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you too mate, only one thing is i am worried keep Southend airport open .
Hi Volcano - it's been a great run up from the March 2020 crash , when so many excellent companies were dragged down with the covid worries, to bargain prices, I was like a kid in the sweetie shop lol.
I've come out of a few, over recent weeks. but am keeping quality exits on my priority watchlist, for cheaper re entries.
Been watching HOC and FRES, particularly the HOC drop - not sure the election result worries will have a major impact, as some are posting.
PM's been hit hard the last week or so, agree HOC at low 1.60's is looking compelling. not a lot wrong with its April Q1 2021 Production Report.
FED comments spooked the market.
I missed the bottom this week with FRES, so maybe worth seeing how PM 's open on Monday, a little dabble on HOC may well be in order next week.
Should be fun and games here with ESKN between now and the end of the month. Got the YR end report, maybe an equity raise, and more info on the potential Carlyle bond.
Have a great weekend mate , time to get ready for the footie.
G
and i think it is time to trade HOC
Hi Gerry,
i don't know if it is to early but i am going back to cash for now ,markets must have a correction soon ?
i like to keep what i have earn so far .
An equity raise at 20p say ( or lower ) will create loads of confetti.
The RNS says a modest equity raise may be needed. Only 10 trading days till the end of June, by which time the YR21 accounts are due to be released.
Expect news soon on the Carlyle bond / revised banking facilities / equity raise requirements very soon.
Gla
G
Would the fact that Southend Council (SBC) are the freeholder of LSA inhibit Carlyle's possible future ambitions to close LSA and build a housing development on the site? If they could buy the freehold from SBC it seems more straightfoward but that's surely not a certainty.
Birddog - that could well be the case.
Looks like part or all of the Bank funding will be replaced by Carlyle funding under the proposed new bond.
If that goes through will the Banks extend any replacement borrowing, secured on the remaining assets in the group ?
If not then the Energy Division future earnings will need to be sufficient to cover both the ongoing airport costs, and the SA liabilities when they fall due.
It's all a bit muddy here, from the info provided to date. Sure it will become clear soon enough.
Gla
G
Hi Gerry / TF - good analysis there.
With LSA essentially mortgaged there is a real risk that the mortgagee, in this case Carlyle, will look to recover their funds by way of sale in the event the business itself (LSA Co. Ltd) cannot maintain the debt obligations. I can see Carlyle taking more and more slices of the airport until it owns it outright. Then it will be either sell it as a going concern or to the circling vultures for development. There's a lot of real estate there, in a commuter sweet spot with a station straight to the City on it's doorstep. I guess the council have the last word though, but I'm sure the revenue a new development would bring in would certainly be attractive, especially post pandemic.
Should all become clear over the next few days.
Good luck to all holders here
G
My last post was just me throwing out some thoughts and figures.
If TOSCA are sitting at an average - bet 70p - 75p - they would need a market cap of crica £450M to stand any chance of disposing of their shareholding at cost ( assuming there are buyers out there).
What do PI's think they'll do ?
Any thoughts on how that value could be justified ? Either on cashflow, NSV , growth or perhaps sentiment ?
Still could be fun for trading though, a quick in and out maybe.
Gla
G
I'm guessing the present banking facilities are secured by debentures. If the Carlyle bond goes through, ring fenced to LSA, then the banks will have to release their security here to allow the bond to be completed. If so they'll probably expect repayment of present borrowings The RNS confirms that ESKN has used up £10k of facilitty B - therefore I assume the £80M facility A is fully drawn at £80M.
Looks like the banks are backing out, here. How much of the bond funds will be left for cashflow commitments ?
Under the 2020 aborted airport funding, the airport could then have been valued at circa £800M now its a lot less, or another way of looking at it is that shareholders are releasing 30% of the previous valuation for (£240M ) for £100M of survival cash, and £20m of Carlyle costs. Emmm.
Looking at it from the BOD's prospective - Beggers can't be choosers.
How do existing shareholders value this ?
On the negatives we have :
- Previous £50M bond
- Bank debt or new Bond - £100m
- 82M of SA liabilities for YR 22 - YR 24
Assets
- Energy Division - value - perhaps still £200M
- LSA - likely to be 70% ( value ? )
Cashflow - Energy Division hopefully returning positive, Aviation - unclear
What will TOSCA do now? Agree TF / Birddog its likely to go private.
Birddog - LSA will continue and develop as a project, as to who will own it long term - that's less clear.
gla
G
Beggers can't be choosers.
They keep borrowing money and selling off various assets, or parts of assets.
The reality is though that it is cash generation from operating profit that needs to happen. Since STOB / ESKN have owned Southend Airport it's always lost money - and quite a lot too.
This is only going one way now in my opinion. ESKN will be broken up, with the individual entities either being taken into private ownership or liquidated.
I truly hope that Southend Airport has a future. If ESKN laden it with too much debt so they can service debt from other divisions the only way out will be via property developers which would be a crying shame and wholly unnecessary.
Looks like the deal will be structured as a bond that converts into equity over a period of several years which is potentially better news for investors.
https://www.google.com/amp/s/news.sky.com/story/amp/stobart-air-owner-to-raise-120m-from-airport-stake-sale-to-carlyle-12332403