RE: Could IPA work this time around?3 Sep 2019 12:09
Morning Lost.
"As things stand, there is a real possibility (no more or less than 50/50 IMO) that the HY bonds don’t sell,.."
With recent positive change in market attitude toward the bonds already out there that are risked at the same 'B' level that Sirius have been rated at I would give Sirius's chance of success with these bonds now at far higher than 50/50, more like 95/5 to 100/0.
But just to repeat the further options aisi if this present plan cannot now go for some new reason and before Sirius need go anyway near a what can only be described as a preoccupied, febrile and likely ephemeral gov, there are many more ways ahead that can be explored first. In order of priority:
1/ sell the bonds as proposed in part to the market, JPM retain those unsold and sell that balance on later - we are financed
2/ modify the bond to make it more attractive (could be CBs, add warrants to bonds, a deal for some sort with a stakeholder so they take bonds) - we are financed with possible later dilution.
Both could be concluded without any change to the JPM RCF offer and with no input from gov. Or options that may but do not have to have gov involvement:
3/ find an alternative cash raise that JPM accepts and keeps the JPM RCF deal on - we are financed, may be diluting,
5/ come up with a different deal with JPM - full finance unknown, dilution unknown,
6/ dump JPM and find another way. - full finance unknown.....quite a lot unknown.
All possible but less desirable for present holders as you go down the list. IMO all the above should be examined prior to going back to the gov. doing that now I would think as untenable and nothing would be achieved before the build would have to be curtailed or fully stopped - 4 weeks? Administration would easily follow. Not a desirous path for this already fragile sp.
GK.
Sign In
Follow the stocks
