The latest Investing Matters Podcast episode with London Stock Exchange Group's Chris Mayo has just been released. Listen here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
PFC will go into Admin, then opposition (potential bidders) will pick up pieces they want with no debt and no redundancy payments to make. It’s called a Pre pack.
I strip companies in print industry (pre press equipment) this happens every week (on a lot smaller scale than PFC) but exactly the same.
Well u better sell up if you think so. Am just reading the rns- prefer to go with facts. Good luck with ur goose
Check my posts, sold out this morning and wished holders good luck.
I will be back if I think there’s money to be made from the PFC corpse.
Ok fair enough if you say you have.. I take the view that we are diluted like the rns says and we will rise from the fire. The creditors don’t want a total loss.
Or we just get Taken over before then - GL if you decide to come back in.
Looking at the Bonds trading at 15% value suggests there might well be a mexcian stand off here and the threat to greedy bondholders seeking hefty d4e is ADMIN. They really don't want this to go into ADMIN or they'll lose everything as well. That fact that debt sits higher over equity does not necessarily mean that shareholders have to carry the can on this one. At end of the day, the Thai project sunk this business along with high inflation etc. It's a viable business and order book strong. But if debt holders want to leave shareholders with zero... ot close to it... then shareholders can just pull the plug and debt holder go down the tube as well.
So there has to be some fair deal for all involved or there is zero point in continuing.
Now, with Ayman Asfari and AzValor Asset Management owning almost the key 29.9% these guys might be looking at a private deal post admin. That would certainly be a middle digit finger to the SFO by Asfari.... and perhaps his middel east backers will come to save him... but not everyone else if you follow. So in effect, Asfari gets the business back, takes it private for a while, gets mega contracts from MENA region and then relists 5 years down the line etc.
Ugly stuff... but if the bond holders play fair and leave shareholders 20% to 25% then this could rise like a phoenix and be back in the 30's and 40's based on potential $1bln+ markt cap and half debt burden.
Not a holder myself (was in the past) but genuinely can't say which way this will go apart from the fact that survival is in interets of both debt and equity holders and despite debt ranking higher... it's the shareholders that can pull the plug first via admin and bondholders know this.
Great post and my thoughts too.
Play nice or everyone loses.
Didn't Afren still fail after a rights issue? not the same though as I believe there was fraud going on somewhere in the mix at Afren.
Ask the auditors what they thnk?
Remember reading a double page spread in Investors Crapital re Afren before I invested.
Not sure why I don't buy that thing anymore
Interesting view there Fortissmo
If bonds are trading at 15% then rest assured that equity is worthless, they will inject the cash and convert most of debt into equity to take advantage of future gains to recoup their money.Problem is it has fallen from 750 after bribery fiasco and has not recovered since then.Problem is they have been slow to gain new buisness and this sort of buisnesses operate on paper thin margins and it takes very little to turn a profitable contract into loss-making but as long as you keep on winning new contracts they will even out books.Covid was real culprit here which ground everything to halt and company has never recovered from there.In my opinion we have a bunch of gamblers who are gambling on "bigger fool" theory however they have chosen wrong company here and that will cost them heavily.
Fortissomo, Great POST X
Yes, there was fraud involved. Two directors were prosecuted by the SFO. I also worked on the case for the administrators afterwards to recover some money!
Downbutnotout
Yes, there was fraud involved. Two directors were prosecuted by the SFO. I also worked on the case for the administrators afterwards to recover some money!
Fortissimo
‘So there has to be some fair deal for all involved or there is zero point in continuing’
The critical points are that all the debt is senior secured and it’s only the bondholders who are offering a route towards solvency.
Debt holders are in total control and the BoD will have to accept their proposal/terms if they have no alternative rescue plan
As a golden rule, a restructuring normally values the existing equity at listing value which is £20m to £25m. So 4 - 5p.
This is what will be on offer. And worse, the D4E will be massive and highly dilutive. Maybe $600m ..
And even worse, there will be the mother of all stock overhangs. BH’s don’t want equity and if D4E at say 5p, will take down to maybe 3p to get out. I will
Spot on PaulCurtis but gamblers here are living in fools paradise if they think that bondholders would let them escape with any profit if it was to be had.In these sort of situations bonds tend to predict exact situation and if bondholders are willing to take 15% of their original investments then shareholders stand no chance of gaining anything.People have chosen wrong share to gamble on and it would cost them heavily.
Not quite so i feel. The likes of Asfari, Apollo, perhaps Wood group may wish to pick it up and do the restructuring themselves. Given how much Apollo were prepared to pay for Wood group, this will be something they may be considering. Or Asfari. I am not deluded - i recognise the risk as does everyone else i assume. ATB