The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
Even though I'm a WG guy, I have no inside information or knowledge of PFC operations, but if anything is to sold I see the whole O&M being offloaded, even if classed as core. What's left is the future and I feel PFC will be bought and repositioned in the renewable and fossil sector, with a greater weight towards renewable energy, a subsequent buy-out and/or move to a more acceptable and friendly exchange, possibly in the MENA region, with a literal change in the name of the company to something more energy friendly. That all makes sense, even the large II and just rollover and in to the new entity, those that don't will have to be bought out at acceptable levels i.e. after the balance sheet is corrected which with the O&M sale would be fairly quickly, possibly within a year of the conclusion of a O&M sale.
Just my own musings, and probably wishful thinking because I'm 60% down at the moment.
GLA
Correction WG SP at 160p as I type, possibly more investors backing the WG horse at the moment?
GLA
I don't think WG are immune for the market conditions at all. WG were shorted heavily in exactly the same way, however and like here, that occurred after the new CEO was installed and undertook a strategic review. One might be cynical but putting pressure on a new CEO seems to be game (SP to 130p), the upshot being at WG came the sale of the Built Environment business for $1.7 billion, only then did the shorts have to relent but not before trying again between the announcement of the sale and then confirmation of the sale a fair few months later. After that Sparta went public (SP 150p as of today) adding fuel to the fire and then the arrival of Apollo (SP moved to circa 220p with bids at 245p ish level), all after the balance sheet was cleaned up of course. Could the same thing happen here, possibly?
However, a note of caution if you look at the WG SP today (back down at 150p), even though the past week or so we've seen it increase, today the SP is roughly around the same level after the BE sale and Sparta got vocal, but WG have still pocketed $1.7 billion, go figure. It's also worth noting, as I've mentioned before, the debt pile at WG was roughly the same as the value attributed to the BE sale.
On the face of it WG undertook a strategic review prior to the heavy shorting happening, it would have to be really stupid and boarding on the act of corporate negligence if the new PFC CEO had not started a strategic review at the time he was installed. On the assumption that he/they did, by the time the large short positions started to move the SP downwards (no doubt based on some inside knowledge of corporate undertakings), PFC should have already known the position they were in and taken the mitigation to at least game out and plan certain scenarios. The only confidence I can take from this whole debacle is that was the case, and certain elements of the recent months suggest that to be the case. I have no doubt the large funds shorting would have some knowledge of corporate activities, but I stress would not have been aware of the full picture and took advantage at the appropriate time up until the next corporate event in the financial calendar, with the bonus that macro events helped greatly with that.
Even though the SP has fluctuated wildly the past 2 weeks, I have not bought anymore (50p average), even though it would’ve pushed my average down greatly, and probably more fortunate than most. Personally, I’m just holding until the update next week, and I’m optimistic of good news, but I’m preparing for a compromise and the long haul (next 2 years) to get back up to the 80p range, that’s if no bid for the whole of PFC happens thereafter, just like at WG.
GLA
One thing that may happen, and I stress may, if a dilution occurs, in whatever way, then once the balance sheet looks a bit better, at the expense of SH & Bondholders, then afterwards, and an unknown timeframe, an offer for the company may be made? The similar/same thing happened at WG. and it was only a couple of months after that Apollo approached WG. after their Build Environment sale of $1.7 billion.
GLA
Garcy you are totally wrong, in fact your figures are absurd and in realm of fantasy, just goes to show the narrative you are trying to push, "they need a billion," pull the other one. Your monthly wage bill estimate is even worse.
At most they will need a couple of hundred million to cover short-term funding concerns, which can be done or achieved in various ways, or even a combination of ways. Monthly wage overhead costs, more than likely £20 - £30 million, and not forgetting they are already meeting the covenant obligations.
I suspect we will see the same kind of trading days up to the 20th, may be a little pop up before on the anticipation.
Volume was healthy but roughly equal if you believe the trade reporting. Shorts increased for 2 reasons, in part to scare, and mostly to suppress in order for them to make a seemingly smooth reduction and/or exit prior to the 20th., without an inflated SP between now and then.
GLA
The balance sheet/accounts will I have no doubt change after the 20th if the CEO et al knock their heads together in sensible way, which it looks like they have been taking preliminary steps to do so, curiously since the time of the worst showed up on this board.
GLA
GLA
At present:
Min = 75p - 90p
Med = 90p - 110p
Max = 110 -125p
GLA
Spot on Paul, like we've seen in the Government backed bond markets, when there is a disconnect due to whatever event, LDI's here in the UK, even Corporate bonds can be adversely effected by similar events, but all very specific to the Company involved, hence it appears the BH may have been shorting to cover their positions, as they obviously had wind of the plans, which I think shows talks or formal discussions have been well underway for a while now. Hopefully fully resolved and outlined on the 20th.
There is always a bit of give and take, failure though is very rarely chosen as the last resort by all stakeholders.
GLA
Any thoughts on enterprise values of the non-core assets or each division?
GLA
Funny how the worst turn up after 10:00am GMT, I do wonder where they are actually based?
GLA
I read it as "reaching contractual settlements" as actually completed, done, settled, capital inbound. If there was an element of doubt in that, or, not fully settled, the wording would've been absolutely different and a little more vague. It appears the TenneT cash advance is delayed until new year, and likely will be combined as a advisory note when the 2nd announcement is rubber stamped. The German side of the project will not want to lose face, and although all are facing financial constraints, the cash advance will land, the project is a no brainier and the German and Dutch know this only to well after the turn of world macro events over the past year and a half. Plus they won't want to be upstaged by the British at COP28, although RWE has some of that business, oh yer and Masdar.
GLA
It will be like a flight of stairs on the way up, 5p a time, but who knows what the timeframe will be? Based on this morning "kitchen sink" RNS, it might be a bit quicker than some think, as they will not want to leave themselves open now the information they obviously had to hand is now rightly in the public view and glare of all interested stakeholders.
The shorts are now not the biggest fish in the pond. There is always someone bigger, better, stronger, and more wealthy than you.
GLA
.......and coincidently 50% of the earlier lows of this morning, funny that.
GLA
We could see 10% of share capital switch hands today, albeit it could be the same shares a few times. Nonetheless if reached that would be approx. 50% of shares on loan according to posts over the past week.
GLA
• Covenants not breached.
• FCF now highly likely in 2024
• Recognition of separation of non-core assets
• Recognition of possible separation/sale of all assets
• II or cornerstone investors could inject capital or give assurances to lenders
• Banks will be happy to negotiate an extension of credit lines and debt based on all the above
• This in part or full could all be cleared up by 20th, as new NED will commit a significant portion of time to supporting the Board for a limited period
GLA
Where
Correct that one is still up, good try to keep the negative narrative going though, although were the SP it doesn't really matter, the only thing that matters is what the Company says next, nothing more or less matters at this time.
GLA
Page message display:
"This isn't the page you're looking for"
GLA
Bob, this is the link which is down:
https://www.tradingview.com/news/reuters.com/
GLA