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"A company is insolvent if it is unable to pay debts owed. Just paying interest payments on debt isn't enough to make a company solvent when the company is unable to pay debts owed at maturity."
You are talking nonsense. Confusing bonds issued at a certain price and with certain initial conditions with 'debt'. The two are not the same, and the latter can always be renegotiated. The company seems unwilling to do this, as evidenced by its 'take it or leave it' documents, which leave shareholders high and dry. Also, over the last 12months or so, there is no evidence whatsoever that any effort has been made to improve productivity, nor to pare operational costs to save money, the latter being the usual way most companies use, even if it might mean cutting down on staff and the directores themselves taking a slight salary cut.
Shareholders invested in something WHICH IS STILL WORKING. Maybe not quite as well as envisaged initially, but still not a 'dud'. So they should not be cut out of the loop arbitrarily.
"You have answered your own question."
A company is insolvent if it is unable to pay debts owed. Just paying interest payments on debt isn't enough to make a company solvent when the company is unable to pay debts owed at maturity.
With c. $80m free cash, do you think HUR can produce $150m free cashflow within the next 12 months?
I personally don't think so, realistically. And forward guidance certainly don't.
"I would remind you of a statement which is written below almost any RNS. Sometimes the exact wording changes in detail, but this is from the latest one."
Yes, ofcourse. No-one can predict the future so ofcourse that statement is important below "almost any RNS".
But in accordance to company law and financial reporting council, every company has to make these assumptions and provide forward guidance and a going concern assessment as part of preparing for the annual or half yearly financial statements/reports.
Without such assessment, the annual report will not be approved - which results in suspension of trading.
Here's another link for you: https://www.frc.org.uk/getattachment/079e9ca2-7153-4831-8248-5de419041f6c/Going-concern-and-liquidity-risk-guidance-for-directors-of-uk-companies-093.pdf
when i say forgotten - i mean stock market wise. i would not be surprised if a forward plan goes ahead
AWK - personally i dont think there will be a storm of any sort in the uk if it gets rubber stamped by the judge. there will probably be a few articles in the financial pages about HUR's fall from grace - company worth over £1b at its peak to £3m shareholder valuation or whatever the 5% value will be. how could it all go so wrong? blah blah blah.
if there is any way that the bondholders can take it private - they will - and hur will disappear. forgotten like yesterday's chip paper.
"Can you provide why you think that it's not insolvent? The company can produce ECONOMICALLY between now and May 2022."
You have answered your own question.
I would remind you of a statement which is written below almost any RNS. Sometimes the exact wording changes in detail, but this is from the latest one.
"This announcement may contain projections, estimates, forecasts, targets, prospects, returns and/or opinions in relation to the Company (together the "Forecasts"). These Forecasts can be identified by the use of forward-looking terminology, including the terms "believes," "estimates," "aims," "targets," "anticipates," "expects," "intends," "may," "will" or "should" or, in each case, their negative, or other variations or comparable terminology. The Forecasts involve significant assumptions and subjective judgments which may or may not prove to be correct and there can be no assurance that any Forecasts are a reliable indicator of future performance, nor that they are attainable or will be realised. There are a number of risks, uncertainties and factors that could cause actual results and developments to differ materially from those expressed or implied by any statements and Forecasts made in the Presentation. If one or more of these risks or uncertainties materialise, or if any underlying assumptions prove incorrect, the Company's actual results of operations, financial condition and liquidity and the development of the industry in which it operates may differ materially from those made in or suggested by the Forecasts. No reliance may be placed, for any purpose, on the Forecasts or the information contained in this announcement."
The company has proposed the restructuring the plan to give shareholders 5% equity.. rather than 0% which would be the case if majority bondholders(75%) do not vote for this restructure and if not approved by court.
"The company is NOT insolvent. The BoD is simply projecting ('foreward statement') that it may possibly become so in 15 months' time."
Can you provide why you think that it's not insolvent?
The company can produce ECONOMICALLY between now and May 2022. But as it stands, the company is insolvent, not because the BOD are projecting on a forward basis, but even if the operations carry on as is (which they will even if restructure plan doesn't pass), the company will belong to bondholders.
There is negative net assets here following the huge downgrade in reserves/resources.
"And any judge with the least amount of grey matter between he or her ears will immediately question what has been done by the Directors to try and avoid such a situation, as is their duty, to protect the shareholders. I'd be interested as to what kind of answer might be given to that."
Well.. if you had bothered to read the link I had posted in a reply to one of your previous posts.. you'll know that the restructuring plan does not consider shareholders..
Here's the link: https://www.dlapiper.com/en/uk/insights/publications/2020/10/restructuring-global-insight/restructuring-plan/
Here's the reference to shareholders in the new restructuring plan under Companies Act 2006:
"So shareholder rights can be amended by the Restructuring Plan?
Other than permitting a compromise or arrangement with members in order to deal with financial difficulties, the Act does not deal expressly with the rights of shareholders. However, the intention underpinning the Act is that shareholder equity can be transferred, diluted or extinguished as part of a court approved Restructuring Plan which makes sense in the context of distress where shareholder value is likely, in real terms, to be materially impaired, if not nil, based on the then subsisting valuation of the business. The Act includes amendments to the Companies Act, including a disapplication of shareholder pre-emption rights, which appear to be intended to facilitate a dilution of shareholder rights pursuant to a Restructuring Plan. The ability to bind in shareholders can be a significant additional hurdle to achieve successful restructurings and these implicit powers are likely to be welcomed as part of the additional powers that companies now have under the Act to promote corporate rescue and recovery through the delivery of a viable Restructuring Plan."
"Instead, it's a court decision, with many, many reputations at stake. Not just that of the judge, the BoD, assorted investors, bondholders, and so on, but assorted journalists, people like Malcy, other professionals, etc.,etc, etc.."
The court decision will be under the UK Restructuring Plan - see above. Nothing to do with shareholders and does not give any thought to shareholders, under the law.
Look forward to your response on why you think it's not insolvent.
Slifty boy - don't be silly silly. the agreement is a scam, a fairy tale, porky worky pies. False premise - false conclusion - simples.
Slifty smarmy boy......don't be silly. Perfectly calm, thank you, even tranquil. And I know precisely who you are, and what you are. Have another try.....
"There is no shareholder vote as the company is insolvent. "
The company is NOT insolvent. The BoD is simply projecting ('foreward statement') that it may possibly become so in 15 months' time. And any judge with the least amount of grey matter between he or her ears will immediately question what has been done by the Directors to try and avoid such a situation, as is their duty, to protect the shareholders. I'd be interested as to what kind of answer might be given to that.
No, a 'vote' by shareholders (even through a rapidly-convened EGM) might not achieve anything now, or at least, not immediately. But 'shareholder votes' are no longer what's in question. Instead, it's a court decision, with many, many reputations at stake. Not just that of the judge, the BoD, assorted investors, bondholders, and so on, but assorted journalists, people like Malcy, other professionals, etc.,etc, etc..
So whicheverway it goes, there will be a real sh**storm, at least in the UK. I suspect that the bondholders themselves, or at least those in the USA and maybe China will keep fairly quiet, not least because they themselves may not be too happy with the plan, and wouldn't want to be peronally exposed in a 'guilt by association' situation.
"There is no shareholder vote as the company is insolvent. Not even production to end of May + liquidation of company will pay off the bond. It's well informed in the presentation."
If that's the case, I hope the BoD have their houses well protected, or that they're prepared to be unemployable for the rest of their lives, cast out as jackals, and maybe do some jail-time.
You seem upset.
"All competent, ethical accountants would at this precise moment give Hurr a clean bill of health, with a protective qualifying statement."
Are you a competent, ethical accountant? If you are you'd know how dire the situation is. All you have to do is read the balance sheet.
Heck, even read the HY20 one. It's just numbers and the alphabet. Put the numbers together and the letters together, you'll get somewhere.
"Buying like crazy, to become 'major shareholder', and overturn this restructuring plan."
How will this be "overturned"? An event of default has ALREADY occured with the BOD entering into a Lock-up agreement following a fail of the going concern assessment period (over 12 months period from the date annual report is released). The annual report hasn't been released, and HUR has stated that the company will cease operation within 12 months (May 2022).
There is no shareholder vote as the company is insolvent. Not even production to end of May + liquidation of company will pay off the bond. It's well informed in the presentation.
"The company is NOT currently insolvent. Projects such as a further well to enhance production have been 'backheeled' to next year. Maybe to save money and thus cover repayment of bonds."
The company IS INSOLVENT without the FWP being sanctioned. The company has failed to secure funding for the FWP, which isn't very surprising since the FWP wasn't very attractive.
"With current revenue from ongoing production, a "massive placing to raise enough to pay the bondholders in full" is not required. Sure, maybe a slight shortfall, but if so, only a small one"
Even with current revenue, there will be a huge shortfall in free cash to repay the bondholders, by a large amount.
"perhaps rather than simply grasping at straws you could tell us how after you dismiss the Board, perhaps put yourself in charge, how you actually get round the going concern issue. Trading whilst insolvent is your thing perhaps? A massive placing to raise enough to pay the bondholders in full... perhaps you could walk us through how that would work?"
Put myself in charge ? That made me laugh. I've only been a member of one BoD, which was a newspaper, in a 'non-executive' role and for which I was also a journalist. I've worked in 'management role' fo an independant oil company, and consulted for many, but mainly working in the field, or writing post-well reports based in town after the project. But 'in charge' of a multi-million oil company like Hurricane ? Utterly no way. (Though I wouldn't mind giving it a try.)
But I do recognise 'good practice' and can differentiate between honesty and doubtful stuff, and especially when people senior to me in the heirarchy are trying to squirm out of things just to save their own a**.
The company is NOT currently insolvent. Projects such as a further well to enhance production have been 'backheeled' to next year. Maybe to save money and thus cover repayment of bonds. But this is simply the BoD selling us out, to the benefit of bondholders, some of whom some of whom may have personal connections and thus maybe (in the future) they will receive 'backhanders', though I wouldn't make any accusations like that, right now. But I hope the judge appointed will have his staff investigate such a possibility.
With current revenue from ongoing production, a "massive placing to raise enough to pay the bondholders in full" is not required. Sure, maybe a slight shortfall, but if so, only a small one. And anyway, debt can always be restructured, without selling shareholders down the line, which is the thrust of this 'proposition'.
The whole thing now stinks to high heaven. There's a rat away, somewhere.
mcadder. You are like a parrot echoing slift's fairy tale...night is day...black is white...etc etc. Every post you make diminishes your credibility. Have you not yet noticed that the pair of you are considered jokes? Do continue, please
Adoubleuk: “ No, so far the company has not 'defaulted' on any bond repayments, or at least not in a way anyone has heard of.” fact is you don’t have to default on payments to fail under going concern, it’s a simple assessment that there is no credible way to service your obligations and so you fail the going concern test... perhaps rather than simply grasping at straws you could tell us how after you dismiss the Board, perhaps put yourself in charge, how you actually get round the going concern issue. Trading whilst insolvent is your thing perhaps? A massive placing to raise enough to pay the bondholders in full... perhaps you could walk us through how that would work?
"Not sure what exactly CA can do either. Anything they do will be irrelevant to the whole situation. "
Well I certainly can. And whatever they are no doubt currently doing will lead to sparks flying !
OK, I'm just an impoverished little PI. Don't have the resources of a Richard Bernstein. But were I in that position, I know what I'd be doing right now. Buying like crazy, to become 'major shareholder', and overturn this restructuring plan.
The BOD is prepared to give away 95% of the company for 50 million. CA has already made 43 million profit in the past from the shares they hold. I think I'd personally use that as colatteral against 50. CA can afford it. Whereas what maybe the can't afford is loss of reputation, having their own holding wiped out (and that of some of their shareholders) on behalf of some bondholders whose situation can be renegotiated: there's 15 months to go. Or two weeks, depending on how you see it.
"The company has defaulted under a going concern assessment. They will not be able to pay the bond back, and there is no choice but to restructure the debt which is what HUR are doing."
No, so far the company has not 'defaulted' on any bond repayments, or at least not in a way anyone has heard of.
"Calling an EGM would be pointless as the company would still default unless bondholders agree to terms."
Those terms could be discussed at an EGM, with shareholders present, either physically, or 'virtually'. But no such idea has been proposed.
"Sure even a statement from CA may make the share price move, but it won't help the company"
I feel getting a bunch of current t*ssers getting chucked off the Board might be a good start, though.
"Shareholders should not bet on instituitional investors to buy or sell. Those that do are simply gambling. Don't gamble peoples."
Why not, just once in a while? Don't tell me what to do. I just love it when leaving a casino, I discover a forgotten 100-euro chip in my pocket, so toss it on 'red'at the roulette table. Pure gambling and chance. Nice when the ball lands in a red slot. And if it doesn't, what the heck ? I'd already forgotten about the chip in my pocket, might have been through the washing-machine, so lost anyway.
senseman - they haven't defaulted. Yet. But that's only because the debt is not due till July 2022.
However they know that they are going to technically default by then because they are going to be far short of the $230M due payable July 2022 by a figure of some £50M hence why they are being forced into this restructuring plan.
And that is based on cash in bank plus production between now and next July. And because of this default that WILL happen there are likely to be convenants written into the bonds that will be triggered in the event of a situation like this.
Slift....you are indeed a right lying p*llock. You would state night was day and back was white. No one takes you seriously. You over-egged the pudding yonks ago. The age old maxim - 'less is more' etc has bypassed you. Hurr haven't defaulted, nor are they ever likely ever to if the attempted scam fails. All competent, ethical accountants would at this precise moment give Hurr a clean bill of health, with a protective qualifying statement. The BoD and CPR financial projections are a fairy tale. By the yardstick you seek to apply, competent, ethical accountants would be obliged to declare at least half the AIM listed companies, and a fair proportion of LSE companies, insolvent . Every post you and fellow paid t**rags make diminishes your credibility. So do, please, continue
Agreed Slift. And after digesting Fri's RNS and reading up on the CIGA was enough for me to get out at 1.15p. CA may try but ultimately I don't think there is anything they can do.
"Under the CIGA, the court is given the power to disapply certain shareholder rights to implement a Restructuring Plan, including in particular shareholders' rights of pre-emption and the requirement to seek shareholder authority to allot and issue further shares. It now appears possible to remove that consent right through the court as part of a Restructuring Plan"
I can't see a plausible option here. No one will raise finance because of the huge debt, 90% less oil, declining production and money needed to develop future production and pay for decommissioning. That's probably why they didn't do a raise with the market because they couldn't. Even if the bod were ousted we still have the issue of the massive debt and insolvency. And let's not forget that following the discussions with an hoc group of bondholders for months nearly 70% as of Fri were in agreement with the proposed arrangement. The bondholders have spoken and they want their money back and from a legal point of view they are entitled to it.
"As mentioned, I haven't a clue what CA are doing, but I'm sure it won't be nothing."
Not sure what exactly CA can do either. Anything they do will be irrelevant to the whole situation. Unless ofcourse they can fork out $230m to pay the bondholders off on the back of their own finances..
The company has defaulted under a going concern assessment. They will not be able to pay the bond back, and there is no choice but to restructure the debt which is what HUR are doing.
Calling an EGM would be pointless as the company would still default unless bondholders agree to terms.
Sure even a statement from CA may make the share price move, but it won't help the company.
Shareholders should not bet on instituitional investors to buy or sell.
Those that do are simply gambling.
Don't gamble peoples.
"Crystal Amber will do nothing. "
That's a very bold statement to make. Remember, CA is a major shareholder which stands to take a huge hit to their potfolio if this restructuring is allowed to happen. People have in the past surmised that CA is also a bondholder, but there is nothing in their financial statements to suggest that this is the case.
I do not know what CA and Mr Bernstein are doing right now, but the silence and lack of comment, is very telling, I believe. Maybe they're just shovelling up as many shares as they can to increase their leverage vis-a-vis the BoD. I don't know. Also, it's the weekend coming, so it would be a real laugh if a TR1 were released on Monday showing that CA was now the major shareholder.
Also, we know from the past that Mr Bernstein has good contacts in the financial press, and is not afraid to use them.
As mentioned, I haven't a clue what CA are doing, but I'm sure it won't be nothing. Maybe we PI's are clutching at straws hoping for a 'white knight', but sometimes when things are essentially out of one's own control, there's nothing wrong with retaining a little hope that one may actually see justice done. Because (imho) I feel the company is proposing a huge and scandalous injustice. The least that they could have done would have been to propose a further equity raise, to see what happened. Furthermore, keeping shareholders 'in the dark' as the BoD has done for months, then dropping this bombshell on them as they have now done is shameful, and they (the BoD) should be ashamed of themselves.
I bought in at 3.5p a month ago luckily sold at break even, then last friday saw this drop I was stupid enough to buy in at 1.79p thinking I was ever to counter! that! I sold all my shares again! and bought in two days ago and bought in at 0.89!
So I'm back where I started at 24k shares and now £200 down haha! but sometimes it's eitger die or adapt! yesterday the SP went back to .94p so I've switched to day trading this instead of my original LTH plan.
I'm a newbie here btw so please don't pre judge, just my point is to diversify and hustle! even if your down.
Only just seen the latest. I wish none us had lost money here but that is always possible with this type of death or glory share. Had the (at the time) the believable Trice been right the SP could be £1+.
This is not a saga of corruption but of lack of effective stewardship, which shouldn't happen in a substantial company - particularly a quoted one. After Stobies departure there was effectively a board of one and a few yes men, happy to take paycheques to rubber stamp an individual who descended into blinkered denial of the true situation.
Good luck to investors in this 'enterprise', past and present. Sad what happened here