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Big smoke.
Got ya. My apologies, I thought you were referring to asset value.
AA2020 Yes it can be done they would need to convene a EGM to allow them to change it tho.
Also. From where I’m sat with so many big holders it doesn’t seem in anyone’s interest to get the financing through at a super discount.
The refinancing is a formality & as per RNS “negotiating move favourable terms” so... maybe they will wipe off the share equity arrangement and just give the banks some shares with a lock in period.
Company is growing. Nav @ 60p (currently) and oil price is up.
Good risk reward.
You can raise equity at a discount to nominal par value. You may have to go through a process first including to reduce par value, but it can be done
Ent value - yes, 30p at least
Par - the nominal value of each share is 10p. You can’t raise at a discount to nominal value. So, I’m taking about poss bagger upside to dilution !! Never mind the realistic enterprise value
Is this an odds on formality?
Par value ?
Nav is $310m / 60p
Assets - current liabilities = $310m
Once they get this debt restructuring out of the way this will move up in to the 20/30p rang imo mate.
thanks, camkite.
and par value is 10p!!
These discussions are in regard to certain improvements to the terms of the debt structure, that was concluded in June this year, as part of the restructuring of its debt facilities. The Company is pleased to report that discussions have been positive, yet not conclusive and the Company anticipates that there is a reasonable chance to reach an agreement in the course of the coming weeks.
Looks game on from these levels imo. Will bag in the coming weeks.
The outlook for European renewable work is promising, with a number of opportunities emerging as clients seek to secure vessels for projects in the longer-term.
Since the last market update, further vessels have been secured under contract, with total fleet contracted utilization already at 69% for 2021. As a comparison, at the same time in 2019, only 56% had been secured for 2020.
Progress continues on cost reduction, with annualized costs savings now standing at $18.5m with further opportunities for cost reduction identified. Nine-month 2020 G&A costs have been reduced by 30% compared to the same period in 2019, and onshore headcount has been reduced by 48% since early 2019.
The relocation of GMS from its outdated Musaffah base to new facilities within Abu Dhabi has been successfully completed. This move reduces the combined office & yard costs by around 40% annually from 4Q2020 onwards. Relocation costs have been more than covered by sales of equipment no longer required within the new footprint.
Nine-month 2020 adjusted EBITDA[1] delivery remains above Business Plan targets, an increase of 25% versus the comparative period in 2019. Year-to-dateNine-month 2020 adjusted EBITDA[2] margin (against the same period last year) has improved from 43% in 2019 to 59% - an increase of 36% - delivered despite the current challenging market conditions and restrictions due to COVID-19.
The Board once again reconfirms the previous 2020 guidance, originally issued in January, of $57-62 million adjusted EBITDA, with the expected outturn at the upper end of the range.
$220m order book and growing.
Bigsmoke The most recent trading update is well worth a thorough read.
I Captain. All Aboard.
Good RNS. More to come I suspect
BOOOOOOOM
Houston, we have a "balance sheet" issue.
" These contract extensions will further increase secured fleet utilisation for 2021 to 75%. This compares to a level of 66% for 2020 at the same time last year. "
what's happening here then?
Correction on 1: "without" the need for significant dilution
As expected, no share price movement from the last RNS. In my humble view, share price gains will be driven by:
1. Clarity on the debt deal when announced, and it shows progress with the need for significant dilution and/or gives a better time frame
2. Boost in utilization rates, that translates into solid EBITDA growth, and at least net profit breakeven. Anything north of $70m is interesting
3. Measures to strengthen the balance sheet, again without significant dilution. So ideally a placement to strategic investor at a higher price (the argument that they can buy it cheaper in the 'market' is invalid, unless of course they make a bid for everything, which is also positive)
4. Lastly, a bid from someone other than SF
Given how illiquid the stock is, even in scenarios 1-3, sustained elevated price is not a given. This stock is almost a private equity type stock with an exit through a trade sale. And to that extent, its not really in the interest of SF to let the price go up either, atleast till June, when they are not bound by the 22p price if they intend to make a full bid.
Ah - very interesting. Didn’t realise the market closed at 12:30 on NYE!
The market closed at 12:30 on New Years Eve and the RNS only came out at 12:33 - after the market closed.
Will be interesting to see if it affects the price on open tomorrow.
Agreed that it rules out the worst case scenario for now, and shows good faith on part of the board/SF. Lets hope they negotiate a much better deal
On the share price movement, obviously its the holidays. But also its still not clear what the terms are, although looks positive just the fact that they are negotiating. Also given how illiquid it is, it needs a very strong trigger. Not many are willing to sell at current prices, or even double, and not many willing to bid higher given the unknowns.
I’m actually pretty surprised the share price didn’t jump higher on this RNS. The market must be in holiday mode! The investment case and outcome has been binary for some time - either it’s worthless and will be placed in administration with assets handed to banks OR it is worth significantly higher than current market cap even with the impending equity raise and dilution. Today’s news makes the former very unlikely and to me is somewhat of a positive signal of current Board/SF good faith and intentions.
This is good news. The banks clearly are willing to negotiate (despite the protestations to the contrary made by the previous Board!) and it appears current Board will be able to improve some of the terms, including in relation to the quantum and timing of the inevitable equity raise. This significantly reduces the risk of some of the theoretical worst case scenarios discussed here previously.
4C - re: the reference to Jan 4th and warrants, I read this as simply that GMS of course was previously obliged to issue warrants by end of this year - ie today. Jan 4th is the first UK business day after today therefore without the waiver from the banks they would have technically been in default on Jan 4th.
Seems like rough negotiations, and basically confirms my thoughts on how this new board could do something much better than the previous board on this debt issue. Yet, its positive that the banks have agreed to give them time
Not clear on what they mean by warrants to be issued by 4 Jan.....AA2020??
Looks like the boys on the board are in holiday mood and not interested in disclosing anything this year.