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"M21 do the same hedge funds that shorted the equity still hold the stock or have they sold on to funds?"
Flyinghorse.
Four sold out in the rise to 302p one sold out through Private Treaty and two still hold. Lansdowne Partners & Sothic Capital Management
Mikey,
the 10% Guaranteed New Notes ($100M issued Oct-2016) have several Conditions associated with their issue.
For example, and concerning the incurrence of additional debt:
4. Covenants
4.1.iv The the date of such Incurrence and after giving effect thereto on a pro forma basis the Consolidated Net Leverage Ratio does not exceed 3.50 to 1.00.
With relatively high current EBITDA and current low debt that's not an issue however.
The only Covenant was ever placed was in July 2013 and was the BER Covenant (book equity ratio) which was "removed" by Consent as announced by RNS on the 8th April 2015.
https://ir1.q4europe.com/asp/ir/GulfKeystone/NewsRead.aspx?storyid=13136338&ishtml=1
today announces that it has successfully completed the consent solicitation to remove the book equity ratio covenant from the Trust Deed constituting the Notes and from the Conditions contained therein (the "Consent Solicitation").
Holders representing over 89% of the principal amount of Notes outstanding participated in the Consent Solicitation, with over 99% of votes cast in favour of the Proposed Amendments. The Extraordinary Resolution was therefore duly passed at the noteholder meeting which took place at 2.00 p.m. (London time) on 7 April 2015, and the Proposed Amendments have been implemented.
Is that what goes for an argument Mikey?
I'm not Paul. I don't even know who he is, but I do know you're attempting to insult me.
Well here's the thing.
I'm not necessarily right about any of this.
All I've done is to put together the available facts and made some sense of them.
I'm perfectly relaxed about being faced down by a stronger counter argument.
All I ask is that it's fact based.
So why don't you do that instead of behaving like a small child with a slapped arse.
Idiot.
Okay Paul
Mikey,
I've read the papers relating to that link, and the 2015 Consent Solicitation appears to relate to a particular approach which later fell through.
Also, I note that that whole issue was before the Company restructure in 2016.
You don't understand accounts do you Mikey?
Those unsecured Loan Notes (which rank pari passu with all other unsecured creditors) sit in the balance sheet.
They are NOT A P&L ITEM.
When they are redeemed they come off the balance sheet. Their only impact on the profit and loss is as to the interest charges incurred in having the Loans at all...10% a year or a $10m reduction in profits.
Stop embarrassing yourself and read a book on basic accounting.
Straycat.
I think your restrictive covenants where removed by Consent in April 15
https://ir1.q4europe.com/asp/ir/GulfKeystone/NewsRead.aspx?storyid=13136338&ishtml=1
Straycat.
The Bonds are a Debt that have to be paid off or renewed when they mature which is why they are in the Accounts against the Profit side
'the Lender is GKP'...
I didn't think I'd have to engage in a course of basic accounting with you Mikey.
But so it has proved.
You're now writing meaningless tosh cos you're out of your comfort zone.
As I recall one of the reasons for replacing the old Bond Notes with the new was to get rid of restrictive covenants relating to m & a?
Why was that I wonder?
Straycat.
Being the only Bonds in Issue and Capital the only Holder is surety in itself
Mikey,
Why do you think the loan appears in the balance sheet as a liability.
Let me help you. It's because it's a liability.
Invstrat,
If there is a buyer and a price has been struck, it will have been struck on the value of the field, nothing else matters. How GKP maximise shareholder value in advance of the sale is a matter of no consequence to the buyer. Why would he care? Whoever he is he'll have his own money and his own plans.
Agree don’t believe we are sold. KRG wouldn’t approve it. Probably because they want to maintain control.
Oh Dear Mikey,
GKP are the borrower. They have sought out the facility which was oversubscribed.
"But if that really were the loan purpose then the Lender would have insisted on security based lending".
The Lender is GKP and the security is the Bonds are in Capital Investments safe hands.
Crikey what do you want, it's so obvious its almost spelt out in neon lights
Let's assume all current monies at bank will be diverted to the buyback binge.
The old + new borrowings will be needed as a buffer to underwrite the protracted development plan should they ever actually come to pass..
Obviously we are therefore not, repeat not sold as new buyer wouldn't have allowed such lunacy.
And as such are simply unnecessary for trading purposes imo
I don't expect a $100,000 of Bonds to be for "trading purposes"
Buy having a first claim on any Assets as long as they are "not" passed into anyone else's hands by way of a sale, the fact is they do act as a surety against a similar as the 2015/16 events being repeated.
Imagine if anyone looked at GKP again with a view to Short Sell it down again with the intention of placing a cheeky Bid for GKP's share of Shaikan, the fact is that the $100,000 of Bonds will make any Hedge Fund think again, so the $110k acts as a surety against that sort of thing happening again
If the signs are in the details about the Company then there's nowt to be gained & nowt to work for.
FH1,
That's right.
But if that really were the loan purpose then the Lender would have insisted on security based lending.
There remains a risk that KRG don’t pay their bills. 100m is an insurance policy in case of that.
Thanks for that Mikey,
But if the New Loan Notes had the legal effect of acting as surety then that would have been declared in 2018 when GKP replaced the old Bond notes.
In fact they present as a simple five year unsecured loan with all the creditor insecurity that unsecured loans attract.
And as such are simply unnecessary for trading purposes imo.
M21 do the same hedge funds that shorted the equity still hold the stock or have they sold on to funds?
Out of the $575,000 original Bond Debt $475,000 including all the due Interest was settled by the Issuing of the 22 odd Billion Shares that made up the rescue package, and the remaining $100,000 Bonds all owned IMO by Capital Investments, where "refinanced" or "paid off" by the issuing of the current new lot of $100,000 Bonds IMO Capital Investments holds.
The $100,000 of Bonds are a "Debt" which have first shout on the money and a more importantly a "controlling shout" if anything on-towards happens like what happened in 2015 and 2016, when GKP was Short Sold down to 0.88p by half a dozen Hedge Funds who's intention was to push GKP into insolvency so that the Hedge Funds, who while Short Selling the SP down to 0.88p, had also been "Buying Up" every Bond they could do, which left the Hedge Funds holding the "majority" of the Bonds and importantly the "majority of the Debt".
Standing in the way of Hedge Funds intentions was the Holder of the Senior Bonds, which was Capital Investments, and by Holding a fair slice of the normal Bonds plus a vast amount of the Senior Bonds, Capital Investments had the first shout on any pay out in the event that GKP went Bankrupt.
Such an event would have left the 6 or 7 Hedge Funds picking over the scraps from the bones of GKP.
As it all worked out, Capital Investments wanted GKP to be "rescued" by way of a "Refinancing Package" plus the KRG sent a warning to the Hedge Funds that Shaikan would revert back to the KRG on any unsanctioned change of ownership if they did not agree to Refinancing Package.
So the Hedge Funds reluctantly had to agree to the Refinancing by way of Issuing Shares, and $475,000 of GKP's Debt was Refinance with the proviso, that the remaining $100,000 of the Bond Debt was paid off out of the monetary gained from Issuing a new set of $100,000 Bonds, which Capital Investments holds.
IMO the new $100,000 of Bonds like the Senior Bonds did in late 2016, simply act as a surety against anything similar happening to GKP again.