Member Info for Soder

Why do we need UAE money to do this. Why can’t they just make it an attractive tube proposition for U.K. investors to put money in this fund. Tax incentives etc. Why let the UAE benefit from our world leading education and research and science. What do they bring to the table? Nothing but dirty dollars.

Yep about half Is being used daily.

The key point here is the data means means the huge boost in 2nd half performance for ncyt only had November and December contribution from the roll out.

To match that 2nd half we just need jan and feb in pillar 1 to see same volumes. So far January testing was 6 percent higher than dec. and dec was 4 percent higher than nov. For the first 9 days of feb we are also 3 percent higher than first nine days of jan.

Basically the roll out is continuing and the tests we are doing is still increasing.

Just looking at this data more. Specifically testing and capacity by pillar.

Why did the testing capacity for pillar one spike massively overnight on 25 October and then again on 28 October? Was that ncyt contract rolling out? Would maybe make sense - 3 weeks after announcement to get kit in place and training?

It’s been steadily increasing since and goes up pretty much every day. So something is being rolled out slowly but surely.

https://coronavirus.data.gov.uk/details/testing#card-tests_conducted_by_pillar

Despite overall number of pcr coming down as infections decline, pillar 1 is steady as a ship. Expect that to continue for many many months (probably years) as even if infections ever got close to zero you will not get admitted to a hospital without a pcr test. All the staff and patients will be tested as a preventative measure.

Would the new variant test from ncyt be used for pillar 4?

Let’s just hope the dip ****s running the big institutional income funds get their heads out of their ESG asses and realise it’s their job to provide income and not save the planet through green washing.

Institutional equity funds are neglecting their clients by avoiding this sector and forcing a green agenda on people who may just want them to make the best investments rather than the fake greenest ones.

@Polemic couple of things...

You won’t find a fixed income fund that can’t take equity in restructuring situations where it has owned the bonds. They may not be able to buy shares but they can take equity as a result of debt for equity exchanges.

Then specifically with regards to PMO, most of the debt is bank debt. That bank debt has largely sat with distressed debt funds for several years now for the purpose of loan-to-own and debt-for-equity strategies. They can take the equity. They WANT the equity.

The retail bond is also small and a rounding error in terms of the debt stack. A decent chunk of that also sits in hedge funds. Those that can’t take equity would have sold it now for higher than they would get back by taking the additional cash option...or they would take the cash option.

Stevo had not considered the divi so thanks.

Will also have a look at capex but initially I am just here for the trade into deal completion but like the fundamentals so will prob stay after.

For people saying it’s not valued in line with current oil px. Nothing is. Oil is the new tobacco. Not ESG friendly and all the institutions are dumping it to buy overpriced wind and solar. The sector offers great value at moment. Just look at shell. Last time oil was up here RDSA was 40 per cent higher. Cash flows will come and then the tree hugger investors buying vesta at 25x will go fck what did I do.

Like all things in Mexico, there is a price to fix all problems

Yes. Even my Nan could. There is an merger going on in the background that needs to clear before we trade on fundamentals. Relax, bro.

People are missing the point with shortfers here. They are NOT expressing a negative view and shorting stick as they think it goes lower!!! they all own the bank debt and are just pre hedging before they get allocated stock. They will all be left long the equity post the deal and like it. But locking in some pnl is smart risk management for them.

Just stop looking at Sp until after March. You will be rewarded.

As per the presentation...
Closing net debt will be $3.2bn with leverage of 1.3x. That gives implied ebitda of $2.4bn.

Max number of shares that will be in issue is 18 510 653 520. Current sp is 20.5p which is about $ 0.28.

That implies a post merger mkt cap of $5.1bn. This an enterprise value of $8.4bn (mkt cap plus new debt). Divide that by ebitda and gives you ev/ebitda of 3.4x. This will trade at at least 5x post merger and you can comp it to the Norwegian peers.

That implies a 76 percent upside from current sp. just wait for deal to close. Free money. Dont stress.

They own bank debt against it

Good trade stevo.

As of end of jan, the deal has support of 92 percent of super senior creditors and 86 percent of senior claims.

It’s in the bag.

Plan meetings on 22 feb, sanction hearing 19 march and effective on 29 March.

Stevo12 - forgot to say also. The retail bonds are currently axed and live bid at 83.5. That is, a holder can sell them at 83.5 today instead of taking 60c plus 20c recovery by holding for the deal to close. So if you did not want the shares you have better economics by selling now. The single rational reason you do not sell is because you want the shares.

Also those retail bonds also not so retail anymore. Lots held by funds and brokers bidding them also for funds today.

The long and short of it is, that since the oil crash of 2016 PMO has debt has been hoovered up by hedge funds. The banks jumped long time ago and a few relationship guys left with other banks owning it on their trading desks. The downside to the trade of buying the RCF trade was getting repaid at par. The upside was getting hold of equity. And this deal combined with the oils slump meaning they can get the equity at 20p is like the dream scenario.

Distressed debt is otc and deliberately murky so nothing I can send you unfortunately. But take it as gospel.

The debt is quoted by bank trading desks that own it in huge size at a higher price than the current implied recovery through it. The only reason for that is that the shares have significant option value at current levels.

Everyone should sit tight and wait this deal to to close.

Arcm tried to sell 200m piece of rcf pre Xmas so they own at least that much. They will be covered by the lockup without a shadow of doubt.

Also a block of the rcf traded in December at around 80c and in the distressed debt market it is indicted low to mid 80s today. the terms of the restructuring give creditors the following options:
1. mid-70 cents cash recovery via repayment with no equity, or
2. Around 61 cents cash plus around 20 cents of equity in the combined entity.

Ask your self, why would distressed debt funds be buying this at 80c to get the shares and sell them for an 80c recovery? They won’t. They are using this trade to get hold of the equity cheap and ride it higher without moving the stock price. What would happen if they went to try buy £50m worth of pmo stock given its £194m market cap? It would not be possible and if they tried they would send the share price skyrocketing if they tried. But they can do it by buying debt to get the equity. That is their trade and those shares will be held and ridden higher. Trust me, I’m a doctor.

@JenniferE “ I don’t think that the banks and bond specialists will be interested in the long term upside potential of the shares they will basically just want their money back.”

This is just not the case. The bank debt has been traded and sold by banks for several years and now largely sits with a large group of hedge funds and bank prop/distressed desks. All these guys not only can take equity but want it as they want the upside beyond getting their money track.

There are very few commercial banks that are left in the facility and those that are either hold it as trading positions on their distressed desks (essential prop positions and can take equity) or they are relationship banks of chrysaor and PMO. The relationship banks have had years to sell this and could even have sold post merger announcement. They haven’t and will know the terms of the lock up so will hold the equity for as long as required under this agreement. But regardless, there really are t many left. DK, Varde, ARCM, DB, Voya etc bought much of the banks exposure already with a view to getting equity upside in a restructuring. It’s what they do.

Have known this co for a long time but was never been able to buy the shares due to a restriction posed by the company I worked for.

Just want to say that the theory there will be a load of lose stock from creditors after the merger is a myth. All the bank debt turned over into distressed debt fund hands over the last 4 years and no banks left now. All the guys who bought that debt are fully able to take shares and in fact want it as their funds target equity like returns. There is no way those funds are coming out and dropping stock when oil is 60bbl. Also have you seen the lock up? Most of them can’t sell anyway.

I just sold in full - down about 60 per cent: ouch. Something does not smell right for me. Genuinely, wish you good look guys! Have a few other names which have performed well against this APGN, SAVE and NCYT so not the end of the world but painful nonetheless.

Lesson for me here is not to invest in something I don’t really understand.

Cos it’s not growing. It was last year. But ebitda last year of 15m is likely to be mid single digit this. Say 3-6m ebitda range.