Member Info for schlemiel

It's looking very good

News needed on cash raise....pls

My thoughts exactly. Debt is a cancer, just look at Petrofac today

'Maybe. Better to park those worries for another day, mindful that periods of stasis and drift invite extrapolation. Markets, fortunately, are often a lot more dynamic. For now though, and with no apologies for any implied cynicism, I present the 20 FTSE Small Cap (non-investment trust) stocks that Peel Hunt presumably sees as most vulnerable to the next surge of M&A frenzy: those with a market cap of at least £100mn, and an enterprise value to operating profit multiple of no more than seven. How many will fall to the sword in 2024?'

Company TIDM Sector Sub-sector Price (£) Market cap (£mn) P/BV PE (FY+1) FCF Yield EV/EBIT EV/Sales GP/TA

CAB Payments CABP Finance Regional Banks 1.23 312.60 2.38 7.9 18% -3.7 -1.6 -

Costain COST Industrial Services Engineering & Construction 0.762 212.10 0.96 6.3 3% 1.8 0.1 22.4%

EnQuest ENQ Energy Minerals Oil & Gas Production 0.1542 292.09 0.82 2.1 50% 2.6 1.1 30.3%

CONT.........

https://www.investorschronicle.co.uk/news/2024/04/11/worried-about-uk-small-caps-just-look-at-peel-hunt-s-earnings/

Thinks ENQ could either become a takeover target or an acquirer

IC yesterday

If bondholders are willing to accept equity for their debt then that's a positive in anyone's book. Yes dilution, yes a temporary share price hit but over the med-long term with the correct stewardship Petrofac will be a healthier beast

Absolutely. I'm still on the sidelines until the full financial quantum of any deal is finalised but it does look like the bondholders are fully on the side of the company's plans to keep their equity listing, which is the most important thing. No one wants to see any shareholder completely wiped out here. I had a friend who suffered heavy losses at Sirius and it nearly forced him under. Not great to see

The CEO has one job, to save the company and to maintain shareholder presence.

Good luck

Nm

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

Has Matt now flushed the crap out of the company, cleared the decks and detoxified the entre enterprise. If the market thinks he has then the turnaround may start here..who knows

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

Nationalising Cascabel would destroy investors confidence in a country that is struggling as it is. A move like that would be fecking suicide

Debt can suck the life out of equity

I hope so cos I bought 25k throughout the day