Member Info for Kando

Don't bother James. The chap's not going to stop downing his own Koolaid. Icecool lives in a very different, very angry, dimension.

As you say. There is a real need to raise liquidity, that much has been made inescapably clear by all the company's communications, by the share price, by the takeover offer.

My opinion is that the whole board being sacked and Sidara being told to walk, would just about amount to the worst case scenario possible for shareholders. Icecool thinks that would somehow be additive for shareholders, it won't be. A company ditching its leadership in the middle of debt negotiations with lenders on its survival and turning down recapitalization from a bidder is how a company really does end up in administration. It would amount to the company committing Seppuku.

If the company can't raise the capital it says it needs, it may not be able to renegotiate the debt - the debt then matures in Oct 26 - and the company would at that point be insolvent. It has a net debt position and would have insufficient cash to pay that debt. Icecool thinks posting negative free cash flow every year doesn't burn through your cash, that you can keep servicing your debt with future promises. Lenders don't work like that. They want to see you'll be good for it, not just take it on faith.

Mercifully most other shareholders will not think or vote like Iceool. They have rational self-interest, and not an investment position built on rage and vengeance. His ballots will be voided for emoji use anyway.

I think you may just be following a different company to the rest of us IceCool. What you say never quite aligns with reality. You're both insanely angry at the board's direction yet also insanely panglossian about the company's situation. Those two sentiments are not really compatible. Moreover, none of your CAPITAL LETTER statements match the company's communications.

There very clearly is some form of liquidity crisis, hence the situation and share price. The company RNSed that the capital structure isn't where they'd like it to be, and for the second year running they're selling off assets to cover negative cash flow. They also communicated that the whole company was essentially up for sale and indicated a willingness to listen to any bid. If you had the cash you wouldn't be selling off productive assets or looking for a takeover to recapitalize the business. And then there's the looming maturity of the substantial debt pile... To pretend it's all fine and just market jitters over board personalities is pretty naive stuff.

I'll be voting for Ken, but against Franklin.

In my view, Ken is engineering a turnaround from a mess that Franklin participated in making. Franklin came with Amec Foster Wheeler, the root cause of this mess; the debt, the loss making LSTK projects they had to extricate themselves from, the legacy liabilities. None of that happened under Ken's comparatively short watch, but Franklin came from that company.

Since 2022 I think Gilmartin has really done the utmost to turn the ship around; it's just a big ship that needed a lot of turning. Just because they're running low on finance towards the end of that turnaround doesn't mean a lot of good work wasn't done in stabilizing the underlying business. Without it I doubt anyone would be interested in buying Wood today, and the finances would undoubtedly be far worse.

Instead there's decent and growing EBITDA of close to half a billion, from a negative number when he took over. Liabilities are being paid off and will eventually stop weighing down cash flow, so there is a path to cash generation; orders keep coming and revenue has been stabilized, while costs have been aggressively cut and continue to be cut. I'm not sure what else anyone would want from a CEO. It was a terrible hand he was dealt that's been played as well as one could be expected to play it. I'm more wary of the likes of Franklin who were ostensibly part of dealing that hand.

I think it's fairly telling that the most active posters day after day, hour after hour - on a share that's been suspended for a month and is going to stay suspended for at least another 5 weeks - are those clearly short the stock... sham, dogger, carrot, aimmaster.

They're really sweating this one and it's understandable.

They've bet on Sidara walking away and they're locked in to the trade. A trade which, I would say at this stage, is not looking like a good bet. Sidara have engaged, they've made a proposal to bid, and they've stuck around. They've already seen the accounts - the not yet audited accounts - as part of their due diligence and they've agreed to keep extending the takeover window until Wood meets its preconditions on debt modifications.

The shorters are watching the US market trade it up over 100%. They're terrified of it gapping up when the share leaves suspension. Unlike long positions, a short position's exposure is unlimited. So here they are, day after day, trying to deramp a suspended share that's under offer.

We've all seen this before in suspended stocks, like say, M&C Saatchi back in Oct - Dec 2020. Same toxic spam about administration from a bunch of poor traders who locked themselves into a short position hoping for oblivion on the other side. It's the same as those who just bought in and are hyping a meme stock at ATHs. They buy high and try to scream it higher, then they come to a share that's cratered and try to scream it lower. But they don't win. They're momentum traders that arrive much much too late, when all the move has already happened. They just make a lot of noise about their losing.

"@Kando Agreed £50M over 3 three years would help. However, for some reason it appears that the Pension funds will not be released. Not even £1. It does not make sense, on the face of it at least."

TBF we don't know that yet. The company said the release of funds was deferred pending the conclusion of the Review. The review is now concluded, so there may be scope to announce it soon, possibly once accounts are released and they have a clearer view on HY25 trading.

"It all depends on Wood's lenders appetite towards Wood and it's minimum liquidity requirements. This is what will determine the minimum cash injection needed. At the moment it appears that £250M will keep Wood's lenders satisfied. This can be achieved via Pension surplus and seet disposals. Maybe Wood will announce something of this sort in due course to head off the easy route of a sale to Sidara for a pittance."

Yeah, but from the Pension Funds POV it matters not what WG "needs", but what serves its members best. They're really under no obligation to release anything back to the company at all, so holders ought to be grateful if they choose to release the originally posited $50m for 3 years. I think it's more or less a non starter that they'd release much more than that, especially 100s of millions in one go. It'd be irresponsible to do so. They can release $150m, spread over 3 years and still maintain their coverage ratio and not expose the fund to unfavourable market movements that can quickly turn any remaining surplus into a deficit.

It would seem that way, or at least confused the conclusion of the review with the completion of accounts.

"Damn the Bod stinks of bs. The audit found no reason yo adjust the "exceptional" items with the 24 accounts. However review of the 24 accounts is still ongoing and wood won't be ready to clarify those accounts by 30thJune 25. Wood are literally desperate now to withhold those FY24 risks."

Rick, I believe the you'd need to finish restating the prior two years of accounts to be able to release the FY24, since many of the balance sheet numbers will need to change from FY22/23. How can you release FY24 accounts without knowing the balance sheet adjustments from prior years? It's not the conspiracy you think it is.

"Wood ought to be able to access those funds with a dash of creativity.

For example, an 'inter-company type loan' from the WG Pension Fund to Wood for £300M on favourable commercial terms would do the trick."

I'd just be happy with the original proposal of $50m released back each year for 3 years. That fills in a big chunk of the negative cash flow. I think expecting anything more than that would breach the fund's coverage ratio and so the trustees would never approve it. But both the fund and the company last year seemed to think $50m for 3 years was an acceptable refund.

"The penny pinching is visible in the office, big efforts to save cash at the moment, deferring paying supplier invoices and trying to collect cash early. (Which BP were very nice about reducing their payment terms) I might even come close to saying there is currently “inappropriate top down pressure” to defer supplier payments atm. Anyway, here’s hoping the debt waivers get extended and any penalties aren’t too harsh."

Yeah, I think that's to be expected. If there was ever a time to doll up the accounts it was now. Call in cash early, kick paying it out down the road. It's all dollars to the pump time. Both to win the lenders over in renegotiating the debt and to entice more bidders.

"Anyway, does anyone have a spare 260million to lend us in exchange for no equity to get us through this year? Ideally someone who is a bit like us and can’t do due diligence."

Enter the WG Pension Fund's $393m Surplus...

If only it were that easy.

Sorry Pete, but that's just not the reality. They don't have the backing of the banks, that's why they can't borrow anymore to bridge this near term capitalization shortfall. Whatever the promise of the future, the reality at the moment is that they're looking for helicopter cash from somewhere, and Sidara are offering it and no one else, yet, is.

I've cited it before, but Carillion were trumpeting a 16bn order book a month before they ran out of cash and failed. Don't confuse order book with cash flow. Cash flow is still forecasted to be negative this year. There's underlying profitability, but care of legacy liabilities, they're still losing money every year, and they've signalled that they're running low on cash. That's the reality. And it's not a conspiracy or a smokescreen. The board have been up front about this since at least last November.

Cmon Ice, give it a rest old sport.

They're holding the AGM because they're legally required to hold an AGM by June 30th. They're not publishing accounts because they have to restate and audit 3 years of accounts in the time since they received the draft review. Not everything is a conspiracy. Audits take a long time in normal years, and this is an exceptionally large audit.

"Wood is continuing to work with its auditor to deliver the FY24 accounts at the earliest opportunity and will update on the timing in due course but the FY24 accounts will not be ready to lay before shareholders before 30 June 2025."

It says it won't be open for trading shortly. Not before 30th June at least.

I'm sorry, I didn't mean to be an ass not knowing about your struggles. It was just a tough read parsing it out as one long sentence.

It's indicative, but it's not going to be a direct read across. Historically, it's always traded pretty much in lockstep with the main listing, but the main listing, as far as I know, has never been suspended before. So it's currently moving on very light volume adrift of cues from the main listing, but gives you some idea of where the market is pricing it over there.

You believe in Wood but don't believe in punctuation.

You can be optimistic, but 3000% seems... optimistic.

Correct me if I'm wrong, but Petrofac have been posting negative EBITDA every year, year on year, that gets worse every year; -$324m at last accounts. So not only did they run out of cash, but the company had no underlying profitability to support a turnaround even if they hadn't.

WG keep posting positive EBITDA that's growing. $450-460m. That's fairly decent, on ~$6bn revenue. They're running low on cash, hence the current crisis, but healthy cash flow generation is at least visibly achievable again, and it's why it makes Wood an attractive takeover target. Clear the debts and pay off the AFW's lingering liabilities and it's already a cash flow machine, ready made.

PFC didn't and still doesn't make for a very attractive target. It hasn't shown any signs of profitability, and if anything, the rapid contraction of top line revenue year on year suggest it's extremely unlikely. It can't seem to right size fast enough to outpace falling sales. So anyone looking to buy it would have to fix the core business itself. Turnarounds are not guaranteed and generally take time even if it were possible, so it wouldn't generate cash for the new owners any time soon.

So they might be two businesses in the same sector with both having fallen on hard times, but that's where the similarities end, the extent and nature of the hard times are not the same. There's some marked differences between the two that justify a valuation difference and more optimistic prognosis at WG, not least of all that there's already at least one interested party proposing to buy it.

Https://www.marketwatch.com/investing/stock/wdgjf

Trading at 54.84 cents, ~40p GBP. Perhaps rumours of another bidder, since it's now nominally trading above the Sidara proposed offer price.

You must have read the wrong RNS amigo. That's not what was written.