Afren Share Discussion Threads

[vision88] 15/7/2015 02:27

This has now become a choice between :The dammed if you do vote no and dammed if you don't vote yes and now its Wednesday 15th JULY 2015 , All votes are expected to be cast either way by today , All the opinions are all so in .

Its counting time folks , time to play The Old Old duke of York

When they are up they are up

When they are down they are down

WHEN THEY ARE NEITHER UP NOR DOWN THEY ARE NEITHER UP NOR DOWN .

BOND HOLDERS V SHAREHOLDERS THE WINNERS WILL TAKE IT ALL.

It was a Great Company Once

we,ll meet again don't know where don't know when but i know we ll meet again some sunny DAY ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

[whiskeyinthejar] 15/7/2015 00:16

BiggerThus- Seplat are dual listed in Nigeria and London main LSE exchange. I think its important that Nigerians can buy shares as foreign oil companies are resented in Nigeria. Afren aren't really a Nigerian company. Anyway I hope you can get some satisfaction from Afren.

hpcg- Seplat has a large stash of borrowed cash that it's paying interest on, but not using. Just getting that money working would be bullish for Seplat, even better if it buys Afren's producing assets cheaply. If Afren and Seplat are talking then bondholders must be ready now to deal. Seplat don't want to wait and have cash lying around anyway.

But the current bull case for Seplat is gas production and midstream, not oil. It plans to triple its gas production by end 2016 through massive investment:



I'm also optimistic that new president (Buhari) can reform the oil sector. He's already sacked board of the national oil company and rumour is he's going to take oil minister job himself because it's critical that Nigeria increases production. They cannot afford to be hard on oil companies in Nigeria as they need the investment imo. Herein lies the risk though and why Seplat is super cheap But PE of 3, dividend over 9% and decent growth story and I cannot think why anyone would buy Afren rather than Seplat.

I will watch oil supply data, and maybe traders will go short on oil for a week or so, but fears Iran will flood the world with cheap oil are unfounded imo and oil at current level I think will fuel enough economic growth to keep demand growing.

Anyway we'll have to wait see what happens with Seplat and Afren. Nothing until after Egm vote I expect.

[hpcg] 14/7/2015 20:56

WITJ - in which case I understand where you are coming from! This is not a good time to be buying oil assets though as the oil price is heading right back down. World production is 2.5 mmbbls in excess of consumption with production increasing, not declining. Demand tails off into the northern hemisphere autumn before picking back up in the winter. Best to pick up Afren assets when the bondholders have got fed up with throwing good money after bad.

[harebridge] 14/7/2015 18:45

Apparently Seplat are eyeing up Afren again.......

[whiskeyinthejar] 14/7/2015 18:30

Seplat are already London listed. It wouldn't be a reverse takeover, market cap here is £20m and Seplat have $400m in cash waiting. And it's a consortium alongside Seplat:




But cash would go to bondholders. Shareholders in Afren have lost control to bondholders.

It's like your house, it's only yours while you pay the mortgage. Bondholders could have their right to control the board asserted by the courts(like with Mytravel), but board seems to have accepted bondholder control.

Things have to work like this, because you can't have people just deciding not to pay back a loan when they have an asset secured against it.

[biggerthus] 14/7/2015 17:56

hpcg, that's not true.
When you buy a company, the cash goes to the shareholders, not the debt holders.
And these are the same shareholders who need to vote 75% for the debt restructuring to go through ... and that is looking rather unlikely looking at the way the AGM votes were cast.

The debt holders are like loan sharks. They need paying when the bonds they hold say they should be paid; not before.
There are many ways a deal could be structured that would leave shareholders a *LOT* better off than under the current offer, while still being able to satisfy bond coupons.

A reverse takeover by Seplat (or other) would make sense. They get the London listing, and become the largest indigenous producer in Nigeria. And if they have the resources to service BH debt then the BHs can go whistle.
I think a decent share & cash offer would have SHs interested. And why wouldn't they be in light of the obscenely greedy proposal they are being pushed to accept ?
---
If Seplat takes Afren assets all the money would go to the debt holders.

[whiskeyinthejar] 14/7/2015 17:54

No I didn't miss it.

I hold Seplat shares, not Afren. :-)

I think Seplat may buy up the new shares if there is a Yes vote, or buy the assets if there's a No vote.

[hpcg] 14/7/2015 17:39

WhiskeyInTheJar did you miss this bit of the brokers note you published?

We know that Seplat previously unsuccessfully bid for Afren (Sell, TP 0, price 1.9p)

To spell it out, TP 0 means Target Price 0

If Seplat takes Afren assets all the money would go to the debt holders.

[whiskeyinthejar] 14/7/2015 16:18

Seplat is eyeing an acquisition, speculation that Afren is the target again.

CSL brokers have increased their target price from N457 to N749/share for Seplat.

In Sterling, that's increase in target from £1.47 to £2.42.

Seplat currently trades around £1.05, so that would be a 150% gain. Dividend is over 9%, PE is 3.2.


=-----=--------
JUL
14

NIGERIA | OIL&GAS | SEPLAT - Eyes on Afren

· Seplat has announced the release of US$368m in escrow cash. This is part of a total amount due of US$453m, which was allocated for an underlying acquisitions earmarked in Q1 2015.

· Investors may have thought that given the escrow nature attached to these funds, there was never any doubt that they would be repaid. We were aware of a timing issue related to exactly when the funds would be remitted.

· We have therefore added back N134/share (43p/share) in value from the US$368m remitted, which increases our target price from N457/share to N749/share, and maintain our Buy recommendation.

· We know that Seplat previously unsuccessfully bid for Afren (Sell, TP 0, price 1.9p), and so, given the timing of the proposed recapitalisation vote due on 24 July, a full takeover could still be possible if a ‘No’ vote is successful.

· In our previous note dated 9 January ‘Bargain Hunting in the Delta’ we examined the logic of any merger/acquisition between the two companies. We concluded that it could create the largest indigenous E&P in Nigeria, doubling Seplat’s 2P reserves, and trebling 2P and 2C reserves/resources, with the potential to achieve 200kboepd in production by 2018/19. Any acquisition of Afren would be a transformation in our view for Seplat, and could provide a significant catalyst to its shares given the discounted price which they could achieve now.

[dangersimpson2] 14/7/2015 15:54

I think the supplementary prospectus gives game, set and match. My reading is that they are restructuring the assets so the security belongs to the Noteholders without the risk of invoking any change of control clauses.

Given the supplementary prospectus it feels a little naive of ASOG to think that in a no vote there will suddenly be a better offer for shareholders. In my opinion the reality of a no vote will be the Alternative Restructuring will go ahead on 5th Aug, the assets will be owned by the Noteholders whether they want them or not, a sale of assets still has to occur and will only partially repay noteholders, the shares will be suspended as the plc will be insolvent. I can't see how they can publically declare the equity worthless in a no vote and keep it trading post-event.

[12bn] 14/7/2015 14:59

Get out of these quickly now but don't buy LGO at the moment,go into cash.

[batman9] 14/7/2015 14:31

Just voted No.

[hpcg] 14/7/2015 14:15

shaf200 - A very large number of shares are provided to various bond holders as part of the debt for equity restructuring. Some smaller bondholders will have covered these selling short already, but this path is not open to the large institutional holders. They will likely be offloaded in the market for whatever price they can get.

[jotoha2] 14/7/2015 14:10

New shares are already being sold down to the innocent , hence when they are officially issued they will drop very close to 0p

[shaf200] 14/7/2015 13:55

what do you mean 0p?

[hpcg] 14/7/2015 12:38

Shares at 0p are about to flood the market.

[shaf200] 14/7/2015 11:45

why is the share price close to 2p when shares at 1p will flood the market soon!?

[shaf200] 14/7/2015 11:43

yes... but 9p from 1p!

[centurionsid] 14/7/2015 10:20

Some YES Vote Reminders

POSITIVE Issues.

Shareholder value at 10% ownership of the company.
Open offer at 1p per share.
Company refinanced - continues trading.
10% future growth attributable to shareholders.
New management team.
Probable survival of the company.

NEGATIVE Issues

90% value of the company taken by BHs.
Shareholders have to pay for part of their own refinancing via an Open Offer.
Does the refinancing offer enough liquidity to trade forward?
90% control of the company will be in the hands of the BHs.
Existing shareholders will never have any say by vote.
Existing SHs have no trust that BHs will do what they say they will do.
Can Alan Linn run a company with total SH contol in hands of BHs?
Will BHs simply sell off assets to pay down their debt?
Will BHs milk the company of cash to pay down debt.
There is a twice yearly cash sweep to remove 50% of all cash generated.
Costly advisors permanently in place.
Will BHs take the company private and remove all value.
Can the BHs carry out their new business plan (one of the risks identified in the prospectus)
If Afren value rises to £1 billion share price under Plan A share price will only be 9p.

[centurionsid] 14/7/2015 10:18

2 DAYS TO VOTING DEADLINE

YOU MUST VOTE BY WEDNESDAY TO BE SURE YOUR VOTE IS COUNTED.

This is the most important thing you can do.

It is our opinion that the balance of risk and reward between the YES and the NO votes is in favour of the NO vote. The ASOG committee will all be voting NO. However that is a personal choice and should not to be taken as advice. As always please do your own research.

To see the full text of our opinion download this file.


Or watch it in video on YouTube at; hxxps://youtu.be/taPKl6H2jwg

If you are not sure how to cast your vote, download this file;



You can also watch "The ASOG Journey" video at;

hxxps://youtu.be/bweQ1N1DL8E

REMEMBER - You should have voted by 15th July latest.

[centurionsid] 14/7/2015 10:17

YOU MUST VOTE BY WEDNESDAY TO BE SURE YOUR VOTE IS COUNTED.

This is the most important thing you can do.

It is our opinion that the balance of risk and reward between the YES and the NO votes is in favour of the NO vote. The ASOG committee will all be voting NO. However that is a personal choice and should not to be taken as advice. As always please do your own research.

To see the full text of our opinion download this file.


Or watch it in video on YouTube at;

If you are not sure how to cast your vote, download this file;



You can also watch "The ASOG Journey" video at;



REMEMBER - You should have voted by 15th July latest.

[share_cruise] 14/7/2015 00:13

Not invested here but I strongly agree that investors should be voting "Yes"

Otherwise your shares will become worthless