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TSX Lithium explorer International Lithium Corp prepares to drill at Raleigh Lake Watch Now

TSX Lithium explorer International Lithium Corp prepares to drill at Raleigh Lake
Exclusive: Hardman & Co Investor Forum - Severn Trent, Calculus Capital, Volta Finance, Residential


Hurricane Energ Share Chat (HUR)



Share Price: 53.45Bid: 53.50Ask: 53.60Change: 0.00 (0.00%)No Movement on Hurricane Energ
Spread: 0.10Spread as %: 0.19%Open: 53.90High: 0.00Low: 0.00Yesterday’s Close: 53.45


Share Discussion for Hurricane Energ




View all HUR Messages

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wellwell
Posts: 6,284
Opinion:No Opinion
Price:53.25
RE: Whats going on !!
Wed 20:58
It's 9pm.
 
adoubleuk
Posts: 9,792
Premium Chat Member
Opinion:No Opinion
Price:53.25
RE: Whats going on !!
Wed 20:47
Wellwell,

"Nope. Wrong again."

Isn't it past your bedtime? I thought I was the nighthawk here.
wellwell
Posts: 6,284
Opinion:No Opinion
Price:53.25
RE: Whats going on !!
Wed 20:35
Nope. Wrong again.
adoubleuk
Posts: 9,792
Premium Chat Member
Opinion:No Opinion
Price:53.25
RE: Whats going on !!
Wed 20:28
SotB, me ol'jumpin' bean, you!

"You can shut your puss as well SotB." (quoth Wellwell)

Ah dinna ken i' wellwell abodes in ta granite city. But it sounds like he hails fra Glasgae.
Thedriver
Posts: 342
Opinion:No Opinion
Price:53.25
RE: Whats going on !!
Wed 20:19
The street can be very spiteful bb this one,I was accused of being you a few days back,you much brighter than me I'm just a driver.
Biffadog
Posts: 885
Opinion:No Opinion
Price:53.25
RE: Whats going on !!
Wed 19:18
Thanks casapinos. Sounds about right.

I'll do a bit of homework on this point and will post findings in due course.
casapinos
Posts: 944
Opinion:No Opinion
Price:53.25
RE: Whats going on !!
Wed 19:05
HI BIFFA I think i may be wrong(but i'm too far down a bottle of red to be sure!!!)
just checked the RNS of 30/06/17
and my recollection is based on this:
The Company will have the option to redeem all, but not some only, of the outstanding Bonds:

· "at any time on or after 14 August 2020 at par plus accrued interest if the value of the Ordinary Shares underlying a Bond (calculated over a specified period) shall have been at least US$300,000"
and
As the bonds are issued in blocks of $200k that means a 50%premium(to the conversion price) I now think that HURs right to buy back is at 60p not 48p but it needs more arithmetic competence than i currently have available!!
Nonetheless At the current SP and prospective rise I think the likelihood of HUR buying back any outstanding CB's with revenue is quite high
wellwell
Posts: 6,284
Opinion:No Opinion
Price:53.25
RE: Whats going on !!
Wed 18:23
Wot you rote:
“Furthermore, and something which a lot of people seem unaware of or have forgotten is that monies from the last share-raise were put in escrow to cover eventual redemption of the bonds. So the company remains essentially debt-free."

And you are now trying to say I’m wrong! ****.
Biffadog
Posts: 885
Opinion:No Opinion
Price:53.25
RE: Whats going on !!
Wed 18:21
Hi casapinos,

Nice detailed explanation of the workings of the CBs. Thanks.

I just wanted to clarify one point that you have raised for my own benefit.

Are you saying that HUR can buy out the CBHs at 48p, once the SP is over the 48p threshold and that HUR will only be required to pay 48p, even if HUR's SP at the time is say 80p ?

I assume this is the case, hence your comment about the CBHs running the risk of being taken out at 48p.

FWIW not one single CBH has exercised the equity conversion option to date, which as you quite rightly say, is a big vote of confidence in HUR.

I wish I was being paid 7.5% to wait it out mind.

GLA.
Sonofthebull
Posts: 1,906
Opinion:No Opinion
Price:53.25
RE: Whats going on !!
Wed 18:20
You’re just a bit of an arrogant knob really aren’t you-if only you could see it. You made a mistake earlier and you’re completely unable to admit it and now you’re trying to turn it around. Shame. We need more honesty not more deflection.
———————-////
There you have the boiler room tactics..... Wellwell saying he lives in Aberdeen...... Don’t think so !
wellwell
Posts: 6,284
Opinion:No Opinion
Price:53.25
RE: Whats going on !!
Wed 18:15
You’re just a bit of an arrogant knob really aren’t you-if only you could see it. You made a mistake earlier and you’re completely unable to admit it and now you’re trying to turn it around. Shame. We need more honesty not more deflection.
adoubleuk
Posts: 9,792
Premium Chat Member
Opinion:No Opinion
Price:53.25
RE: Whats going on !!
Wed 18:06
wellwell,

it's you that's talking nonsense.

neither the bondholders nor shareholders want their 'loan' back. they want a significant profit!

never forget that oil companies aren't in the business of providing energy to the world. they're in the business of making money.

the 'trick' is to have fun while doing so. and despite the assorted risks and dangers, drilling oilwells can be fun if you like that sort of thing. hence Dr T's grin...
casapinos
Posts: 944
Opinion:No Opinion
Price:53.25
RE: Whats going on !!
Wed 17:04
Dive The CB holders are in the same boat as us - they do not know whether and by how much the SP may rise, in the meantime of course they are collecting 7.5 % pa so are being paid to wait.
But IIRC HUR can buy them out above 48p when they have the cash, so as time and HURs income accrues they must make a decision, convert and hold while the SP rises , or risk being taken out at 48p.
My only insider knowledge is that most hedgies take assured profits and move on to the next near-certain winner rather than hold indefinitely, so as a guess only, I expect there to be very few Cb's( maybe none) still held by end 2020.
DiveCentre
Posts: 756
Premium Chat Member
Opinion:No Opinion
Price:53.10
RE: Whats going on !!
Wed 16:21
adoubleuk

As far as I am aware the CB's can be traded. Not perhaps by the likes of you and me but by deep pockets. This is why they could be used to stake build without having an immediate impact on the sp. This is my understanding and I'm happy to be corrected if wrong.

Casapinos

Assuming the sp remains above the conversion price when do you expect the CB holders to convert?

When HUR have enough cash in the bank which is not commited to developement they will be in a position to redeem, but surely the CB holders would want to anticipate this and convert.
wellwell
Posts: 6,284
Opinion:No Opinion
Price:53.25
RE: Whats going on !!
Wed 16:16
AK either stop drinking before you post again, or keep drinking and stop posting as you’re talking nonsense.

Maybe this will help:
Q. What was the fund raise for?
Remember the 40% dilution? Well that didn’t raise all the money to pay for the EPS stuff-you know hardware and services. The rest of the CASH came from those who took up the bonds. They’ll want it back. Like a bank does on a loan.
Moonlanding
Posts: 381
Opinion:No Opinion
Price:53.10
RE: Whats going on !!
Wed 16:13
Saving not Sabrina whoever she may be!!!
Moonlanding
Posts: 381
Opinion:No Opinion
Price:53.10
RE: Whats going on !!
Wed 16:12
Hurricane has the right to buy back all the convertible bonds in August 2020.I suspect they will do this and shouldn’t have a problem raising a bank loan to cover some of the purchase cost as they will by then have been producing revenue for over 15 months.In addition I would expect the loan interest to be below 7.5% and do Sabrina the company several million pounds per annum.
casapinos
Posts: 944
Opinion:No Opinion
Price:53.15
RE: Whats going on !!
Wed 16:05
The CB's have several benefits to the issuer, first they provide cash upfront without immediate SP dilution, second the coupon on the CB's is likely a little lower because buyers are able to construct "no loss " positions by utilising shorts to hedge the downside and third they are predicated on the possibility (probability?) that they will be paid off, not in cash but in shares which have risen in value during their term.
In Hurs case , the fact that the conversion price is 52 cents(about 40p)and many are still unconverted is positive, it means that CB holders don't expect HUR to fail and do expect the SP to rise further.
I also think that , HUR may well be financially in a position to either redeem the shares for cash, either on the basis that the SP has held above 48p(see terms) or in lieu of shares well before the expiry date in 2022.
IMV the CB issue has proven to be sound business for HUR
Apols if grammar or recall is flawed , using my mobile for this from darkest Devon!!
adoubleuk
Posts: 9,792
Premium Chat Member
Opinion:No Opinion
Price:53.00
RE: Whats going on !!
Wed 15:59
extrader,

yes, might not have the moolah today to 'redeem' the bonds, but that's not the deal. if the bondholders want to 'exchange' their bonds into cash, they either have to wait until 2022, or convert them into shares and sell those.

this is why holding the bonds is just like 'owning' the cargo of a ship, rather than the boat itself.

and wellwell claiming that the existence of the cb's is like a bank loan is utterly facile. and wrong. never mistake 'cash' for the thing it may represent at any given moment, be it goods, commodities, services rendered, or whatever...

in a strange way, cash doesn't exist. but run out of it, usually. go figure.

yrs from the café terrace, hence possible typos...
Biffadog
Posts: 885
Opinion:No Opinion
Price:53.25
RE: Whats going on !!
Wed 15:59
CBs are debt. They are treated as debt on the balance sheet. Fact.

They are just a slightly more intricate type of debt than a straight bank loan.

With regard to paying the coupon (interest), it's important to bear in mind that the EPS is producing significant quantities of oil and with an estimated 500M barrels available, the debt can be easily covered, even if the flow rates drop back faster than expected. It's not binary at this stage.

Obviously, what we are all hoping for is that flow rates remain strong over time and no other issues are encountered but even if production drops off rapidly, there is still plenty of scope to cover this level of debt.

At this stage in the game, it's safe to say that debt is not an issue for HUR.

GLA.
mrmisterfox
Posts: 63
Opinion:No Opinion
Price:52.95
RE: Whats going on !!
Wed 14:45
So depends on share price at time of conversion... Yep...
wellwell
Posts: 6,284
Opinion:No Opinion
Price:53.10
RE: Whats going on !!
Wed 14:43
If you have a bank loan or a mortgage you pay interest. You keep paying that until the loan is paid off. It’s a debt. If you don’t pay it they’ll seize your house.

The CB’s are no different except the capital amount remains the same $230m and all along the interest must be paid. It’s a debt.

They loaned HUR $230m and they’re going to want it back one way or another and ultimately that means seizure of the COMPANY and it’s assets if the debt isn’t paid off or continues to be serviced. Not an unusual situation but it’s still debt.

So they are not in peachy lala debt free land.
extrader
Posts: 1,003
Opinion:Hold
Price:53.05
RE: Whats going on !!
Wed 14:38
Hi adoubleuk et al,

I think that the root cause of the misunderstanding over C/B cover - or lack thereof - is equating solvency with liquidity.

We believe that HUR will have the cashflow in future to meet its C/B obligations (and then some !) , but it evidently doesn't today. Its assets - actual AND prospective - exceed its liabilities (ditto), we believe. What we don't have is the moolah today to redeem the C/Bs, but that 'doesn' 't matter, because they're not due yet.

Hope this helps turn heat into light.

ATB
adoubleuk
Posts: 9,792
Premium Chat Member
Opinion:No Opinion
Price:53.05
RE: Whats going on !!
Wed 14:34
BlooBird,

"One thing that I've always respected you for is, that in the past, you are ready to admit when you are wrong.
Why not this time ? Biffadog is right.

Why raise money by selling bonds and paying interest and then stick the money in escrow ?"

OK. Maybe I'm halfway wrong, but not sure I'm so entirely. But correct me if I'm 100% wrong.

My understanding of the situation is as follows.

At the fundraising, the CB's were issued (sold), and money was put in escrow to pay the interest. Wellwell says this was only for two years. Maybe he's correct in this, I can't be bothered to go check.

So that covers the time between the fundraise and going to income-producing production, which will very easily cover further interest payments.

Now then, why did the bondholders buy the bonds, instead of outright stock? Easy. Because they reckon that within the timespan, the stock will be worth enough to 'convert' into, and even if it isn't, they'll be getting their interest payment. It's a bet, if you like. Covered, maybe, through arbitrage shorts, just to protect their arse if the stock falls.

But having bought in, the bondholders are betting on exactly the same thing as the company itself. That being that the assets have a value which will be eventually realised ('monetised'), so either the bonds can be bought back with monies accrued in the company's coffers come the date, or converted to shares and sold as such.

This is no different to having money invested in the cargo in a ship's hold, even if the ship's still at sea.

People really ought to re-read that old 'O' level classic, 'The Merchant of Venice'. There are two different kinds of investor. Those who have shares in the ownership of the ship and its profitability, and those who have invested and put an upfront payment on the cargo itself. Repayment of which is of course dependent upon the ship safely making port.

Of course, if the ship sinks, everyone loses, but that's the name of the game. The CB holders have 'insured' themselves (or 'the cargo') with their shorts, the others have to simply hope there's something left over to salvage.

The CB's do not represent 'debt' as such, to my mind.

Of course, I may be wrong. But I also think it's a matter of opinion and semantics. The cargo's in the ship's hold, after all. Whereas 'debt' is the equivalent of borrowing money to get your ship back home but running empty.
BlooBird
Posts: 423
Opinion:No Opinion
Price:52.85
RE: Whats going on !!
Wed 13:58
adoubleuk you wrote:-

"Furthermore, and something which a lot of people seem unaware of or have forgotten is that monies from the last share-raise were put in escrow to cover eventual redemption of the bonds. So the company remains essentially debt-free."

One thing that I've always respected you for is, that in the past, you are ready to admit when you are wrong.
Why not this time ? Biffadog is right.

Why raise money by selling bonds and paying interest and then stick the money in escrow ?
That's almost as stupid as borrowing £14 Billion and then giving it away in foreign aid !




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