Member Info for Bebeto

1meteor, there is no explicit mention of the payment status of the existing waiver and the mention of administration administration at this time, lends to the idea that it hasn't been.

If this does go to debt equity swap 0.2p will be fair value.

I suspect another load of traders are going to get trapped in today.

They're struggling to get another short term waiver and the production is in decline.

Those in denial of the precarious position are in no doubt now.

Good luck and I mean it ,it's not nice to see shareholders get shafted by traders and companies!

And the company will always do what's best for the company, which doesn't translate to mean shareholders !

Even though insiders also hold their shares can be replaced at a later date.

Yes it's a bit of a catch22 scenario.

A lot of people don't have a grasp of the financial situation here.

The bondholders are key, for them to renegotiate long term they must believe the company can deliver and for a debt equity swap they must believe that they can make a profit.

Even though on paper the company has £20m in the bank, over £7m is restricted and they have shown the coupon money to be in the Norwegian bank account, they just don't look to have enough working capital.

They've got a near-term waiver and have brought in refinancing experts to advise them.

Until this is all sorted out, it's very high risk and only worth a punt.

I'm not expecting long term bonds to concluded for quite a while.

IOG never refers to shareholders directly which can be interpreted as a negative on the company's viewpoint.

Remember those who ramped you in but take responsibility for your own purchases as this might not end well but if you fancy a punt go for it :)

Headline should really be: 0.2p-- or 2p or 10p+ because that's nearer the real situation facing investors here.

LOL :)

Conversely I think they are going to do a transaction to clear the debts.

Have they paid for their share of the last drill? Around £15m.

They could clear all their debts and use the cash in the bank as a starter to add with revenue.

They've appointment Smith Square Partners for a transaction of some sort.

Interestingly, they have a senior advisor Mr Andrew Hay , who is a NED at PXEN and formerly a director of IOG PLC.

LOG won't know anything significant as it's now all about the ongoing negotiations with the bondholders.

The question is, are they all going to shaft the current shareholders or not.

50/50 but they only agreed/voted for short term waiver so far, so it's ongoing for long term negotiations.

Here's how a debt-equity swap works:

Issuer's Financial Distress: If the issuer is facing financial difficulties and is unable to meet its debt obligations, a debt-equity swap can be considered as a debt restructuring option.

Negotiations with Bondholders: The issuer enters into negotiations with bondholders to propose the debt-equity swap. Bondholders may agree to the swap if they believe that converting their debt into equity will offer the potential for higher returns in the future, and they have confidence in the company's prospects.

Exchange Ratio: An exchange ratio is determined, which specifies how much equity (shares) bondholders will receive for each euro/pound of debt they hold. This ratio is crucial as it will determine the ownership stake bondholders will have in the company post-swap.

Conversion of Debt to Equity: Once the terms are agreed upon, the bonds coming due in September 2024 will be converted into shares of the company's stock according to the predetermined exchange ratio.

Impact on Bondholders: Bondholders who participate in the swap will become shareholders in the company. As shareholders, they will have ownership rights, including voting rights and the potential to benefit from any future growth and profitability of the company.

Impact on the Issuer: By swapping debt for equity, the company reduces its overall debt burden. This can lead to lower interest expenses and improved financial flexibility, as the company now has equity investors rather than debt holders to repay.

Risks and Benefits: While a debt-equity swap can provide relief to the issuer, it also involves risks for bondholders. If the company continues to face financial challenges or does not perform well in the future, the value of the shares received in the swap could decrease, leading to potential losses for bondholders.

I just roughly worked out a debt equity swap at 2.5p per share

Debt = €100m + 9.5% interest + £11.6m loan notes

Using €1 = 87p

2.5 pence = 2.5 * (1/87) euros ≈ 0.028736 euros

Number of shares = (€109,500,000 * 87) pence / 2.5 pence per share

Number of shares ≈ 3,798,600,000 shares

debt-equity swap of loan notes £11.6 million with each share valued at 2.5p, approximately 464 million shares.

Total debt-equity swaps + Shares from the rest of the company

Total number of shares = 3,798,600,000 shares + 525,037,353 shares

Total number of shares ≈ 4,323,637,353 shares

So it's feasible that the company could pay off the €100m bond + interest and the loan notes. Leaving the company debt free with a share count around 4.5 billion shares.

On the subject of refinancing, nobody knows what this is going to look like positive or negative, but they amended the short term and had a bondholder vote, so it would be reasonable to think if they were going to amend long term there would be another bondholder vote.

You missed this more relevant part for IOG as they are looking at refinancing:

The industry is facing sustained funding challenges from the toughened windfall tax, which has made lending more complicated, with multiple firms pulling out of domestic projects including Harbour Energy, Enquest and Total this year.

After all this is AIM listed and that has a unique way of making shareholders collateral.

Probably best to see what this refinancing is going to look like before making any predictions as the bondholders will be served first and foremost.