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@Jubilee...do you honestly believe that Slift one vote for the UG sale was the straw that broke the camels back! If anything you're the one who keeps spitting your dummy out about UG.....as the famous Frozen song goes.."Let it Go!"
Cuz you earn it. We lost a hundred or two hundred millions because we didn't time properly the sale of Uganda. Maybe you shouldn't have been so vocal about it? You screwed us once, but I am glad you sold and that you are missing the recovery. Keep sucking your thumb!
Probably missing something here but it has been well flagged by Rahul that discussions are ongoing with bondholders to align/reschedule maturities with expected cashflows in accordance with new strategy. I'm at a loss to know whats new in the circular' The fact that they are not refinancing may or may not be a mistake but it hasn't been pulled out of the hat today.
@OhhAhhCantona: If it is a new bond or convert with a voluntary exchange/switch from the 2021 convert or the 2022 & 25 bonds, great. But the circular is specific about amending the maturity date of the EXISTING debt. TLW will need 90% of the bond holders to change the maturity, a high bar which is why you generally only see it discussed when the alternative is bankruptcy. This is why I was surprised as TLW is nowhere that point. The Cine point is interesting as there is a reference to shareholder approval being required.
@antharry: we got the confirmation in the circular today: 'management has therefore commenced discussions with its creditors' to amend terms including the maturity date. That is highly unusual. It is a road that leads to a distressed debt amendment and a selective default rating, neither of which are share price positive. Best interpretation is this is a plan B, and plan A is TLW refinancing the 2022s after the results next week, though telling the market you countenance maturity extensions on your debt does not set a great backdrop to TLWs efforts to raise new debt.
Cantona when the board mentions stakeholders instead of shareholders is because the board doesn't have the interest of shareholders at heart. There is no such thing as win-win there is always a side who wins more, there is the perception of armony win-win, but there is no such thing as a win-win (like the time when we sold Uganda when oil was at an historic low). If we have an excess of 0.9 billions in liquidity wtf are we doing giving freebies away and lending an ear to Slift?
Wording in black and white is harsh as directors have to cover their duties but I take comfort from: - RNS last week talked about confident mutual deal for all stakeholders deal will be done - when Rahul did the Q&A on the EG transaction he did mention that all the going concern stuff had to be put in and was at pains to say they had to say that stuff for legal reasons - some wording in circular is to ensure people don’t get sellers’ remorse - the c.$350m shortfall is based on reasonable worst case if you add say another $100-150 for say oil at average of $60 then that gets you to $200m shortfall and I would be asking the question why they need $500 m liquidity headroom and could they not manage with $300m in a crisis and have an expensive bridge facility lined up... - if 2022 and 2025 bonds (and there are apparently a lot of cross holders) get greedy on pricing PJT must have a Plan B or C to take them out...worst case TLW may need to give some warrants like on Cine of say share price hits like £1.25+...good thing is over past 12 months there are a lot of debt pricing benchmarks and market for high yield is still strong - I just hope the adviser overload is not getting too much but Rahul has been an adviser so he should be able cut out the fog as he is into the detail.
We will still see this push on and there may be a bit of noise we have to block out over next few weeks...and a lot more challenging deals have been done and the large shareholders will vent and seek changes of Board bend over easily to the lenders
Thankyou Roxbury, got it. Hence your statement 'TLW is very clearly and very deliberately flagging to the market it may need to restructure its debt'. Its down to the Directors and the accounts dont exist for audit signature/ opinion until the Directors sign first.
Roxbury when you say ". I asked the company last week about the S&P ratings statement and to confirm there is no risk of a distressed bond exchange - so far no denial."....have you received any communication at all back from the company?
Android101: not an audit expert but my read is if the banks waive the test, then the auditors can sign it off. As far as I have read the liquidity test is only in the RBL, not the convert or bonds. TLW Board still have to say the business is a going concern, but this should be easy with the current bus plan, oil price and an informed view on ability to refi the 2022s.
@rafflesintheuk01: The restructure is not a risk related to the transaction. It is related to how TLW solves its bigger liquidity issue, and TLW is very clearly and very deliberately flagging to the market it may need to restructure its debt. That is not something any company says lightly.
Can we avoid an audit qualification re the liquidity forecast test and the 18-month testing period from March 2021 to August 2022. Worst case and completion the would be a $365m shortfall in April 2022. Thats based on $45bl 2021 and $47bl 2022.
Roxy, Thanks for sharing, I am happy that the Para 2. RISKS RELATED TO THE TRANSACTION NOT PROCEEDING, they are stating the obvious , and we are all aware of these risks, if the motion is not voted through. I am still content to Hold and ride the long term tide. This is a 3-4 year portfolio stock for me. Cheers.
@OhhAhhCantona: Am not so sure. I asked the company last week about the S&P ratings statement and to confirm there is no risk of a distressed bond exchange - so far no denial. My base case is that they can refinance in these markets and they should hit the market right after results. But there is a reason they put they wording in the circular today. Unless you are considering it why raise it? Makes no sense to trigger event a technical default on the capital structure. I honestly wonder if they are getting best advice here and being told the downside risks they are running.