Told everyone it was oversold last week and it was a good opportunity for short term trade. I was called a muppet. This market will stay open for good few weeks. I still believe it will bounce back to 5p+.
I have put an order at 4.7p about 2 hours ago but no one is willing to sell. Please sell yours if you want to be out.
jj.. - I'm very interested in your factual views. What do you think the most likely outcome would be based on what we know so far? More specifically for the shareholders?
Apparently core lenders are happy with Fosun's offer. Debt maybe written into shares and shares will be significantly diluted to whatever value.
I'm also confused about the dilution. Sky states shareholder wipeout, then goes on to quote significant dilution (by a billion pounds). Then suggests both part of the businesses would not be listed in market. Numis confirms dilution. Citi calculates 3p dilution but potential risk of offer being rejected by bondholders. Sky on the other hand believes the deal is almost finalised.
I don't get it, if the deal is agreed and D4E goes ahead, will shareholders be diluted or wiped out?
To all the holders, theoretically the implication of D4E:
When more stock is issued, this dilutes current shareholders. This typically has a dampening effect on share price because what the company earns is now spread out among more shareholders.
While in theory a company could issue stock to avoid debt payments, if the company is in financial trouble, the move would likely hurt the share price even more. Not only does the swap dilute shareholders, but it shows how cash-strapped the company is. On the flip side, with less debt and now more cash on hand the company may be in a better position.
Issuing more debt means larger interest expenses. Since debt can be relatively cheap, this may be a viable option instead of diluting shareholders. A certain amount of debt is good, as it acts as internal leverage for shareholders. Too much debt is a problem though, as escalating interest payments could hurt the company if revenues starts to slip.
Going into administration will nullify their ATOL. The business will be worthless to creditors. Whilst I despise PF, he has been clever and played both the shareholders and bond holders by not selling the airlines. Fosun has to inject cash to save their investment; bondholders have to accept D4E in form of diluted shares.
I am not wasting my focus on administration. I am worried about the value to shareholders after D4E, since shareholders will get left over. BUT NOT 0p as you keep guys keep going on about.
Agree. Total over reaction on Friday. TCG not going into administration, not losing ATOL.
No one knows what the SP would be after significant dilution; wouldn't be 10p+ but certainly not 1p. If it goes private, there will be an offer to all shareholders. We are all guessing.
Thanks Shipright. PIs need to move away from the idea of airlines sell. The £750m cash injection is significant to hotel investment and lower the debt.
We're not been handed over to lenders as every shorter wanted. Instead we have the highest shareholder investing further in the business.
I agree where-is-my-. This wasn't the worst possible announcement. Had DEB BOD allowed Mike Ashley to inject cash and takeover the business we would have cheered. Investors of TCG were fixated with selling the airlines and tour to Fosun.
On the positive side, the airlines which is profit generating business will remain with TCG.
Current shareholders' interests would be "significantly diluted" as a result, says the company, but may be given an opportunity to participate in the recapitalisation alongside Fosun.
The SP will go down due to panic but not necessarily the end of it. The dilution will result in a long journey for SP to go up but at least TCG is not going into administration. On the other hand, if it goes private off the stocklist, unsure what value will the shareholders get.
This could be an interesting investment.