The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
Why are people so afraid of differing views? People should welcome differing views. It gives balance and allows people to invest. It is always better to know why people are motivated from both sides of the trade. (every buy trade is matched with a sell) - you should always try to figure out why someone is selling you the share you are after buying. It might not change your mind, but gives you another perspective.
Where-is-my
But the Company says it needs an additional £750m of cash to run the business going forward. So you need to pay 1.6bn plus 750m to buy this business that is not making much profit this year (or last).
illbetabuck,
He could have bought the bonds and would have guaranteed a seat (repack will cut the shareholders loose). I accept it is only 5m, but for 5m he could have had €20m face of the bonds.
I think it is madness and I am obviously missing something.
Still think it is heading for pre-pack
Pione3r,
I am dumbfounded by the recent disclosure about his purchase and I have been trying to figure why he has bought.
I think it is unlikely he makes a bid for the Company - Changing the equity owners does not change the situation the Company is in. The change in share ownership does not change the need to invest additional cash (company reckons £750m) and write down of the current debt situation. The write down of the debt will have to dilute the existing shareholders. The alternative is he pays back the bondholders and RCF banks at par. (DOn't think this is possible, but if you do, buy the bonds!)
But I will admit, I can't understand his motivation.
Not really - I've been consistent with my views on TCG. I expect a pre-pack admin as they will need to cram down on holdouts in both the bonds and the equity.
The Company is in negative equity and recent trading in peers doesn't point to performance improving.
Fosun are restricted so they won't be buying anything until they are cleansed by a RNS
illbetabuck,
I don't think he will bid - I guess he has paid to get to the table - am not sure it is worth the entrance fee though!
@illbetabuck,
We both think he is crazy to spend £5m on shares now - and I can't even see any logic in it. But he has. So we need to think of his motives. Is he trying to block a deal? Is he looking to provide some of the new money - I still think he could have rang the Company and stated that - did he need to be on the shareholder register >?
I can't make sense of it at all - Think he has put £5m down the drain
He also has a hotel business - is he a supplier to the TCG group?
Who is NESET KOCKAR? New 6.7% shareholder - spend £5m for his 100m shares?
Disappointed to see shares down this morning on the back of the results -
NPL line continues to decline. I suppose the stock is tied to Irish and UK economy through BREXIT for analysts to focus on fundamentals
Paul,
Please show some respect - I have tried to show it to you.
Finance leases are attached to the aircraft so will reduce the value of airline segment.
And you think fosun is going to put 250m in for a 5% stake in the airline. I think you should re-examine that assumption.
Paul,
I refer to your post at 10:45
Firstly, you have only accounted for £1.35bn of debt - there is over a £1bn of bonds, £650m of RCF and £280m of Finances related to aircraft. This is gross debt but at December last year there was only 150-200m of headroom. This year FCF is going to be worse that previous year, so more cash outflow.
You have Fosun investing 250m equity in the airlines for 5% of the equity - What does that percentage make the airline worth?
But you have outlined a potential plan. The only thing I would say you need to focus on is Gross Debt outstanding as of December, and it is unlikely Fosun will put in all of the £750m.
Any debt for equity that doesn't involve courts will involve 75%+ of the bondholders and 75%+ of the equity. Given the lack of major institutional shareholders, apart from Fosun, I think it can be blocked. Therefore it is likely to go into a pre-pack administration. I don't see how a deal can be done consensual
I am not expecting any update from the Company until they are close to end of discussions with financial creditors. Given the bondholders have only formed a group the night before the announcement last week, it is unlikely any progress will be made by end of month.
I understand your frustration but if no agreement has been made, the only update management can provide is there is no update (or worse, progress is slow - both of which will create more negative headlines)
Paul,
They don't own 250 hotels. This has been discussed several times on this chat and I've displayed the information from the annual report.
Please stop pushing inaccurate information
Paul,
What are the legal implications of a large debt for equity swap. The company is likely insolvent so needs to remove debt. As debt ranks higher than equity they should get 100% of the equity.
You imply a lot of improper acts but I have repeatedly asked what would you do if a) the bids were too low.
So imagine the bid was £700m for the airline. Sell the airline, get 700m of cash. Pay back the finance leases and other aircraft related borrowings. You have £450m left.
Now you have an RCF of £650 and £1bn of bonds outstanding with cash balance of £450m
What you do next? At this stage the terms of the debt require you after selling a major asset of repaying debt.
So you have a £200m revolver and a £1bn of debt with only a tour operator (to) to service the debt? TO makes £161m EBIT last year and this year is going to be worse. But using last year figures at £161m it can't service £1.2bn of debt. What do you think a business that makes 160m is worth?
Good luck with your court cases, I don't believe they will succeed.
I think shareholders should sell and wait for further announcement from company on progress of a plan.
Good luck all.
Kingsteve
I believe information was held back too. But for legit and genuine reasons.
You can believe in conspiracies or you can try learn from it. But again I ask you what would the market reaction be if they came out and said the indicative bids are too low and we now need to speak to creditors about a rescue plan.
What do you think the CAA and ATOL would do in those scenarios.
Kingsteve,
What do you think they have done wrong. There was non biding bids on the table (in my opinion) and with the profit warning from Lufthansa some of those bids disappeared. The Management tried to get an alternative to maximise recovery for its stakeholders and entered discussions with its creditors and a potential new money source in Fosun. They couldn't say the bids had disappeared until they had a rough agreement with creditors otherwise they would have had to cease trading (which is still a risk).
Rest assured they have all had significant legal advice and they have not done anything illegal.
But please in paragraphs tell me what you think they have done wrong. How would you wish they have done it. (and try imagine the outcomes if they had done the alternatives)
prepack admin deal can be done over a weekend - no longer as messy as it used to be. Shareholders block isn't an issue.