Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
These are comments made by a poster called WShak on t'other board and he's an experienced bond investor who understands that it's the price action of the bonds of a company rather than its equity that provides a more accurate insight into the financial strength or not of the company in question. The poster appears to think that PFC is financially constrained, badly.
Just be bloody careful in situations like this. I'm waiting for news from the company before buying. I want to know how they intend to repair their balance sheet, satisfy their creditors and bondholders and secure guarantees for contracts before buying.
I'd like to see a D4E and asset sales to repair the damage. The company has to take all necessary steps to protect the future of PFC as a listed company and therefore its equity holders
3)
'I owned Enquest and Tullow bonds at their lows, added more and still own them both now.
Tullow bonds are my largest position in any single name, ever, as a result, currently 97c.
I don’t know what will happen here, but can say I’m not attracted to either bonds or equity.
The situation with Petrofac is nothing like either of the names mentioned.
If equity holders are holding out for a miracle, then I’d look to Sirious Minerals for inspiration, where Anglo came in and bought them out of nowhere.
Shareholders didn’t get zeroed, although they were still mostly unhappy. The bonds went from 35 to130 as a duff credit went from junk to blue chip!
The PFC bonds have hit new lows tonight at 38c, so something has to give here.'
end
2)
Kulvinder,
If it’s any consolation, I made a huge loss on Afren bonds, despite concurrently making a large profit on a short trade on the shares.
The shares obviously went to zero as the balance sheet suggested that they would. However, the company also needed extra funds to survive that no-one (including bondholders) was willing to provide.
As a result, bondholders walked away from the table, and bonds fell from about 40p to zero too. Their rationale was that they weren’t willing to throw good money after bad, given things were so dire.
I lost far more on the bonds than I made on my short.
cont..
Just be careful here and limit your exposure, just in case :
Read this from ADVFN:
1)
'Hi Paul,
I've been looking at this from the perspective of a potential purchaser of PFC 9.75% bonds - currently trading at sub 40c on the dollar. YTM is currently 59%!
I suspect that the recent increase in the share price is more to do with a surge in borrow costs for those short - some of them may have decided to close at borrow costs of 80%+.
Normally, that kind of borrow cost is associated with the final thrashings of a dying fish, as borrow dries up.
Coming back to the PFC bond, I see there is a coupon payment due 15 May 2024 which will cost the company $29.25m.
They may well pay that to give themselves time but I'd bet that there must be discussions going on at board level to discuss whether it's prudent to do so. My bet is that the upcoming results will explain why they won't be paying it as restructuring looms.
Furthermore, there is $252m in debt due for repayment in October 2024,unless something has changed from the last annual report. it may be that the $162m RCF portion of that isn't fully drawn down and both of these loans are amortising down if they are being serviced properly.
Looking at what happened at Metro Bank doesn't really help the situation, in my view. Shareholders were largely wiped out there with a highly dilutive placing at 30p with equity being worth sub £50m from memory? Subordinated bondholders had to take a bath as a condition of new money coming in from an existing shareholder but other shareholders only got marginally above nothing in reality.
it'll be fascinating to see how this plays out, but it looks more like Afren to me than anything more positive.
I haven't bought the bonds yet - they may be a decent punt, although there must be a big risk the next coupon doesn't get paid.'
I can now buy below bid which is highly unusual unless you have access to DMA, which I don't
So that may invoke some buying interest if the meeting is bullish
I believe Dolphin will be supplying the drilling set-up on Kraken
Two concerns -
A verminous Labour government
Potential legal action against Kraken in the Cambo style..some slimey lefty tw*t will without doubt explore this possibility
Debt can suck the life out of equity
I hope so cos I bought 25k throughout the day
Lots of references to M & A in that
ENQUEST PLC
5 April 2024
Director Changes
EnQuest is delighted to announce the appointment of Marianne Daryabegui to the Board of Directors with effect from 30 May 2024, subject to shareholder vote at the AGM.
Marianne is a seasoned capital markets adviser who has focused on oil and gas throughout her career, firstly in-house at Total, then as an adviser at BNP Paribas. Backed by her experience in corporate transactions, capital markets and structured finance, Marianne joined the banking sector and has since advised multiple oil and gas companies. She co-led the M&A Energy and Natural Resources practice at Natixis and was also formerly Head of Natural Resources at BNP Paribas. She was appointed as Chief Financial Officer of Lithium de France in 2021 and led the €44 million Series B financing of the company. Her experience includes the listing of Arverne Group on Euronext through its merger with Transition SPAC.
Marianne is currently the Head of Investors Relations and M&A of the Arverne Group and is a non-executive director of Pharos Energy.
Marianne will join the Audit Committee.
Commenting on today's announcement, Gareth Penny, Chairman, said:
"I am pleased to welcome Marianne to EnQuest. Her extensive capital markets and financial experience will be of great benefit to the Company. I very much look forward to working with her as a member of the Board."
US jobs report tomorrow so DJIA may be pricing in any news that reduces the possibility of the FED cutting rates
Blasting through $90
Israel expects an 'imminent' Iranian attack
Superb analysis. Appreciated
Price looking perky