Member Info for Corryvreckan1

Tyke - MS would not be a concert party by any default, he would need to actively engage with others in the event of any takeover for that to apply. No Director of any company is automatically in concert with others just by default or by way of share purchase.

The BRH deal with TB last October was at 1.1p so that would currently be the highest applicable price (that we know of) for them/TB in concert in the last 12 months.

Where/what is 1.95p from/for?

There are no loopholes from just a change of name. The legal structure of the company remains the same, as does the share price history, shareholdings, market listing, etc. etc.

Phil, in your second para below on the 30% rule the offer would need to be no less than the highest amount paid for shares by the offeror in the preceding 12 months, rather than necessarily the highest price of the shares in the market. From the Takeover Code:

9.5 Consideration to be offered

An offer made under Rule 9 must, in respect of each class of share capital involved, be in cash or be accompanied by a cash alternative at not less than the highest price paid by the offeror or any person acting in concert with it for any interest in shares of that class during the 12 months prior to the announcement of that offer.

https://code.thetakeoverpanel.org.uk/tp/rules/rule-9/rule-9-5.html

Just a technical point and would obviously still need to offer enough to pass a shareholder vote.

'sector' read across.

There's also a few folk on here with Saga policies that seem to fall in to the 'speciality' categ...whaaatttt??? Stop it!

;O)

Maybe a sector read across from Hiscox results well received this morning? Sabre up a bit as well, Admiral trying to.

https://www.lse.co.uk/rns/HSX/hiscox-ltd-interim-results-vyr5zvlrlju6mxh.html

Partly due to the AGM being later as well, dividend needs to be approved there prior to payment. AGM was around end Sept previous years but will be 6th Nov this year. I wonder if that is to give more time to find a replacement CEO, or give Nik 3 months in the role to see how that fits, prior to a nomination vote?

Then need to arrange FX conversion, DRIP details etc, give Registrar enough time to reconcile, blah blah blah - but perhaps still shouldn't need four weeks after AGM given they already know about it now.

Ah...um...thought the LSE censor would have taken care of that? Maybe there's a tariff on asterisks now as well?

;o)

Testicles! Testicles everywhere!

Conditional placing of US$140m today "conditional upon inter alia the occurrence of a final investment decision in relation to Phase 1 of the development plan for the Company's Sea Lion field"

"...we are obviously delighted to be able to announce this equity fundraise, which we are confident puts Rockhopper in the strongest possible position to take FID by the end of this year..."

Sounds like they are still optimistic at this stage, so still the possibility of the AM being moved by the middle of next year.

I estimate an Interim dividend of 3.0 - 3.1p per share (2.9p last year) due to the completion of the two share buy-back programmes since last year’s Interims (totalling £1.75bn, 645m shares), unless the results are exceptional and they choose to increase it further but that would be outside the stated policy.

Ex-Div date could be 7th or 14th August.

Also looking for at least a £1bn buy-back to be announced on Tuesday (£750m this time last year) as any less will leave a lot of work to meet the £10bn total return target over 3 years.

All IMHO, DYOR, pub rules, NIA etc.

I imagine that potential buyers could have been straight on the phone to Total to try to reach a provisional and conditional agreement before submitting a bid (unless there are operational or regulatory reasons why they wouldn't be interested in GLA, I'm not familiar with this?).

Oven ready deal, as someone once said, particularly with the risk of 6 months notice possibly being served on the AM at any time before the end of the year.

Enquest and Serica in the frame, Ithaca decided not to.

I read it as today Thursday for the deadline. The deadline for Lindsey refinery passed this week already without a buyer and is set to close.

https://news.sky.com/story/north-sea-rivals-weigh-bids-for-exploration-assets-of-ailing-prax-group-13401328

Thanks Terry, that message comes up when you press the Get Quote button and I hadn't gone as far as that before. Good that they are honouring the online trade price.

The same message doesn't appear on AMRQ which is available to trade that way (not a cross ramp, just for info, it was just a name change over there that has caused ii problems) so seems to be variable depending on individual share circumstances.

Thanks laser, for “new director appointed seems to be a restructuring professional”. I did wonder at the time if that change was perhaps to clear the decks towards a possible future sale of the business?

Or if it was a standard Administration procedure to seek to remove any Director potentially under investigation from any other internal position of control or influence that may impact on a possible future sale?

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Doesn’t appear to be any mention of Greater Laggan in TotalEnergies HY release this morning, maybe immaterial in the grand scheme of things for them?

There’s a work around on ii – go into your Watchlist (Portfolio menu > Tools > Watchlist) then type in SUPR in the bottom left Quote box, select from the pop up list and then the Trade button on the right side of that line should be active and take you directly to the usual Trade screen. You can add it to your Watchlist first for quick reference later.

Trek – same for you on AMRQ.

If you only see a blank page when first clicking on Watchlist in the menu bar then press backspace on your browser, log out of ii, log back in and you should then be able to access it. Don’t ask me how I know any of this as it’s not official and reflects a serious problem within the platform that ii refuse to fix.

RodneyT - thank you for uploading all of that, must have been quite a bit of work to both prepare and to separate it all into posts. Apologies for not getting back sooner, I still couldn't access the file version without compromising my PC security so stopped trying. You mentioned before that you had used ChatGPT for this - is the detail here all directly from the AI response or is some of this also your own input?

I copied it all into Word to scan through easier and I have to say it's a pretty impressive and detailed summary of many key elements, both historic and current, thank you. It also appears to be very much in line with what we have been discussing here over the last week or two. I see I even get my posts quoted a few times, referenced as both industry commentary (as if!) and a forum observer ;0) I need to keep a closer eye on these AI programmes and start claiming royalties!

I can't see anything contradicting our general consensus on a quick read so far, but thought I would particularly highlight this para as although we have touched on it there is also a key point about dividends we hadn't really discussed:

"Potential Asset Sales or Dividends: Short of selling the entire subsidiary, an insolvent parent (or its administrator) might try to extract value by making the subsidiary pay up to the parent (for instance, via inter-company dividends or asset sales). U.K. law imposes important constraints here. A solvent subsidiary may pay dividends to a parent only out of distributable profits, and directors cannot lawfully declare dividends or transfers that render the sub unable to meet its own debts (that would be a breach of duty and potentially a fraudulent transfer if insolvency ensued). Given that the DCU is a known liability, Prax’s directors would risk legal liability if they siphoned off cash and left the DCU claims unpaid. Additionally, any asset sale by the subsidiary would presumably have to be at fair v [ value? - bit missing] DCU holders have rights to a portion of such proceeds."

I had already drafted a quick summary in case others following the forum (Hi lurkers, how's it going?) were unsure of where they stand. I'll try to refine it and post it up tomorrow as well.

Thanks Ron. Yeah, so the potential scale of any hypothetical guarantees is a risk we need to be aware of, with the possibility to at least ‘squeeze’ any outstanding DCU payments if both elements are unsecured. Perhaps a wider risk then would also be the possibility of having to meet both of those obligations, if they exist, could tip Prax E&P into insolvency as well, depending on how much cover the income from Hurricane continues to provide and any other unknown debts they took on last year?

My faith in the obligations to DCUs in Section 6 of the Deed Poll being to the rescue, to ensure that no guarantees would be given that might negatively impact DCUs, has a hazy cloud above it but it’s not raining yet.

We can only hope not, until the Administrators ring the door bell and try to take away our telly!

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Ned – looking again the current ownership of Prax E&P maybe not quite so clear. In their Feb 23 accounts, i.e. pre-Hurricane, note 6 on page 24 stated “The company’s immediate parent undertaking is State Oil Limited […] The largest Group […] is that headed by Prax Group Holdings Limited. The smallest group for which consolidated financial statements have been prepared is that headed by State Oil Limited.”

In the Feb 24 accounts, annoyingly there are several important notes pages missing from the pdf at Companies House, including what would be the equivalent note to the above. However, it does include in note 2 on page 16 under Accounting policies “The Company’s intermediate parent undertaking, State Oil Limited include the Company in their consolidated financial statements.”

So a subtle change from “immediate” to “intermediate” may indicate a shuffling of ownership lines, but as Ron says still 100% owned within the Group? I haven’t been through State Oil’s accounts yet (225 pages) and my download can’t support a word search but I’ll have a look later.

The Prax E&P accounts also note in several places “State Oil Ltd, an intermediary holding company, has agreed to provide financial support if required.” – I think we can safely say that piggy bank has currently gone missing.

Part 2

2. b) I’m not very familiar with inter company guarantees, but if they are NOT secured with a charge against specific assets then I would expect them only to apply to any FCF available after the guaranteeing entity (i.e. Prax E&P) met their existing obligations (i.e. DCUs)?

In that instance the only other obligation that Prax E&P have is to their shareholder State Oil Ltd so an inter company guarantee wouldn’t be necessary/make sense anyway as they could just pay a dividend to State Oil if required?

3). On HMRC, which seems to be a big concern at State Oil level, I think they are treated more as a preferred creditor ranking above all other unsecured creditors, rather than normally having any security or guarantee in place, unless dealing with a company already causing them problems. Not looked into this much though so open to views, but I don’t see their situation extending to Prax E&P?

On balance I still think DCUs are likely to be ‘safe’, for now, until the Administrators prove that I know nothing!

Side note – while looking on Companies House for the charge details I see that, perhaps not surprisingly, WS Soosaipillai has been removed as a Director of both Prax Upstream Ltd and Prax E&P Ltd on 4th July and then replaced by someone else.

Thanks Ron, expanding on the various points:

1. Purely as a hypothetical example of Prax E&P possibly taking on direct debt last year might be to cover the upfront fees and costs of the Total deal in anticipation of it completing. It would be hoped that those would initially be minimal and serviceable by the FCF already available from Hurricane revenues and any remaining State Oil seed monies, after payment of the DCUs.

Obviously with the collapse of the deal no further draw downs would be necessary and any existing debt then paid off. That wouldn’t then affect DCUs and for State Oil it could be a reduction in the dividends they receive from Prax E&P due to a failed investment. We wouldn’t know about any of that kind of thing until the next accounts. All permissible by the terms of the Scheme but unlikely to impact DCUs, unless Prax were reckless with the amount of debt taken on. Supposition.

2. a) If any debt was secured against Prax E&P assets, e.g. Hurricane, then a charge would be raised and that would have to be registered with Companies House. There have been no charges registered against Hurricane (Prax Upstream Ltd) since Feb 2019 and none at all against Prax E&P plc. They need to be registered within 21 days and State Oil went into Administration on 30th June, so if none appear this week then we should be safe that it hasn’t happened (the risk being that State Oil may have rushed something in place in the final days knowing where they were heading *).

Failure to register them would be a breach of the Companies Act (?) but any sensible secured lender would have it as a condition and also on their checklist to ensure that the charge was registered, as to not do so would cause them complications in the event of default.

State Oil Ltd had several different banks raise charges against their assets over the years but all appear to have already been satisfied.

Ned – in terms of separate legal entities, if Prax E&P are a 100% owned subsidiary of State Oil Ltd would they not then be able to offer that ‘asset’ as security against their own debt? And then by default with Hurricane as 100% owned by Prax E&P being the ultimate security?

* My twitchy, libel sensitive lawyer has advised me to make it clear that this is part of a hypothetical situation and in no way an accusation of malpractice.

Continues…

So, having my bias challenged was a good thing. In the interests of balance against any entrenchment I may have had, the following was in a blind spot for me.

I have copied below from the risk section on page 74 of the scheme document; it speaks for itself, particularly the second sentence (my asterisks for emphasis). This is not a new risk specific to the current Administration proceedings elsewhere in the Group. If Prax E&P have incurred other debt as described below during the year since Feb 24 then we would not necessarily be aware of that until the Feb 2025 accounts are published later this year, or later notification.

Ron – is this in line with your cautions?

“The following are specific risk factors relating to the Deferred Consideration Units:

The payment obligations of Prax [*Prax E&P*] with regard to the Deferred Consideration Units are unsecured obligations and DCU Holders will rank as unsecured creditors of Prax in the event of the failure of Prax to comply with its obligations to make cash payments and issue Loan Notes pursuant to the terms of the DCU Deed Poll. *The DCU Deed Poll does not contain any limitation on Prax’s ability to incur indebtedness, including secured indebtedness, which would rank senior to the Deferred Consideration Units.* The performance by Prax of its obligations pursuant to the DCU Deed Poll is not guaranteed by any of Prax’s subsidiaries or any other person.”

It still only becomes of concern if Prax E&P plc also fell into Administration, e.g. if the revenue from Hurricane can no longer service all debts in place, and it currently remains supposition if any other debt has actually been secured by Prax in this manner.

For further balance against the possibility of that risk materialising the Deed Poll offers some hope in section 6 (edited for relevance only):

“6. OBLIGATIONS OF THE COMPANY [*Prax E&P*] TO DCU HOLDERS

6.1 Undertakings

6.1.2 The Company shall (and shall procure that the Hurricane Energy Group shall) operate the Hurricane Energy Group business in the ordinary course of business and not take any action which would or would be reasonably likely to prevent or restrict the payment of the Deferred Consideration Cash Amount or the Deferred Payment in full (including, without limitation, by deferring lifting or production).

6.1.3 The Company shall (and shall procure that the Hurricane Energy Group shall) not take or omit to take any act, matter or thing (including, without limitation, entering into any transaction other than on arm’s length terms) the object or potential effect of which is to avoid or reduce the amount of any DCU Cash Amount or Deferred Payment.

6.1.5 The Company shall discharge its obligations under this Deed in good faith and shall use all reasonable endeavours to maximise the Deferred Payment.”

Obviously still some subjectivity in there for interpretation.

This fence is uncomfortable so I promise I’m gone this time…