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This
"There are so many variables in between, we simply don't know, you're as well to ask the fairies under the mushrooms, at the bottom of the garden."
Is perfectly true. There are no absolutes in this, so many things could still go wrong or right.
"Yes, it's blindingly obvious if it all goes skewy, the bond holder won't get their all their money back next year....duhhh"
>If its so blindingly obvious that the bond holders wont get all their money back next year, then what did you mean by this statement below?
"Painless .... explain to me why the Bond Holders would sell now, at such a low price, when all they have to do is wait until next year.... and then get the full price...."
Of course there are no benchmarks in bondholder recovery, but Xcite is a good precedent. Why not?
"One reason could be the Bond Holders might think HUR may default on their debt, that's pretty easy to understand ...no ?"
>If this was the case, they would sell their bonds at these relatively attractive prices, before they get next to nothing, no?
Just to use Xcite as a recent benchmark on bond holder recovery in liquidation:
https://en.m.wikipedia.org/wiki/Bentley_Oil_Field
“ The company was due to repay 139.05 (USD m) of bonds which fell due for repayment on 30 June 2016“
“ The petition to place the company into liquidation was heard by the Eastern Caribbean Supreme Court in the British Virgin Islands on 5 December 2016.
Licence P1078 was subsequently licensed to Whalsay Energy, who have sold it for $42 million to Enquest.”
Whalsay being the vehicle created for Xcites liquidation.
42m vs a 139m repayment, ie around 30 cents on the dollar.
Whereas HUR bonds are trading at 64 cents from as little as 26 four months ago.
if the adhoc lot truly feared liquidation they would be selling these bonds off non stop at these prices.
The bonds are callable - which means the company can redeem them, however they are classed as ‘special call.’ A special call is one that can only be pulled off in a few circumstances notably an impending crisis…there’s a few articles on this out there. In other words if the co were attempting to redeem perhaps the AHC thought they could legally trigger liquidation as the circumstances behind redemption via special call suggest something like that happening.
Maybe. Just a thought. Typically where you have a callable bond there is a schedule by which you can start, as the issuer, to redeem or ‘call’ the bonds. I don’t believe we have that flexibility, but can’t say we don’t. The answer would be in the trust deed or whatever it is that governs these conditions and all the other technical stuff related to the bonds.
Bonds are trading at 64 cents.
The issue size of the bonds is 230m.
230m*.64 = $ 147,200,000.00
There was a $134m cash balance as reported to 30 June 2021
I believe the bond market is valuing the bonds based upon the perceived unencumbered cash balance of the company. This implies that between the last reported cash balance of $134m as at 30 June, the bond market attributes $13.2m to the unencumbered cash balance on top of the 30th June reported figure of $134m, or $147,200,000 / .64 cents bond price.
Will be interesting to see if, following operational updates if no issues arise and the oil price keeps steady, the bond market continues to bid the price of the bonds to match what the likely cash balance is.
Now, now Bart. My ears are made of silk, not cloth.
We haven't got a plan....
...the BOD has been in place little more than a month.
nor have we got $ $ $ ....
there is what, $140m of unencumbered cash on the balance sheet?
As I said cloth ears; "One reason could be the Bond Holders might think HUR may default on their debt, that's pretty easy to understand ...no ? You can't guarantee they will, nor that they won't ...
In what world do you reside where bondholders get paid 100% of their investment in bankruptcy? That doesnt happen. 30 cents on the dollar perhaps. In the lead up the bankruptcy the board - acting in the shareholders interest, will spend all remaining in cash in an attempt to keep the business going. So what do these bondies get when it goes to liquidation? Remaining assets of which are...what precisely?
If the bondholders choose not to sell their bonds - again, anathema if they truly believe this is going to down the pan, then they are holding the bonds because they believe the business will succeed. If they believed otherwise, they would sell. The funds holding the bonds would be directed by their investment committees to get whatever they can for them which at the moment is...about 64 cents on the dollar. Which is a far way up from around 26 cents on the dollar at their nadir.
These ears hear what you're saying, it just doesn't make a lot of sense.
So, hold up here.
"why the Bond Holders would sell now, at such a low price" Because, as has been stated routinely by them and expressed by the former BOD, they are terrified this thing is going to go bust. Surely they would accept the exchange price of 64.05 for each bond then wait around until next year when they perceive they will get nothing?
If they truly believed that HUR would default on it's debt theyd be slinging these bonds out at these prices.
As a plan is created and cash flows, this assertion, that the bondholders wouldnt sell, will reveal perhaps for the first time an interesting logical fallacy: that bonds that bondholders fear will be worthless will somehow be worth par (100).
What you are saying is just silly.
here you can find a chart of these bonds where the price hasn't gone up:
https://www.boerse-frankfurt.de/bond/xs1641462277-hurricane-energy-plc-7-5-17-22
The price, as displayed on the chart, does not appear to have risen from 29 vs par to 64 vs par as of today.
2030? I guess HUR doesn't need to worry then, because its 100% totally going to go bankrupt next year right?
it is true. Why would so many go through so much trouble to gain ownership of something that is valueless?
Lol this is ridiculous.
A board that tried to hand the company to bondholders on what was a dodgy pretext (else the high court would have agreed).
People pretending to the CEO and emailing US Law Firms ("we need help bankrupting my company")
Rizwan Hussein, the Clown of Securitization trying to pull a fast one and...
Nicola Sturgeon concerned about the Climate Emergeny...
What Next? an RNS confirming Greta Thunberg is taking majority control so she can shut this down.
Good lord. WTAF.
Mike you kill me sometimes, that was sharp. I'm all on board with your cynicism.
it does *feel* different.
There are these mystical times when the sp rallies for no apparent reason - like back in Nov 2016. Typical pop and drops are MM fed driven by news and such. This feels organic. It's on volume etc...
and theres a '1' trade for those who believe in such things.
best of luck
CBS
Currently challenging multi-year resistance.
if it pops through this, I think three figure oil is on the cards this year.
https://invst.ly/vcb8s
best of luck
CBS
was hoping upon hope it was a sale of our subsidiary Zao Kun Manie. Sadly not.
~$9m cash in the bank is no bad thing. No income stream any longer though.
Exactly Mr Wilks
It will be interesting to see what the over the counter market for the bonds looks like. A 40% discount on par (usually 100), so say trading at 60, where the coupon was 7.5% when the bonds were priced at 100 is very tasty (you're getting that coupon at a massive discount). If the market believes that HUR can redeem in a year's time, those bonds will incease in value back to par. That will be the true test of calling bs on this entire misadventure the last year or so.
Hi there, lurker for the most part and recent investor.
Seems yet another Damocles sword has been disappeared: "any consequential right of the Company's convertible bondholders to accelerate the convertible bonds has lapsed."
The threat of the acceleration of conversion gone...I can only imagine that is extremely positive.
Good luck all
CBS
i believe that is Winterflood Securities, a market maker
only shows 500k at that level...im sure if it gets filled the other 500k will pop up
would be funny if someone took the pss and threw 100k at this, it would probably pop that 1.8