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...and all the while the sp is rising v.nicely If some ii's are selling in shed loads- then who is buying ?
Here's the text, just in case the link gets removed.
ONE of Premier Oil’s top creditors, Deutsche Bank, on Friday publicly backed the company’s contested debt extension plan ahead of a high stakes clash with a hedge fund opposed to the proposal.
The German banking giant said a proposal to extend Premier’s debt repayments by two years had its “full support,” setting up a clash with the oiler’s largest lender ARCM, which is fighting the extension proposal.
Premier wants to move the repayment date of its $2.7 billion debt pile from 2021 to 2023 so it can buy gas fields in the North Sea. It said 40 out of its 41 lenders back the plan.
Hong Kong-based ARCM is fighting the extension proposal over fears the takeover will cripple the FTSE 250 firms ability to repay its debt. ARCM also has a giant short position in Premier.
A judge yesterday scheduled a court showdown in March to decide the issue.
Some of Premier’s creditors have been exiting their positions ahead of the debt battle.
US giant Prudential Financial, the second largest lender, is understood to have put its entire $160 million stake up for auction last month.
One source said $20 million had been sold and another claimed that Prudential had sold out completely. It declined to comment.
Barclays, another top lender, sold $90 million last month.
Look, arcm have played this both ways. They want a reduced SP, so their exposure is less on the short. They also own shares and with the debt come options on the warrants.
Their arguments are less about scuppering the deal and more about reducing the SP. PMO may have blind sided these guys whether intentional or not, but they have themselves to blame with the fact they bet against the company. I believe things started to go wrong when PMO announced the sale of Zama.
PMO have never hidden the fact they were looking at opportunities in NS to avail of the tax breaks that would come with such a move.
On the face of it i think PMO are doing the right thing, this will speed up debt reduction and adds to reserves that are on tap. Decommissioning will be a factor of course, but with brexit around the corner and the UK taking direct control of their environmental obligations a looser decommissioning strategy is in the offing with the conservatives in seat.
I think that moving to a debt ratio of 1 by 2022 is a significant step forward that will allow for a full refinancing in 2022/23 and then theres SL.
Are they?
Why wouldn't ARCM not sell the PMO outstanding debt like others if they want out ???
The article states that all creditors except for ARCM support the proposal to extend the repayment date. Am puzzled why therefore principal creditors are selling off their debt. Surely this would give ARCM the opportunity to pick up the debt, increase their percentage of lending and therefore block the refinance. Am I missing something?
T