Member Info for Straycat

FH1,

Big bread crumbs though.

Those boardroom breadcrumbs work fine for me.
I just wish I could have been a 'good leaver' under VCP terms like Sami.
On which matter only a few short weeks (5) 'til his replacement is in situ and steering the financial course for GKP......funny we haven't heard anything about it though isn't it?

Is that what goes for an argument Mikey?

I'm not Paul. I don't even know who he is, but I do know you're attempting to insult me.

Well here's the thing.

I'm not necessarily right about any of this.
All I've done is to put together the available facts and made some sense of them.
I'm perfectly relaxed about being faced down by a stronger counter argument.
All I ask is that it's fact based.

So why don't you do that instead of behaving like a small child with a slapped arse.

Idiot.

Mikey,

I've read the papers relating to that link, and the 2015 Consent Solicitation appears to relate to a particular approach which later fell through.
Also, I note that that whole issue was before the Company restructure in 2016.

You don't understand accounts do you Mikey?
Those unsecured Loan Notes (which rank pari passu with all other unsecured creditors) sit in the balance sheet.
They are NOT A P&L ITEM.
When they are redeemed they come off the balance sheet. Their only impact on the profit and loss is as to the interest charges incurred in having the Loans at all...10% a year or a $10m reduction in profits.
Stop embarrassing yourself and read a book on basic accounting.

Exactly.

'the Lender is GKP'...

I didn't think I'd have to engage in a course of basic accounting with you Mikey.
But so it has proved.

You're now writing meaningless tosh cos you're out of your comfort zone.

As I recall one of the reasons for replacing the old Bond Notes with the new was to get rid of restrictive covenants relating to m & a?

Why was that I wonder?

Mikey,

Why do you think the loan appears in the balance sheet as a liability.
Let me help you. It's because it's a liability.

Invstrat,

If there is a buyer and a price has been struck, it will have been struck on the value of the field, nothing else matters. How GKP maximise shareholder value in advance of the sale is a matter of no consequence to the buyer. Why would he care? Whoever he is he'll have his own money and his own plans.

Oh Dear Mikey,

GKP are the borrower. They have sought out the facility which was oversubscribed.

FH1,

That's right.

But if that really were the loan purpose then the Lender would have insisted on security based lending.

Thanks for that Mikey,

But if the New Loan Notes had the legal effect of acting as surety then that would have been declared in 2018 when GKP replaced the old Bond notes.

In fact they present as a simple five year unsecured loan with all the creditor insecurity that unsecured loans attract.
And as such are simply unnecessary for trading purposes imo.

Indrid,

You and I know It's not a zero sum game.

Him being wrong doesn't make me right.

He just doesn't get that.

If he did he'd counter my argument with a better one of his own.

Instead he just shuffles off to the naughty step for a sulk.

TM,

Not necessarily. They might take their preferred route of Loan replacement in 2023.

However, I would make two points here:-

1) That is a stupid way to spend money and degrade profit.
2) GKP could have easily paid off their existing old Loan Notes last year out of cash flow. They would still have generated enough cash to develop their capex to schedule, initiate a dividend plan had they wanted, and engage in some buy back activity.

This is the innate strength of GKP because of the stupidly low lifting costs and the size of the field. It is a CASH GENERATING MONSTER.

So if you run the numbers through to Loan redemption in 2023, GKP won’t even notice the Loan payback then because it will be petty cash in their bank balance terms as their plans bear fruit.

The question therefore that requires answering is, why take on extra loan facilities that will never be used for trading purposes? It looks stupid. Unless there are other motives for sacrificing profit.

And it’s not enough to talk of covering ‘eventualities’.

IMO. DYOR.

TM,

No. It's shown separately in the accounts as a balance sheet liability associated with reinstated notes .

The cash balances are shown as current assets.

BB,

As a matter of FACT:
1) No facilities have been used AT ALL since they New Notes were created;
2) They have cost us over $10m in the past twelve months with an interest charge of $5192k applied in the first six months of 2019.

When will these extortionately expensive funds ever be required prey tell?
And why couldn't they be raised on need, bearing in mind the operational slush fund that our bank balance has become?

'to cover eventualities' you say?

Please name one that is even remotely possible.

By the way, more properly I should have 'lost the plot' according to you, not the place.

Indrid can probably help you understand this better.

With apologies to all non believers out there.

The following is just one way of interpreting recent events, making sense of commercial nonsense. If there are other ways then these should be investigated too.

Hidden in the 2018 annual report, apropos the new Loan Notes, GKP stated that:-

‘The New Notes give the Group the flexibility to raise up to $200m of additional borrowing.’

It’s not just a set of replacement loans for the previous arrangements. This steps it up a gear.

Can someone, anyone, tell me why we would possibly wish to seek out additional (and unsecured) facilities at this level given our natural cash flows?

These facilities are CLEARLY NOT for operational purposes and were CERTAINLY NOT required in 2018.
Up to $200m in required additional operational borrowing? Please.

But the Board agreed it and with a ten percent annual coupon which has already cost us well over $10m in interest charges since announced.
By 2019 y.e. Those charges will have risen to approx. $16m since the new deal was struck, and $10.3m in the year.
That’s all off our bottom line and the Loans are completely unutilised.
Excellent deal for the Lender, who clearly regards the Loans as risk free because they are offered unsecured.

If the Loans were an insurance policy against operational mishap then they would have inevitably been secured against assets, given the absurd market capitalisation and net assets of $498.8m at the time of the loan.

Not so much a good deal for us though, unless they’re required for an entirely different purpose.

And that might mean share buyback under Resolution 13(b), specifically requested by Jaap Huijskes and passed at AGM.
That Resolution gives the Board new and untrammelled rights to buy back ANY AMOUNT OF STOCK for treasury or cancellation as Companies Acts allow!

The Board could concentrate the shareholder value presale by buying back their own shares.

That’s why they’ve had to take care of those staff option shares.
That’s why Sami’s gone…he’s no longer required. There will be no meaningful replacement. Less than six weeks to go and nothing after a five month ‘search’.
It’s why the production plans are slightly delayed. Why would you commercially develop an asset you’d already sold in principle? Utter commercial madness.
Better to stick all your spare cash and your loan facilities into GKP via buy back. If it’s already sold, it’s the best and safest investment you could ever make!

The P&L projections for this business are off the chart as it proceeds with plan….now is the optimal time to sell.

But this also implies a level of sophistication and obfuscation beyond the talents of JF and SZ.

The acid tests will be:-
1) whether any buy back is recommenced;
2) Whether Sami is replaced by a heavyweight Newbie.


This is controversial stuff I know, but it deserves discussion based on the facts as they present themselves.

All IMO, DYOR.

ANGINA,

I reckon there'll shortly be new announcements instigating more significant buy backs either for treasury or cancellation utilising Resolution 13(b).

Invstrat,

Not being a LTH I don't have your passion for past misdemeanors, but if we all benefited in the same way as the option share holders on sale at least we'd all benefit equally.

And yes, JF's and SZ's pay offs will still be hard to take.

Hi FlyingHorse1,

Is it the analysis you disagree with, or my conclusions drawn from it?