Member Info for Jinny122

Dont forget, the bond holders are still yet to have their say. They will be organising themselves as we write

Looks like lenders / bondholders have called an event of default

Adzy2k, see link below. Basically sneeze the wrong way and lenders can seek immediate repayment. And when one does, all the rest rush for the exit to ensure they're not left with nothing.

Any single one of MW accusations are enough for lenders to deman immediate repayment here if they are desperate to escape.

https://www.investopedia.com/terms/e/event-of-default.asp

Adzy2k, best believe that the terms and conditions of all that debt are designed to save the lenders / bondholders in this exact scenario. With zero cash, higher than reported debt, downgrade to profits etc, will they even have met their banking covenants at year end? Once an acquirer emerges, lenders/bondholders will seek immediate escape

If we assume gross debt of $2.5bn immediately repayable by refinancing, immediate cash requirement of $0.5bn, downgraded profits, zero cash, unknown civil lawsuit and FCA liabilities, unknown dependencies on related party transactions, accusations of inflated property asset values on balance sheet etc.. given the current mkt cap of $2.5bn equivalent, its hard to see where the equity value comes from

Pion3r, Mubadala comes in as a safety net if the business fails. Patients will still get looked after, but equity will have to fend for themselves.

Just connecting the dots from information we have. Freeh himself questioned cash, MW questioned cash, the business is now trying on raising cash by pledging future credit card payments, staff not getting paid (it could be more widespread, who knows), undeclared debt off-balance sheet, FT's report of a further unsuccesful attemp to raise hundreds of millions in cash off-balance sheet, abandoned $200m share buyback etc... just working with the info thats available

If this cash issue doesnt get resolved today or gets worse, the directors are duty bound to declare insolvency on monday morning if they judge the business can no longer meet its liabilities as they come due. This weekend is critical, hence Mubadala's involvement

If Mubadala bid for this without Freeh or audited accounts, then its a 100% emergency rescue operation for the publuc good, meaning the business is likely insolvent

Those bond holders will not be happy continuing to lend to this at circa 3%, the risks have exploded. More like 8%-10% unless they get taken over by a stronger company. The banks too will be done at this point, will want their money back as risks too have exploded in absence of a takeover

This looks a very serious situation. Take a step back and recall this was a business recently pledged $200m in share buyback- and hasnt yet spent a penny of that. Now we hear staff going unpaid, last resort sale of credit card receivables, doubts about its actual cash etc.. Not looking good for the true level of profitability here when it gets discovered, its clear they are struggling to generate enough cash to meet their outgoings

Cash and debt and profitability are the pressing issues here and there is doubt over the true values of each. Cash seems the most pressing, and is the most dangerous one to be amiss in the immediate term

Ypu have to separate the debt from the equity. I believe the debt alone is worth more than £10/share, and thats the one we know about. Then factor in ongoing cash requirement and finally equity. If any lender or creditor suffers any pain, then equity will get nothing as they wont write off debt to bail out equity

Its Banks are unlikely to release any more money to the company under current rumours and accusations. This weekend looks the crunch point, in context of early Freeh suspicions, ceo and cfo sackings, cash cris rumours, fca investigation, undeclared debt liabilities - all revealed in just 2 days!!. If it emerges still trading on monday then risks look better

If no news this weekend on insolvency then its good news Imo. Companies in this position who are struggling to pay wages, try to limp into weekend to get breathing space and see what they can do. But the rumours of cash crisis can become self fulfilling if suppliers, lenders and other creditors panic and freeze up credit. So fingers crossed for holders, see what the news is by monday

You were warned many times but didnt listen..

Lenders & bondholders tend to call in debts to ensure they get paid first and everyone else gets whats left after business sold / broken up etc. Equity holders = absolute bottom of the pile in priority hierachy

If Freeh is as bad as feared, debt and bond holders may call in all loans and if the company cant pay then it becomes insolvent.. Keep a close eye on this situation

That bid is gone. The deadline to announce bid is 9th, they wont do that under the current circumstances without Freeh and full year results. Once it goes, price support goes

Why will anyone buy the shares now? You dont know how much debt it has, dont know if it has enough cash, dont know if profits are reliable, dont know if it'll be suspended, dont know if lenders will call in their debts, dont know how their business partners will react, dont know if lawsuits will be filed, etc etc