Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
The H1 results assume nil revenue as the two deals have not closed yet.
I`m eager to read the FY results!
In all of this sea-of-red with sharks in suits shorting Sterling (try saying that when you have had a few drinks() it is easy to overlook the fact that RH looks to be standing on firm ground at $14,000. Just about the only thing that hasnt is EGGS!
yep, Mr Strong at it again, pinching all of them for his daily breakfast
I cannot find any such article in the FT or Times
WoW - you have answered your own question: if CW gets dissolved, the damages against them get in effect dissolved too. They do not get carried over and there would be no "fresh" claim against NewCo unless the Arrangement Agreement made provision for that (highly doubtful).
This sort of phoenixing happens regularly with companies of similar names being incorporated : WoW Ltd; WoW (UK) Ltd; WoW (Global) Ltd, etc. When one closes down the other one opens up ... the operation doesn`t skip a beat.
O/T
Did Niemann cheat?
Magnus needs to get off his fence and produce some evidence.
Surprised Moke has not started proceedings for defamation. The fact he has not might be telling.
Did you read the full paper: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4201503
The authors contend for two alternatives remedies: (i) specific performance - which in the CP case was not possible - the Court had looked at this and on the facts that was precluded; and (ii) "expectation damages as measured by the loss of consideration to the target’s shareholders".
However, assuming the author`s view that the loss of synergies argument is correct and the second remedy ought to have been awarded instead, the damages would in fact have been greater: $1.3 bn as opposed to $1.2 bn.
Not sure how that spells good news to LTHs. And CW did not "put forward any alternative calculations".
The Court looked at this 2nd remedy also and on the drafting of the Arrangement Agreement the shareholders did not have rights to sue directly for loss of consideration. Certain third party beneficiaries did however. So this omission was no accident. On the other side of the coin, CP were authorised to act as agent on behalf of those third parties with enforcement rights. But again not in respect of the shareholders.
So, taking that into consideration, does not assist LTHs here at all - in fact the opposite. The authors noted the exclusionary nature of the AA in terms of express provisions and observed: " In Cineplex, the court could have found that Cineplex should be awarded damages in an amount corresponding to its shareholders’ loss of consideration without treating Cineplex as claiming or collecting on the shareholders’ behalf and without an obligation on Cineplex to distribute the award or parts of it to its shareholders. Cineplex had an expectation that its shareholders would receive the purchase price if the transaction had closed, in line with the contractual principles for damages".
Here they are suggesting that shareholders loss could be construed as CPs loss.
Even if that is the case and they are right, the net result is that the damages would have been even heavier.
28% of portfolio. If this tanks I`m fooked!
Conviction.
Patience.
SLP pay a 8% divi in December. Damn. too late to rotate that in-flow of funds.
Off topic and LOL fk heck TOPS dropped 44% today. WTF was I thinking. Thank Christ less that 0.8% of holding. Some folks are down plenty on a reverse stock split and the fkers have even published a fresh raise. Mike Hunts the lot of them.
Integrity so undervalued. I
I`m hoping in Mr McD et al we trust!
GLA
Like all gamblers, you only hear from them when they place a winning bet.
They never brag about their losses.
Did you see the document presented by Cine to the Bankruptcy Court? It was laid out in the manner of a glossy movie brochure with "The Story"...."The Plot Twist".... etc and then "The Stars" and then their pictures/profiles.
Says it all.
Arrogance Gave Him Up
Part 2:
For the astute distressed investors and legacy lenders that retained the allocated equity and who persevered with the restructuring and a highly capable management team –aware that Danaos was also a % shareholder in Zim International Shipping (as a result of Danaos being a large lessor creditor in Zim's own restructuring), they will have benefited from the recovery of the global container shipping and Zim's $5bn IPO in Q1 of 2021. The result of these events was a recovery of the share price from a low of $14 during the restructuring to a high of $79.87 in January 2022.
Source: : Howard, Warner and Beatty [etc]
Hope springs eternal:
Danaos, a NYSE-listed, Marshall Islands-incorporated, Greek-headquartered international owner of containerships that chartered its 55 vessels to many of the world's largest liner companies, found itself exposed to an exceedingly weak containership market, which was exacerbated by Hanjin Shipping's 2016 collapse. While in Korean receivership, Hanjin cancelled eight long-term fixed rate charters. To make matters worse, in July 2018 Danaos had agreed to charter modifications with Hyundai Merchant Marine that substantially reduced its charter revenues. From December 2016 until completion of its restructuring in August 2018, Danaos operated in financial covenant default (at times subject to waiver). This inevitably resulted in certain of its indebtedness in multiple silos trading at a discount into the hands of a number of distressed investors.
Following 15 months of negotiations, certain lenders to Danaos spearheaded the entry by its stakeholders into a restructuring support agreement in May 2018 (the RSA). The structure of Danaos's secured debt documented across 11 different facility agreements, each secured on a different set of containerships required the possibility of implementation through a US Chapter 11 proceeding. Other restructuring options such as a UK scheme of arrangement were prohibitive due largely to class composition issues, whereas others such as a Greek insolvency proceeding would have been likely to be value destructive. To motivate disparate lenders to decide on their preferred take-back consideration Chapter 11 was presented as the fall-back option.
Following further negotiations among Danaos' stakeholders and a $320m new debt commitment from Citibank, in June 2018, the parties entered into an amended and restated RSA providing for implementation by way of a fully consensual out-of-court restructuring. The RSA was governed by New York law and the out-of-court restructuring was governed by English law and consisted of an amendment and extension of all of Danaos's loan agreements, together with a partial equitization of Danaos's $2.2bn secured term loans, which reduced its outstanding debt by $551m. The new Danaos common shares provided to the equitizing and consenting lenders equalled 47.5% of its post-restructuring outstanding equity, and the shares remained listed on the New York Stock Exchange. The restructured term loans, the first maturity of which was extended to December 2023, were documented across nine facility agreements, each secured on different vessels, are further governed by five different intercreditor agreements each executed through meticulous implementation mechanics.
** What I don't know is how much of that can be considered by the Appeal Court **
Indeed, "trial is the first and last night of the show" as the famous saying goes.
Appellate Courts seldom overturn findings of fact but valuation is more of an art than a science and most definitely is not a fact. So where there life, there is hope.
Interesting point. The CP expert derived npv of synergies at $1.2366 bn on annual "combination benefits" of $163.5 mn.
Assuming zero growth on that 163, gives a discount rate of 10.63% (assuming risk free rate of 2.98%).
The point is the time-scale. To get to that npv the cash flows have to extend to 10 years.
A decade of losses. Why not 9 why not 11?
I see it is standard practice in DCF valuation to extend cash flows to 10 years to arrive at npv. But to do so by way of measuring damages in contract law is untested as far as I know.
WoW: Query "[i]n the case of a listed company a restructuring transaction may be of sufficient magnitude that it requires the approval of shareholders pursuant to Chapter 10 of the Listing Rules. To the extent that a transaction falls into the 'Class 1' category, shareholder approval will be required. The restructuring of a listed company in 'severe financial difficulty' may involve the disposal of a substantial part of that company's business within a short time frame Where such disposal would ordinarily require shareholder approval as a Class 1 transaction, the FSA may waive the requirements for such shareholder approval in extreme circumstances: the company has no alternative but to dispose of the assets in question; it could not reasonably have entered into negotiations earlier to enable shareholder approval to be obtained; all alternative methods of financing have been exhausted; its banks confirm no further finance will be made available, existing facilities will be withdrawn in the absence of the disposal; the probable appointment of receivers, administrators or liquidators unless disposal is completed. The question of whether or not a shareholder is entitled to vote his shares in opposition to elements of a restructuring was considered by the court in relation to the restructuring of the Brent Walker Group plc. The evidence was that if the restructuring was not implemented, and the lenders would not implement the restructuring unless those aspects of the restructuring requiring shareholders' approval were approved, the company would fail. The court held that the lenders were entitled to seek an order which would protect their security from being deprived of any value. Recent judicial policy of substituting the interests of the members of a company with those of its creditors in circumstances where the company is insolvent or near to it. In Brady v Brady court regarded interests of company as synonymous with interests of creditors where company was insolvent or 'doubtfully solvent'. In analogous circumstances of a rescue implemented under a scheme of arrangement, the court has consistently held interests of a particular class of shareholders may be ignored if the economic reality is there are in any event no assets available for the benefit of the dissenting class (Re Tea Corpn Ltd). The decision of the court in Re British and Commonwealth Holdings plc (No 3) and Re Swissport Fuelling Limited also concerned Schemes and confirmed validity of ignoring the interests of an affected party in circumstances where it has ceased to have an economic interest in the assets of the company. In those cases, however, the relevant parties did not concede that they had no economic interest, a view that the judges had no sympathy with on the evidence, such that the decisions are a good authority for the proposition that out of the money parties can be ignored in determining who would be required to approve a scheme."
"Cineworld plc: As a premium listed company on the London Stock Exchange and the world's second-largest cinema operator and parent company of US-based Regal Cinemas, Cineworld was severely affected by the COVID-19 pandemic. As over 500 distressed investors invested in its $4.5bn of facilities as the debt traded in the low fifties, the company initially sought to restructure its debt by transferring substantial assets to an 'unrestricted subsidiary' that would fund the asset purchase with new money. This transaction was vigorously resisted by both legacy lenders and the distressed investors in the company's debt and this culminated in an alternative transaction whereby approximately $550m of partially priming term loans were injected into the capital structure on a priority basis. Of this priming facility, $450m was new money, while up-tiered RCF loans from Cineworld's existing debt comprised the remainder. The new money was priced attractively and also benefited from tradeable warrants in the UK plc equating to 9.9% of the plc's common shares.
The November 2020 transactions helped to sustain Cineworld through a protracted shutdown of its cinemas in the US and the UK from the fall of 2020 through to the spring of 2021. However, the protracted shutdown, a deferral of key film releases and an adverse judgment in connection with legacy litigation resulted in additional funding requirements which were met initially by a $213m convertible bond due 2025 carrying a coupon of 7.5% per annum and convertible into ordinary shares of the Group. The initial conversion price was set at $1.7620 per share (which equated to £1.2850 per share based on a USD:GBP FX rate of 0.7293) representing a premium of 25% above the closing price per Cineworld share on 24 March 2021. The convertible bond bridged an anticipated US CARES Act tax refund as well as a further utilisation of the priming facility basket of $200m in July 2021.
Cineworld is a good example of a distressed investment that creates an attractive opportunity for the provision of 'rescue' capital for distressed investors whereby their strategy positions themselves as the only possible source of that capital. As well as receiving an attractive return on the rescue priming facility through pricing and the warrants, the trading price of the existing £4.5bn facility also recovered to a high of 88 cents before flat-lining at the time of this 3rd edition to 82 cents."
That was March, 2022.
Might wanna change your handle to "Gift West Africa" :)
https://find-and-update.company-information.service.gov.uk/company/05212407/filing-history?page=1
see 17 May 2022 PDF 4 pages and section 551 notice would appear to suggest that Directors powers are not unlimited in terms of the power to "convert any security into shares".
Perhaps the author of the RNS presumed that by analogy, given the alternative to have one`s leg amputated or die, the patient would choose the former over the latter.
Clarification to CINE might be in order for those interested.
GLA
" Stock exchange has a ruling limiting the number of shares a company can issue. "
Maybe so..
But see SYME - 42 billion (and counting) at the last count.
So if you are right, the rule does not seem to be working too well?
see CA 2006
Section 551 Power of directors to allot shares etc: authorisation by company
(1)The directors of a company may exercise a power of the company—
(a)to allot shares in the company, or
(b)to grant rights to subscribe for or to convert any security into shares in the company,
if they are authorised to do so by the company's articles or by resolution of the company.
I have not looked at the CW Articles of Association.
I presume the Directors have this power - hence the RNS as drafted etc.
But I might be wrong. Others closer to this will know more.
GL
WoW:
"it is expected that any de-leveraging transaction will result in very significant dilution of existing equity interests in the Group and there is no guarantee of any recovery for holders of existing equity interests."
That statement looks conclusive.
It does not carve-out any "subject to shareholder approval to any such dilution". It appears to be saying in effect this is going to happen with you or without you.
My understanding under CA 2006 is that equity shareholders are consulted perhaps with amends to Articles of Assoc. etc and other equity docs.
But I query, if that were the case here with CW, then why that unambiguous language?
It makes no sense except if C.11 changes that position. Which I think must be the case. Either that, or the author of the RNS (as copied in the bundle of the Court Papers IIRC) has made a serious blunder. That must be unlikely.
Time will tell
GLA