentially in the end make very little money, with R.E line making boat loads of the trailers that take quite a long time before repairs. The reason they can do this is due to a small moat that they have in the area, as it is to a degree a 'club' that you have to be accepted into when a person is talking about the oil and gas industry. R.E line gets numerous different contracts and owner-operators are forced to work under them if they want guaranteed work, or they can go about it on there own which can be more rewarding, but is difficult for most(Safety standards, finding work, getting buried by old employers,etc).


Just a small example but something that is not well known in my opinion is the high rates of return that can be earned in this field, and the niche moats that people have developed over many years of hard work.Almost like a mafia type situation out there(Alot of consultants in bed with friends as well.. not good to see but reality) Alot of goodwill on the books, but this is again due to the high rates of returns for various different subsidaries. Boom, bust type industry that debt can kill you in though so have to be aware of that.


Not sure if Prem invested in the equity at all, but the investment in a solid company that will pay it's bills(barring a complete melt-down)at 10%, and convertable is what I like to see!! If we want oil and gas, fluids got to be removed from tanks and hauled, etc, etc so should be able to keep decently busy.


Just a quick two cents on the company for whatever it's worth!





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