Member Info for devonplay

"behaviour of creditors shorting"
It's just a mechanism to manage risk, it's risk mitigation. There's nothing problematic about that.It's like stock lending. IT's do it all the time to protect their investors. In this lking of market you'd hope plenty of them are at it. They do it to mitigate risks and enhance returns.

"I do strongly think that creditors of any person or company should be acting in a more friendly manner during the falsely harsh trading conditions of this pandemic. "
-they have, they've found you a rescue deal.

It isn't negotiation you have to worry about, it's the collapse of the rescue deal and the credit default that would follow on it's heals.
If that occurs the company could face a credit call that would see it's debt swapped for equity and creditors would then be able to push thorugh any deal they wanted or the company could face administrations.
Companies dont use suspension to protect themselves against a falling share price, where in this case shorters provided the price discovery, they do it when they are faced with a substantial corporate event.
For PMO that would be a technical default without creditor goodwill. They've already said they are going to default on the May maturity of their £150m notes...if they don't get an extention or rescue..that's a big problem. We know the cov's are going to betested again in a couple of weeks. All that's know in the market, so there's no irregular market in their shares, another reason for a company suspending trading, but insolvency is a different order of things. Technical or not.

of course, suspension of trading could be an alternative to delist.

". We just continue paying down debt into a rising oil price market next year. "
Does that include the payment the Co. has already said it's going to default on? It's hard to believe that after putting a deal together that works for them, creditors will roll over just because shareholders vote against it and THEN accept a default..they'll just convert their debt to equity, dilute the existing shareholders down and block vote it through ( maybe via a delisting and admin). At this point anything else, just looks like wishful thinking.
Delisting would be inconvenient to the rescuer and could futher reduce equity value.

It would require goodwill on behalf of the creditors, which appears to be absent, and a "third party" entity who is willing to merge, who also appears to be absent.
On the face of it that describes where the company is at, so any other deal or alternative structure is truly absent.

"Could any rational banker/financial entity send a company like this bankrupt"
Maybe when it was going to default on it's debt? In any case they haven't sent it into administration (yet), they found a willing partner to provide a rescue deal.

The Rolls-Royce of Junk Bonds Has Arrived
Bloomberg Opinion.
3rd biggest junk bond sale of the year...how the mighty have fallen.

"With out change all this deal does is give Chrysaor a market place to off load shares and us a very small 5 -5.45%"
Perfect exit strategy for PE, reverse takeover. This rescue deal also gives creditors, taking equity, an exit. Risk of there being a tsunami of sellers once lock-ups etc have gone. But don't worry, nature and markets abhor a vaccum...so step forward retail investors hoping to make a quick buck. Once the other 95% have deleveraged, there will be at least 5% looking to buy.;)

"Maybe already discussed somewhere here but what are the next dates / announcements we are waiting on ?"
I presume either the Prospectus or Re-test of Covenants.
It's gonig to be interesting if the re-test comes first, early Nov., if the re-retest dates is very short, like the last one, rather than the date of the proposed resue deal Q2 '21, which I premuse (again) has to be before the maturity date (May) of the 150m repayment to avoid a true (technical) default.

It's been a really interesting conversation this afternoon. I remain pleased that I'm out against that backdrop of complexity.
It's fascinating watching it unwind. In the sense of story, not a company. LOL

To be honest Jennifer, I don't think the structure matters, as much as the acceptance that creditors could still engineer an outcome for shareholders worse than what's on the table. I've come to the conclusion, they could still retain the tax credits. The alternative, just doesn't sound practical.

That can't be that can it, as there is going to be a change of control.
You might argue that it may be the process of admin, but companies use that as a safe harbour, so it seem impractical you would srip a company of it's tax credits at point when it's under pressure. That doesn't feel like its the best option to returning it to continuity of business.

they'd form their own vehicle, reverse in, as Jennifer says at a pittance. Easy.By that time the Co. would have been delisted through the adim process. Credits intact.
Low blood sugar level. I'm going to make something to eat .

"Her Majesty may want some money ring fenced from sale of assets for decommissioning costs."
Wouldn't logic dictate those were tied to the assets incase the parent/holding company ceased to exist?
That's why I'm tempted to go with Matt as it feels like more common sense. That you can transer an asset, fold the parent in, and see the operating company as going concern, with the tax credits in situ.?
As I say, I don't know.I'm just trying to apply logic.
Outide of the start-ups going under the only one ( any in those case shareholder never get anything )I've been through was Debenhams and I did the bond holder side.

Hi Matt, I guess this is the structure https://www.premier-oil.com/about/group-structure
I presume they are shareholders is in ExCo and the tax credits lie down somewhere with the UK /Exploration Businesses?
So, it's just the natural transfer of an opertaing business, independantly of the holding company. The holding comany doesn't need to exist for the tax credits to be moved forward.
That would make practical sense. English Law is pretty much based on common sense.

Buzz, that depends on your question?
It is likely, I don't think so, but it is possible.
Can they do it in law? Yes they can, I believe they can.
Tax Credits. Like most things in life I'm not an expert in it. But, I believe the legal entity that a business is, isn't that same as the members that own it. So, it's possible to have a structure where the tax credit lives that maybe seperate to vehicle that owns it (and you are shareholder in) Hope that make sense. But that's way above my pay grade and understanding of PMO's structure in enough details
But this I think this illustrated the point, if the company can be taken over and the tax credit still remains in existence is it conceivable that the same couldn't apply if the company came in and out of admin. with new owners?
I don't really know, but I wouldn't want o back on it without proper advice. Maybe you know? Is the holding company seperate to the operating business and if so, which one owns the tax credit?

No problem Phil, none of us are experts. It's a very complex area.
I think only explanation is confidence, the Board either lost , squandered it or the creditors just ran out of it.
Such are the times we live in.

It's the approx value of the equity. Maybe you could say £150m. As much as anything it's just a number.

Yeah, agreed. There's still c£180m up for play if they really wanted to play hard ball.