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Well, as portrayed, including by today's Sky article, the implication is that the lenders are probably forcing everyone's hand. That short term, the cash and debt situation is bleak/irredeemable and they want a resolution that guarantees the security of their loans.

The company are doing all they can to paint the best possible picture for the long term, to increase the ultimate value of a sale, but the situation still sounds like they've run out of road and run low on capital before managing to generate positive cash flow.

So it could absolutely still be a distressed sale where the seller (Wood) doesn't really have much of a choice. If the lenders are threatening to call in the debts for historical covenant breaches, and/or refusing to allow more borrowing/continued drawdown of the RCF, then they could simply have no more cash to run the business for x months until whenever they turn cash flow positive.

The business could have value, lots of value, but still be in a position of being forced to sell to the only bidder offering short term funding - currently SIdara. That's how it looks to me at least.

Interested to see how the US instruments trade today.

Agree, 35p at least now looks more solidly like the base case. The article I'm sure would have mentioned any talk of a lower bid.

Keeping fingers crossed for other bidders. It would really still interest me if I worked at Apollo... but I don't work at Apollo, nor do I have the connections they do to know what I might be missing here. But, growing EBITDA towards $500m, a credible rolling off of exceptionals towards positive cash flow over the coming years. £242m still doesn't seem like a lot. Buy it, pay off the debts, lose the debt servicing costs and it's more or less immediately cash flow positive. So for 242 + the debt, the acquisition could pay for itself in 4-5 years, if the company can get back closer to 250m FCF which seems achievable.

I actually don't know what to make of today's leaks and releases.

I didn't anticipate a bid to be formalized before the accounts were released (thus, not before June 30th as they've stated), in order to secure the debt modifications from the lenders. But presumably they're trying to suggest they have those modification done already, and the accounts, while unsigned by the auditor, are satisfactory to both lenders and Sidara to proceed with the offer.

Whether this is true or not, who here knows.

It could be all true and the bid is soon to be forthcoming and the sale is essentially a fait accomplis, as presented in the Sky article. Good news for anyone impatient with the suspension and a low average.

Or, it's a leak designed to create a sense of urgency in any other bidders to wade in and save them from the Sidara low offer. Throw some big contract wins out with it the same day and suddenly you get a bit of attention and buzz... Flashy billion $ contract numbers next to articles saying "hurry, it's about to sell for £242m in 20 days" is probably something I'd do if I was trying to bait out any more interested parties and start a bidding war, if there's ever to be one.

Hah that's alright, I'm a big fan of Kandinsky.

Offshore installation manager, I believe.

I think it's still a stretch to blame a CEO appointed Jul 22, for a mess set in motion many years before, and covered up by divisional leadership mostly appointed by his predecessors.

The Amec Foster Wheeler purchase was not Ken's idea in 2017. The saddling of the company with significant debt was not his idea. The use of Lump Sum Turnkey Projects which became huge liabilities during a bout of high inflation were not his idea.

I get the sentiment that people want the buck to stop somewhere, but the people who bore most of the blame are now gone. At a certain point you'll be sacking the clean up crew for another clean up crew because the first clean up crew got their hands too dirty trying to clean it up. Where does it end, and when do you allow the dust to settle and stability to be maintained?

No, this is not possible. You can't selectively pay off some shareholders and not others. We all hold the same rights and share certificates, whether individuals or institutions. If they get paid, we get paid.

GRaff, very modest of you.

"Rumour is that KKR is looking at bidding for Wood."

"Rumours are that Berkshire H is interested in Wood."

And you say you know these two things, right? I asked you before, but why not ask you again. What's your source on that?

It must have been just one big coincidence that KKR leaked its machinations to you, and you alone, the very day they were plastered all over the press having pulled out of the Thames Water package...

If John D. Rockefeller was reanimated from cryostasis tomorrow, wowing the press and scientific community, should we not also expect to hear a rumour from you that he was interested in bidding for Wood Group as well?

I suspect they already have, they did publicly put themselves up for sale after-all.

If there are other interested parties, which I imagine is more like a probability than a possibility at the current price, then they will be waiting to see the cleaned up accounts, the dust settle, how the debt negotiations are going, and ultimately the opening bid by Sidara, if it comes, to weigh up whether they can or want to compete with it. I'd find it difficult to imagine Apollo aren't at least paying attention and keeping an eye on how things pan out, given their still relatively recent interest and ambition to acquire, and it now being at a much much much lower (fire sale by comparison) price.

But GRaff, you posting "rumour is KKR/Berkshire Hathaway/[insert names of PE you've just heard of or are in the news] are preparing a bid" every few days is not useful. It's spam and reeks of desperation.

"The findings of the Deloitte review have already been published. Nothing catastrophic was uncovered, no fraud, no black hole and no collapse in cash flow."

Ah brilliant, can you let us know where the Deloitte review has been publsihed to?

How much were the prior year restatements?

Poor ol' dogger shorted the lows into a bid proposal 100% higher. It's no surprise he's sweating this, posting fruitlessly day in day out, weekends and bank hols on a suspended share, desperately trying to keep his spirits up.

Source? Or just plucking a private equity name out of the air because KKR are in the news today after walking away from Thames?

It's hard to say if David Kemp had any culpability as CFO, when it was apparently the Projects division withholding information. Should he have known? Perhaps. Did he retire early because he found out? Maybe.

Agree with you Medjed. While we don't yet know the whole picture, my sense is that 35p would undervalue the company. But as it stands it would seem they could get away with that price.

If it is an undervaluation though, then I would expect someone else to bid against Sidara once the accounts are released and Sidara formalize their opening bid. Ultimately the market will decide the value. There's definitely a good company in there, notwithstanding its current strife.

If someone counters with 50 would Sidara go to 70?? It's conceivable. After-all, 70p is still an agreeable discount to what they were almost willing to pay 12 months ago. Who knows.

Med, I've never said FCF isn't possible next year, but the market has been told by Wood that they would be FCF positive THIS year, 2025, and now they're not, by a lot...again. So how much credibility do you think Wood will have in promising more jam tomorrow? I think they can, you clearly think they can, but the market won't necessarily give them the benefit of the doubt and the share price won't necessarily be where we want it to be on the back of it.

The sort of repricing you imagine will very probably take until Wood ACTUALLY start posting significant FCF. Conceivably, next year may only be nominally positive, and it might take until 2027-28 until it starts generating the sort of meaningful cash that the market values. Only then might you get back to a more fair valuation towards a billion. But you have to get there first. And then it'll take more years still to get to £1.75bn... just to break even on the current offer.

All I'm saying, in your Rights Issue scenario, waiting for the mcap to reach £1.75bn to break even on the current 35p offer price is not sound reasoning. By far the current offer represents the best value against a rights issue or debt for equity, as the company have said. It's nearly 100% upside on the last traded price. I understand the sentiment that we all would want Wood to recover on its own and we get to hold onto our shares while it does it, but the company have told us that this option is worse for us.

If you want to hold for a number years in the hope of breaking even in say 2027-28 and making any meaningful advance on that by who knows, 2030(?), so be it, but most shareholders will assess that 35p today - or an improved bid from another party - by far makes better financial sense than diluting your current equity by ~88% and waiting for a turnaround to complete, that isn't by any means a guarantee.

It's Kando.

No Daz, they did not. So far they have only sold Kelchner Inc this year for $30m. And they have a negative 150-200m FCF hole to fill. So they are some way away from just plugging this years outflows.

Ethos Energy was sold last year for 138m to cover last year's cash outflow, that's not included in the further 200m in sales they now say they want to make this year.

30m does not change the math much on a rights issue being HIGHLY dilutive to shareholders. It would still take many years for current holders to break even post dilution.

So let's look at your assumptions Medjed.

"- 3b new share total This level of dilution would raise £233m so perhaps is realistic."

The currently proposed recapitalization collectively agreed between Wood, Sidara and Lenders that is required is $450m (£335m), per the offer to get the debt modifications over the line. So more than 233m. So for one, the dilution WOULD be worse than 3bn additional shares, thus as you say, shareholders would be worse off.

To be more accurate then, let's increase your 3bn shares to closer to 4.5bn additional shares total to raise £335m, from 690m today, so ~5.2bn total. Leaving current holders with 12% of the equity they hold today. 12% sounds a lot like effectively wiped out.

If the company were again suddenly worth £1bn as you say, after raising £335m (another significant assumption based on the completion of the turnaround and positive cash flow promised actually materializing -- raising more money just to keep burning through it at the rate it has been would just be kicking the can down the road), then current holders would own 12% of that, ~£120m.

The current share price puts the market cap at £126m. 35p offer price values it at £242m.

To get to 35p post your dilutive raise of £335m at 10p per share, like you suggest, you'd need the market cap to be around £1.75bn.

So shareholders would break even post-dilution at around £1.75bn market cap....from a mcap today of £127m... Sure that 15x MIGHT happen, eventually, in 5-10 years, but it certainly wouldn't be a good for any current shareholders, waiting years and years just to break even.

So I stand by what was said.

“Other less favourable forms of recapitalization include a rights issue (would all but wipe out shareholders from this level)”

It would effectively wipe out current shareholders, and they'd have to be waiting on a miracle, for likely many years, just to break even.

So against the math of a rights issue or a debt for equity swap that would likely be even worse than that, it's not hard to agree that the current proposal to sell the business is, as the company and its advisors have now repeatedly stated, the best value for shareholders. I hope the company ultimately survives and the price it sells for is ultimately higher than 35p, but pretending a rights issue is a better outcome for holders is not a reality.

Sorry Daz, but on this you're just plain wrong. If that's not the worst case scenario, what is?

It seems you see the world how you want to see it, but not how it actually is.

Order book =/= cash flow.

2026 is next year. It's not the distant future.

The company have stated now many times that they are exploring ALL OPTIONS for recapitalization. They won't spell it out to you, but a rights issue is always going to be one of those options. Debt for equity is another. Selling all or parts of the business is another. There's a strong implication that taking out further debt is not an option available to them. They've told you a sale is the least worst option.

If you want to pretend everything the company has said and done in the last 7 months hasn't happened, then that's on you, but you can't morph reality around your dreams of a magic money tree being found to fix all the company's ills. They have said the sale represents the least worst way of recapitalizing the company for stakeholders, and sorry, but I'd wager that you don't know better than the board and its independent financial advisors. You imply they can go it alone when the company has said their best option is not to go it alone.

So if going it alone is not the best option. As shareholders we should be hoping that there might be more value here than 35p per share, that other people see value in what can continue to be a successful business post-recapitalization, that's how the company maximises shareholder value from here, by sprucing things up enough to become enticing to other bidders. Sacking the board and snubbing a buyer is not how you entice bidders, it's how you'd wipe out any remaining value here.

It's a fair question though Ice. If you were invested, why would you be agitating for the one path that destroys the most shareholder value?

If the whole board are unceremoniously booted and Sidara told to walk, that's unequivocally one of the worst case scenarios for shareholders. All shareholders should be hoping that does not happen.

It'd leave a headless and rudderless company that needs to urgently renegotiate the looming maturity of a large debt pile, while still (at least) a year short of generating any positive cash flow; that's already indicated its capital structure is insufficient and needs to quite imminently recapitalize; that's exploring all avenues to recapitalize and stating at the moment Sidara's offer represents the best value against all other options; and with its lenders very clearly reluctant to extend the existing debt or make any further lending available without that recapitalization.

Other less favourable forms of recapitalization include a rights issue (would all but wipe out shareholders from this level) and debt for equity swap (would wipe out shareholders). And if you don't think those things are possibilities, you haven't been listening to the company nor do you seem to grasp the state of the finances.

So you start to sound like dogger every post, he's just as obsessed with seeing the company end up in administration. You can't pretend to be upset if someone asks if you're actually invested.

"Do you really believe that this could happen ?"

Yes Daz. That could happen. Good for you that you "think not".

And selling off assets year after year to cover negative cash flow isn't wonderful news. It can mean your revenues can start to fall as fast as your costs. How many "non core assets" can they keep selling until they're just selling off the business piecemeal?

And if you think other refinancing options "will not be a problem", what's the current crisis about then?

And to Icecool's "According to their own guidance, Wood is still on track for double-digit growth and positive cash flow in 2026, that hasn’t changed."

What about their guidance for 2025 positive cash flow?

At HY24 they said: "We are pleased to reconfirm our outlook today, both for 2024 and 2025, including generating significant free cash flow in 2025.”

Yet you expect the lenders to simply take their word for it that this time they REALLY mean it about 2026... And you're there spitting feathers about the BoD every post but you're willing to believe every forecast they give and word they say - except when they tell you they need to recapitalize the business and that the proposed offer currently represents the best outcome. You don't believe them in the important parts, but swear by the bits liable to change and partly out of their control.

We all hope FCF does materialize ASAP, but you're saying lenders don't care that it hasn't, and they do. They really do. Hence the situation.