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Given the hostile way they do business, I don't feel the current board could give any less of a monkeys about private investors or anyone else for that matter. Think you have to hope whatever happens is good as a side effect rather than an intention
Let's hope so AA....I am waiting for this board to impress the minority shareholders though I wonder what they can do different that the previous board could not do. If banks are willing to do a better deal because of Emirati board members, that is a moral hazard as well.
I think any offer, or asset sale (given market cap), would require at least 75% shareholder approval. A squeeze out 90%. So on that basis alone I would think new Board/SF/Man Cap would need to play fair and reasonable.
Guess people getting bored and ditching this.....better opportunities elsewhere i suppose than this O&G play although this could be a multibagger in the medium term if the new board doesn't screw up things for SeaFox/Man Capital to takeover on the cheap
Not even that many trades, very quiet today.
I have to assume that SF has been having some discussions with the banks regarding the loans, otherwise why go to all the trouble of taking over the BoD. Who knows, they might even have a plan.....
Nothing more on the ADNOC/Zakher Marine deal either - obviously not expecting much since those would be in the private domain. Let's hope for an announcement before the year end or before the banks decide to call in the loans, whichever comes first
Indeed - all very boring at the moment. Tick tock, tick tock....
...
Good volumes today though
What's with the ridiculously tight spread 6.68-6.7 on IG
could the company potentially underwrite their own loan through subsidiary and then run the company into the ground and acquire it that way?
This week is clearly not the week it seems....
Would be nice to have few bidders come in ASAP before SF screws up things with the blessing of their dummy board....makes sense for Adnoc to have a unit to do this. Bahri which is owned by Aramco also makes sense. In fact, if the board had tried to sell the company earlier, would have been better - dont know why they never pursued that route. Perhaps that was the plan as part of the capital raise....
oh wow, now that is very interesting re: Zakher Marine. Given ADNOC's interest in Zakher, it also provides further evidence that were SF+friends to go down the administration route with GMS in order to pick up the vessels on the cheap, there would very much be a fair bit of competition for the assets and hence a very risky (and thus unlikely) strategy/scenario.
Look who is buying Zakher Marine
Yes, I had always thought that an outright bid may not be Option 1; wasn't too sure about SF balance sheet strength, although the 22p rounded out to a nice USD 100m.
But its not that much of a stretch to do a deal - here is the math:
1. Initial bid budget - 10p x 350m x 87% = GBP 30m. This would have been the initial outlay. I believe there were ready to deal with the bank at that stage with the change of control. Perhaps less willing since the board signed that agreement in June
2. Acquired an estimated 8% at 10p = GBP 3.0m
3. Acquired an estimated 9% at 22p = GBP 7.0m
Means they still have GBP 20m remaining from their initial budget. This gets them an additional 26% at a 22p/share bid.
To acquire 50% at 22p, they need GBP 39m. (assuming Mazroui and Horizon join for the ride)
To acquire 80% at 22p, they need GBP 62m. (buying out everyone)
Alternately, a new partner would need GBP 34m to buy the remaining 44% if SF does not intend to spend more than their initial budget. In all cases, the bank debt is a constant, and I am sure they had a plan on that before they tried the bid.
As an M&A banker, I will let you be creative on how to construct the deal, but its not a stretch if you are creative
In the case of a capital increase, multiple options again. As long as SF don't under write and squeeze out minority shareholders. Obviously, an equity raise isn't great (unless they can do so at a premium)
Also to be seen what value, if any, the Emirati board brings to the table. Can they source more deals with the local oil cos and ramp up utilization? This is a low hanging fruit to optimize, and banks would be more comfortable with this scenario and we can limp past the finish line with no capital raise or a smaller capital raise. All are value accretive to equityholders!
Well, that was all slightly anti-climatic. Was partly thinking there might be an RNS about a bid at 7am. But then again, how would that be a good use of capital at this point - i.e. spending c. $50-60m to acquire the c. 50% they do not already control (i.e. to put into the pockets of the existing non-SF+friends shareholders) which would leave the debt overhang remaining in tact. Actually, doing so (succeeding with a full offer) would trigger a change of control with the banks and so they would then need to refinance the whole debt quantum in any case, including the equity injection component.
Surely it would be better from the point of view of SF+friends just to spend $75m in new capital (to pay banks). For me the question is how they go about that. Can it be done as a private placing of new shares solely to SF/Mazroui/Horizon? In this case SF clearly goes above 30% which in ordinary circumstances would require making a full offer. To waive such a requirement would I think either require the consent of the Panel (unlikely to be granted) or existing shareholders (but as an ordinary (50% approval) or special (75% approval) resolution?? If the former, then no problem, if the latter then it gets complicated). Alternatively, if they go down the route of a traditional rights issue it would probably have to be underwritten. Do they get a local bank like EFG to underwrite (with whom the new team have very close ties)? Could it be underwritten by SF/Marzroui/Horizon? If all shareholders don't subscribe pro-rata then SF/Mazouri/Horizon then need to pick up the difference which puts SF over 30% (unless it's picked up by Mazouri/Horizon) hence reverting back to above issue about waiving requirements for a full offer if breaching 30% level.
As a former M&A banker myself, am starting to wish I paid more attention to my Equity Capital Markets colleagues on some of these finer points...
As much as i welcome it, making bid now makes it so easy on minority shareholders. With the board fully under the control of the 50% holders (SF, Mazroui, Horizon), there is no rush to make a bid unless SF have agreed that with Mazroui and Horizon. As long as they don't destroy value, should stay put. Nevertheless, with the bank deadline looming, there is guaranteed newsflow before the end of the year.
I think the 28th Nov was the end of the close window for SF. Now they have their board in place to approve a bid will they make one or drag it out further???
@4C - thanks, indeed still very much here and waiting to see how this whole situation pans out
Weird to see it marked down 12% when the sell price is UP 3% and the buy is stagnant
@AA2020 good to see you are still here!
Wouldn't mind the offer, and a better deal/win win would be a capital raise at premium!
It’s the final countdown! Things are bound to become clearer by end of Monday. Am still thinking either a new offer or details of fundraising with new capital from SF and friends.
Interestingly only SF, Mazroui and Horizon voted for him, i.e. 49% of shareholding. The last general meeting to elect the new board had received the support of 60% of shareholding.
Heikal is in - lets see if he works his magic solely for his masters at SF or for everyone. This is a guy who was in trouble with the Egypt regulators few years ago; hopefully he has some sense of corporate governance having been the CEO of an investment bank there