George Frangeskides, Chairman at ALBA, explains why the Pilbara Lithium option ‘was too good to miss’. Watch the video here.
I really hope a case is taken by MA just for Pearls and SS. What kinda money yous guys lose? If you want a tip a July call option on BMW will get you your cash back.
And lastly re MA ................I guarantee if I entered and completed a business deal with the great business himself I would understand what it means to be bought and sold....I wonder if anyone else thought the same.........there was only one planned haircut here and I don't think MA had planned to go to the barbers!
Pearls - If you were aware of this sudden increase in debt and were stunned why did you not get out. I am not aware of the finer details of the accounts but 286 to 740mln are you sure? Did you not just say you were following MA and the BOD. If you bought shares based on your knowledge of the finances you still had time to exit based on this unforeseen information about the sudden increase in debt.
Re City AM article - yes it would give anyone some glimmer of hope but all he is saying is that based on his observation it was an appalling use of the PP process. The speed of matters was rapid. I understood though that the BOD/lenders had been seeking professional advice for months on matters so it wasn't as quickly put together as it is portrayed.........but hey seriously what would I know........that gent speaking on the matter is a pro in this line of work.
Knigelk - forget about debs....trading is gambling! Yes some 1-2% do it successfully. But if you do not know that forget about it.
Knigelk - Yes you are correct I would be down about the whole thing, but I would hope I would do a number of things, accept what had happened and try to learn from my mistake. I would hope I would be able to have a good look at myself and say lesson learned I am not the hot stock investor I thought I was. Maybe I just need to buy index funds. If I cant stop buying stocks why not? Gambling is fun but it may be a problem. Do I know the difference between gambling on stocks and investing in stocks? Do I understand what graham is saying when he talks about the margin of safety concept. Maybe I just don't have the temperament to be buying stocks!
BTW - Simple maths and finance. If someone is insolvent is it wise to borrower more money to put off the inevitable? Debs was insolvent as called out by the board. So income was unable to meet on-going expenditure and liabilities and was also decreasing. The retail sector is in serious decline so was anyone really expecting income to increase over the medium term. Where was the hope value here. It was no Tesla where income cannot meet debt/expenses, however the hope value is everyone will be driving a Tesla and they are the market leaders in electric cars and income will increase ten fold. Its all speculative though. An investment consists of yield - what are my earnings - for shares EPS - to simplify further what is my BTL returning...as in what yield. If my asset is not generating an income its not an investment....plus debt is a huge factor not to mention other on-going liabilities.
Knigelk - Do you now decide who should post here? I can tell you if Debenhams has a future. It does. The lenders from what it seems are going to hold and put management in place for the next number of years to ensure they receive a better price for the company and to lessen their loss. This seems to me to be the strategy.
DarrenR it's all fantasy land even now when the shareholders have been wiped out
U just don't get it Pearls, if you did I suppose u wouldn't of had shares in debs. Thank you for continually uploading the same opinion based articles.
On 29 March 2019 the New Money Facilities Agreement was entered into. This provided for an immediate drawdown
by the Company of £101.25m under Facility A of the New Money Facilities Agreement, which refinanced the Bridge
Loan, funded certain fees and provided additional working capital to the Group to address its immediate financing
needs. However, Facility A alone provided insufficient liquidity to enable the Company to trade in the long term,
instead enabling additional time for an agreement to be reached in relation to the Company’s funding needs that
would enable the release of Facility B of the New Money Facilities.
2.11 Facility B of the New Money Facilities Agreement, amounting to £98.75m, was to be made available to Retail.
However, its utilisation was subject to certain conditions. These conditions allowed Retail the ability to utilise Facility
B only in circumstances in which:
(i) SDI announced a firm intention to make an offer for the Group and made arrangements satisfactory to
the Lenders for the financing of the Group’s working capital requirements and the repayment of any
Debenhams plc (In Administration) - Group Historical Profit & Loss
£m FY 2016 FY 2017 FY 2018
Revenue 2,342 2,335 2,277
Cost of Sales (2,040) (2,046) (2,045)
Gross Profit/Loss 302 289 232
Gross Margin 13% 12% 10%
Distribution costs (115) (125) (134)
Administrative Expenses (56) (57) (55)
Exceptional items (12) (36) (525)
Operating Profit/(Loss) 119 71 (482)
Operating Margin 5% 3% -21%
Source: Company Statutory Accounts, the Company's year end is 1 September
7
amounts drawn under Facility A of the New Money Facilities Agreement, the RCF and the Notes, which
would become due and payable as a result of the change of control provisions that would be triggered
by such offer; or
(ii) SDI withdrew its request for an EGM, entered into a stabilisation agreement satisfactory to the Lenders
and agreed to either underwrite a £200m rights issue by the Company or provide a £200m long dated
subordinated debt instrument.
Daniel I got to read some more of this in the afternoon - fascinating as it really details what occurred. The lenders really did ensure they protected their position but would have worked with MA on their terms. They ensured their loss was not going to be greater by working with MA on his terms. I refer specifically to 2.10 & 2.11
Thanks Daniel.........I don't have time to read it all but it really does say it all......'None of SDI’s proposals were considered implementable by the Company in light of the wider liquidity and financing needs
of the Group and contractual obligations in its financing arrangements' ............In plan English the lenders called the shorts fully as they were entitled to do due to contractual terms in the lending, to ensure they protected themselves first and foremost in order to minimise their loss.............Pearls/SS I know you don't really get this but please try...my understanding was that both debs and their lenders engaged the top legal/restructuring advice on matters. They are comfortable in their position. There was no equity in debs in many years even when the company was trading on the market. Buying shares in debs was the same as backing a horse it was not an investment but a speculation!
He should give it to his wife and tell her he is sorry and will never gamble again. I would also like to see P & SS get 1k each so they could do the same thing
I've seen some thick summer ditches in my time.... but nothing like this
Pearls.... wise up
Yes Silver how revealing your answer was. Knigelk - yes true never mind me a BB poster......I hopefully will never have you level of wisdom
So the view (from P&SS) is that something illegal happened here, but no one is quite sure what, but adamant that it was illegal. Is that right? So adamant they are correct in their view that something illegal happened, that they are waiting for someone else (MA) to take the case. Is that correct? ................Are you both married? Do you talk to your wives about the Deb losses and how you hope they will be re-couped or is that sort of reality too far away from you both to even consider, if we cant be honest with ourselves how can we be honest with anyone else!
Thought so
How are all the legal cases going? Has anyone employed a solicitor at this point?
@Knigelk... I made an error in saying that apologies for posting again. Am I the first to make such a bad error of judgement here!