Member Info for Kando

"Sidara is waiting as it looks like This company can get out of this mess."

Wow, even sham has turned bullish on a turnaround.

"According to JO, sidaras offer is given. Not sure why everyone's worried here. 🤔 imho"

Well, isn't it? Even after Friday's FCA investigation announcement, the FT said this:

"One person close to Sidara said the latest development posed “a great deal of complexity that needs to be worked through.”"

"Needs to be worked through" does not suggest they're thinking of walking away as a consequence, just that it adds more flavour to the negotiations.

Nothing is a given, but it still sounds far more likely than not that after 4+ months of negotiations with Wood and lenders, and a fleshed out proposal for an offer and financing, they still intend to make a bid.

And just to be clear, WG is not Poundland or Chelsea FC. Wood Group actually can be profitable. It has nearly half a billion EBITDA (and growing at double digit %). Once you get rid of all the legacy claims and non-recurring exceptionals, there's signficant cash flow generation underneath it all. They just ran out of runway on route to getting there. It's a cash and debt crisis, but it's not a fundamentally unprofitable business.

". Once again, realistic logic, what benefit would another party have in waiting to make a last minute surprise blind offer? It would make sense for them to come in now with interest in the same way Sidara did and get access to all of the information Sidara has had access to, to determine if in fact they would want to offer more."

Disagree on that.

A) Why would you start a bidding war before you know the first offer? From the perspective of another bidder, you'd let Sidara start the bidding as low as they think they can get away with.

B) Why would you interrupt Sidara getting the debt modifications, extensions through for Wood, and injecting a first tranch of liquidity - all of which remain in place regardless if someone else then bids. Sidara are cleaning up all the problems before they buy the company. Those problems would then also be cleaned up for any other subsequent bidder to gazump them later on. There would seem to be few benefits and only negatives to jumping the gun over Sidara. You'd end up with a higher final bid, and you'd have to resolve the company's problems with lenders yourself if you scared off Sidara's interest.

Fair post carrot, mostly agree.

It's still feels now or never in terms of opportunity for Sidara. The optics and mood around the stock are pretty much as low as they could ever be after they:

Admitted to misreporting accounts;

Failed to report current accounts;

Got suspended from trading;

Under FCA investigation;

Breached debt covenants;

Need urgently to renegotiate that same debt which is soon maturing;

Cash flow negative still when previously forecasted to be positive and now need to recapitalize the business/ostensibly are running low on capital/had their ability to draw from the RCF restricted.

If they wait any longer another form of recapitalization will eventually be forced, whether that'll be a RI or D4E, which will put the pain on shareholders, but that will put right the balance sheet and make a takeover unnecessary/far more expensive. So for Sidara, I can still see a need to act sooner rather than later, and that might be sooner than the auditors allow re: the restated accounts.

The proposed per share bid price is already fire-sale cheap, and to think they'd risk upending the negotiations to nickle and dime it lower seems greedy and not without risk. To them, 242m should still be a steal - trying to get that down further just invites other bidders the closer you get to zero on the offer. I'm not completely without hope that it might yet be formalized this week. Lenders clearly don't want to keep extending the waivers indefinitely, and the company finances might start forcing hands on arranging alternative recapitalization plans. There's been a window for Sidara, and that window isn't endless.

Fingers crossed we'll see the bid from Sidara soon, and then, if we're even more fortunate, another competing bidder to realize more value from the final sale price. Ultimately it's in no party's interest for this sale to fall through, Sidara and shareholders alike will want the company to avoid a RI or D4E. That would obviate the need for Sidara's rescue and diulte shareholders to wipeout territory.

"Several CFOs, the CEO and most certainly the Chairman could be under the microscope and shivering.

At a bid level of 35p the losses are HUGE. If the level were upped the losses would be less."

Would you mind explaining what you mean by this? Why would the bid price being higher lower losses from class action/FCA sanctions?

I thought we'd agreed to stop lying to each other Robert.

:(

"Do u know what a profit warning is? U dont do you.."

One of these right?

https://www.lse.co.uk/rns/WG./fy24-trading-update-s4qvg3ojrf7yu99.html

https://www.scottishfinancialnews.com/articles/wood-group-accelerates-asset-sales-after-profit-warning

Shall we ask Icecool's AI friend for you as well?

"AI Overview

John Wood Group issued a profit warning on February 14, 2025, primarily due to weaker-than-expected fourth-quarter performance and a forecast of negative free cash flow for 2025, which led to a significant drop in its share price. The company also anticipated prior-year adjustments from an ongoing independent review by Deloitte.

Key points of the profit warning:

Negative Free Cash Flow:

Wood Group projected negative free cash flow of between -$150 million and -$200 million for 2025, a significant reversal from its previous forecast of "significant" positive free cash flow.

Weaker-than-Expected Performance:

The company cited weaker trading in its fourth quarter and adjusted EBITDA expectations for the full year. "

Okay Robert, I'll stop lying.

February 14th RNS included a profit warning.

"Rock8, how is the following statement NOT relevent? Kindly explain for laymen like myself..."

Not Rock, but I agree. I think it's fairly irrelevant at this point. Share is already suspended, it'll likely stay suspended a while yet, indices can't sell a suspended stock either, and by the sounds of it (Sky article) the company were eager and (at least recently) confident in securing a sale asap, presumably before the audit completes and it leaves suspension.

It only becomes relevant if there are no bids to purchase Wood. Then it would matter down the road after whatever other form of recapitalization happens.

Hah! You're too funny Robert.

Keep up the good humour and you'll be alright.

Https://www.scottishfinancialnews.com/articles/wood-group-accelerates-asset-sales-after-profit-warning

*Sorry, full stop broke the posted link.

"Do u know what a profit warning RNS looks like?"

Do you?

Downgrading FCF guidance from positive in 2025 to negative 150-200m is called a profit warning.

https://www.scottishfinancialnews.com/articles/wood-group-accelerates-asset-sales-after-profit-warning.

When a company announces it's financial performance is going to miss expectiations, that's a profit warning.

February 14th RNS was a profit warning. Previous guidance is going to be missed. There seems to be some significant Icecool-shaped confusion about this on this bb.

"no profit warnings have been given"

...other than the massive profit warning on February 14th, or are we not counting that one because it's not a leap year?

"wood are not in financial distress"

This statement would be comical if it weren't such a sad state of affairs.

Icecool wouldn't be as deluded as he is if he had the self-awareness to admit when he was wrong.

Earlier he tried taking credit for getting the FCA to investigate. No joke.

When it rains it pours.

But... it's always darkest before the dawn, or so they say.

Fingers crossed Monday is better.

35p has always made some sense Rock. It is what Sidara thought they could get away with, no more than that, given Wood had/has left itself with so few other options. Wood put out an SOS call for a rescue and they can't turn down the only boat that came to their aid.

The FCA investigation is frustrating because it probably incrementally makes another bidder less enthusiastic about competing with Sidara for Wood. It's hard to imagine that the ultimate price it goes for would be as high as it would be without a 3-4 year FCA investigation hanging over it.

Yeah it's really difficult to quantify the scale of Wood's gain from withholding information from auditors. FCA fines are usually a percentage of the gain from the infraction, with the percentage (between 0 and 40% usually) depending on severity and intent.

Wood clearly gained by hiding that they breached covenants on debt to EBITDA ratios, thus benefited by not paying penalties and higher interest to lenders.

Given the scale of Wood's debt, and likely penalties and increased interest rates, I'd say worst case scenario they benefitted to the tune of 10s of millions up to 100m in the subsequent years. Which would put a fine at maybe 10-40 million, if that is the only way they are found to have materially gained from the infraction. So it's not nothing but not enough to make it completely unsellable. It's just another unfortunate demerit in the value column, when we all want Wood to be maximising it's value to get the best outcome from all this, whatever the path.

"We rattled the board enough"

Sure you did, with those 87% yes votes.

"we lit the fire under this mess"

If you're genuinely trying to take credit for inciting an FCA investigation into a share you're invested in and long on, you're confused about how investing works.