Member Info for devonplay

thought some might find this intereting from the RAC:
https://www.raccorporate.co.uk/for-investors/results-reports-and-presentations#newstab-1
Bond holders confernce call and presentation.
I hold positions in both AA & RAC

'At least many of us still playing the money game', yeah, unless the other team plays it's inflation card!
I think the only game to be playing at the moment is diversified, so cash, gold, equity and fixed income.
Still, at least cash doesn't go down overnight...it's decline can come through an array of tiny cuts

Agreed, held them for years. Good company, good balance sheet. And to some extent they provide an opportunity when markets race ahead.
Decent bit of news this morning and decent little rally to go with it.

I've always thought so, I've been holding the shares for a long time, 5+ years, I was planning to top-up in October. After todays news, and subsequent rally, it's looking good for the near future.

Hi Nobull, yeah it's more often called Yield To Maturity, but yes I think you could call it redemtion yield:
coupon, running yield and yield to maturity are the most commom terms.
You are right it's around 75% of par, there's isn't a market in them as such, but my last purchase was round that. I don't expect to use the warrants any time soon, but I'm sure we all live in hope LOL
You are correct again, there hasn't been any on WiseAlpha for ages. No one wants to sell, you might find some available elsewhere, but it might come along with trade size of c£100k. But, I doubt it.
I've been increasing my holdings of short dated and high debt/BBB on a selective basis. In addition to adding to discounted IT's in selective areas. I appreciate their diversified holding at times like these.

Have a nice day everyone. Off to Salcome and the beach.

"Your argument has merit although is missing one vital point, it being one of the most shorted shares."
But as you know, the largest shorter is also a major bond holder - as I understand it. They benefit, but if you aren't short the equity, as that will be the majority of institutional fixed interest investors, then it's not an issue for those fixed interest investor, they (I would expect) would want the reverse. Of course when anyone depolys their capital they are looking to make max. returns. That's capitalism for you! ;)
Also do you think the refinance will go through? I'm not an institutional investor, so I don't know. The debt market is controlled by a handful of banks, and to some extent hedge funds who use it as part of their hedging strategy, so your guess is a good as mine. I hope it does it that helps.
Unfortunatley, it's a gamble when you invest in anything but investment grade debt, companies use debt to leverage equity returns, but it;s more comfortable when it's the other way round in most cases. More equity v less debt. But, yeah you can invest in some debt with the guarantee that the assets will raise enough to cover the lending if the enterprise fails.
But as I've said, you can also invest in both as a hedge, in thoses cases if the assets are able to meet the obligations and your short takes place when the company fails it's possible to make a very decent return - a return on the short and the debt if you can buy it at a discount to the asset value when it's realised. High risk stuff indeed.

"assuming they get the required 75% from creditors."
Why would they not?
The last press release usggested they had 45%, the reasons might be as diverse as the holders, holding the debt. But, the main arguement is that the transaction being planned might materially put the company at greater long term risk and so it's obligations to debt holders might be even more stretched. It's been reported some creditors are concerned about the long term additional commitment the company might be taking on board, hence more risk for it's creditors. Creditors don't benefit from the capital gain reflected in an increased share price, unless they might also be holding warrants related to the debt, so it's about risk profile. If the existing assets could satify obligations, and the transaction might only add to risk, you could understand why they might with hold their approval.

"Thanks for your thoughts :-)"
No problem, just my thoughts, I could be very wrong indeed. At the moment my bet on PMO1 is still profitable, that could change very quickly.
Good luck with your investment.

"Noting you are long on PMO that demonstrates some confidence in the company"
Yeah, I'd like them to survive, if they do, I sort of get a double digit paid on my holding every year and 50% return on my capital at maturity. But, it's only confidence to the extent of 0.3% of my portfolio. I have a side portfolio that gives me around 20% per anum in coupon and 60% on maturity - in very simple terms. Some said earlier that I hadn't got the "**lls) for risk, they've obvislouly never invested in synthectic junk bonds LOL - I don't expect to make those returns if I'm honest, but I live in hope.
I'm sorry, I don't have an opinion of the future of it's share price. I don't often invest in oilers, I just thought on this occasion is was worth taking a punt on the debt available to retail investors.

"Would you not agree that a lower share price is beneficial for debt holders?"
No, the share price is an element of the company's over all health. If they could fund their plans and use cash flow to pay coupons and down the road redeem it's debt, a higher share price would be immaterial. It's only material when you try to take a snap shot of the companies position, as it implies the value the market applies to it's assets and future earnings.
A higher market cap, share price, means in principal there's more to burn through before reaching debt holders if the wheels fall-off. The only difference I can think of is if your long on the debt and short on the equity. It's decent way of hedging an institutional size hedge if you can buy the siscount to par. In simple terms, if you equity short fails, that means the company (in principal) is doing well and the discount to par on it's debt should close.

"Having admitted your interest is debt related"
I'm not trying to offend, but with companies like PMO, equity (190m) v debt (1.9) - and potentially in breach/default down the road, you can talk about much else but debt.. The debt holders are in fact the largest stakeholders in the companies future.
That's why the debt position is as important as the price of oil and , as of today, maybe even more important.

As a PI shareholder:
1 Will I be offered new shares?
2 At a discount to screen price?
3 At/before 30th September?

- that's the million dollar question, assuming they get the required 75% from creditors.

"I will say however that you have an agenda."
What agenda could I have? I'm not telling people to sell, I'm just quoting the company LOL
I can only give you my own opinion and I've been very clear that I might be very wrong.
My own spin is that I bought a small slice of debt for my portfolio. I'm an investor in equity, debt and start-ups.
As I've said; I'm long the companies debt, so it's future. I'm just of the opinion there's more value in the debt.
"which is more suited to someone working on behalf of an organisation" I wish, I'm a full time private investor. LOL
-obviously with good manners ;)

"The cash raise will almost like be in the form of Rigts Issue.
No way they can raise over $300million through the placing.
Price will be 10p or under"
Whatever the strructure of that raise, I agree with you. I expect it to be discounted from where we are today.

That's OK Buzzard. I just wouldn't take it as gospel. I'm just interested in Corporate Govenance/Finance.
It's fascinating when you see a company (potentially) in breach of it debt covenants talking about defaulting on it's debt obligation, and the possibility of lenders calling in 1.9b, at the same time talking about making a major acquisition.
In the midst of a difficult economic landscape.

straight after an EGM

"Devon thank you!"
Pre-emption rights are a central part of UK governenance concerning shareholding. It's well covered in the Company Act..it's actually a really important piece of protection for private shareholders, but it doesn't stop them calling an EGM for the next stage of this ( as I understand it) and asking for the powers for disapplying pre-emption rights. I believe in exceptional circumstance, like in the face of insolvency, they can take that right without reference to shareholders. It's a way of protecting creditors against disgruntled, dissenting shareholders. If I was them, I'd ask for powers to disapply pre-emption rights so I could do a placing straight after the AGM. You'd need to do an analyses of the share register to see how thpractical (and desirable) that was, have a view of the pre-book building and seek legal advice. I'm not a corporate laywer! It's just after months of this dragging on, I'd want to have the cash as quickly as possible and a placing is faster, as far as I'm aware , and with less risk. Just think what would happen if you couldn't get the Rights Issue away when you could get the placing away before you've even undertaken the book building proper. As I've said, that's only my opinion. Anything is possible and I could easily be very, very wrong. I didn't do much work on this, 0.3% of my portfolio, so I was happy to take a punt of a 50% YTM and, as far I checked, assests, excluding intangibles, roughly equal asset to the debt liabiltiy. That would have deteriorated since the last set of figures I used. So, I just don't know. I just wouldn't bank on it. My guess, without seeing the Pre-Emption Group’s Statement of Principles, is they are obliged to offer them, unless they ask for the power to disapply them which I would, if you could. Hope that all makes sense.

To make sense of that I guess you should read the "the Pre-Emption Group’s Statement of Principles"

here's the relevans section from the Notice of Meeting:
Special Resolutions
Resolutions 18 and 19: General disapplication of pre-emption rights and specific disapplication of pre-emption rights in connection with an acquisition or specified capital investment
If a company proposes to allot Ordinary Shares or other ‘equity securities’ (including by way of sale of any shares which the Company has purchased and has elected to hold as treasury shares) wholly for cash, it has a statutory obligation (subject to certain exemptions) to offer those shares to holders of similar shares in proportion to their existing holdings. Resolutions 18 and 19 seek to disapply this statutory right of first refusal to a limited extent to give the Directors the power to allot Ordinary Shares (or sell any Ordinary Shares which the Company holds in treasury) for cash without first offering them to existing shareholders in proportion to their existing shareholdings. The powers under Resolutions 18 and 19 shall last until the conclusion of the Annual General Meeting of the Company to be held in 2021 or until the close of business on 24 September 2021, whichever is the sooner.
Part a) of Resolution 18 provides the Directors with flexibility to deal with practical issues such as fractional entitlements and securities law restrictions in overseas jurisdictions when making an offer that is otherwise pre-emptive, and would apply to any allotment of shares under Resolution 17. Part b) of Resolution 18 contains a broader general disapplication of pre-emption rights up to an aggregate nominal amount of £5,249,153 (representing 41,993,224 Ordinary Shares). This aggregate nominal amount represents approximately
5 per cent of the issued Ordinary share capital of the Company (excluding treasury shares) as at 18 May 2020, the date of this Notice.
In accordance with the Pre-Emption Group’s Statement of Principles regarding cumulative usage of authorities within a rolling three- year period, the Directors also confirm their intention that no more than 7.5 per cent of the issued Ordinary share capital (excluding treasury shares) will be issued for cash on a non-pre-emptive basis, pursuant to sub-paragraph b) of Resolution 18 and equivalent authorities in other years during any rolling three-year period, without prior consultation with shareholders.
Resolution 19 is intended to give the Company flexibility to make non-pre-emptive issues of Ordinary Shares in connection with acquisitions and other capital investments as contemplated by the Pre-Emption Group’s Statement of Principles. The power under Resolution 19 is in addition to the power set out in Resolution 18 and would be limited to allotments or sales of up to an aggregate nominal amount of £5,249,153 (representing 41,993,224 Ordinary Shares). This aggregate nominal amount represents an additional 5 per cent of the issued Ordinary share capital of the Company (excluding treasury shares) as at 18 May 2020.