Carillion Share Discussion Threads

[edmundshaw] 30/1/2017 21:23

The company has apparently stated that the high shorting activity is not down to the bond holders.

Actually, 2.5% is a pretty reasonable rate by the standards of the time. In fact, even after recent interest rate rises, Carillion only today refinanced £112m of maturing debt facilities at under 3% with no convertible sweetener involved.

[speedsgh] 30/1/2017 20:53

From 2015 Annual Report...

"On 12 December 2014, Carillion Finance (Jersey) Limited, a wholly-owned subsidiary of the Company incorporated in Jersey, issued £170 million of convertible bonds, which are guaranteed by the Company. The bonds are a senior and unsecured obligation of Carillion Finance (Jersey) Limited and the Company and are subject to a negative
pledge. These bonds carry a coupon of 2.50 per cent per annum payable semi-annually and based on the conversion price of £3.9856 will convert into 42,653,553 ordinary shares of the Company. Upon conversion of the bonds, the Company may elect to settle its obligations by way of delivery of ordinary shares, payment of a cash alternative
amount or a combination of the two. Unless previously redeemed, converted or purchased and cancelled, the bonds will be redeemed at par on or around 19 December 2019."

[w1ndjammer] 30/1/2017 20:42

think the strike price is 398p so your 370p no good

WJ.

[jaf1948] 30/1/2017 20:31

cw2000,

Here's the link:
hxxps://www.fca.org.uk/search-results?search_term=short%20selling

[cw2000] 30/1/2017 20:13

The shorters do seem to get a hard time here…
If you owned £10m of convertible bonds what would you do? I can’t imagine you’d get out of bed for a 2.5% return – I wouldn’t.
I too would place some clever trades and short the hell out of the stock as you can make money in both directions with this. There are 3 years to run on these bonds, we can expect an exciting time ‘til Dec 2019. My guess is that by then the bond holders will have closed their shorts and encourage the price up to the strike price (near 370p I think) to make their second profit.

… only my thoughts on the share price action…

Ps – can someone post a link to find the number of shares shorted please. Ta

[this_is_me] 30/1/2017 18:58

I have cash at the ready when the knife hits the floor. First shorter to blink will trash the rest.

[jaf1948] 30/1/2017 18:30

How about one word - parasitic.

[rcturner2] 30/1/2017 18:14

lol JAF, yeah the shorters actions can be summed up in a 10 word sentence

[m4rtinu] 30/1/2017 16:46

And a para from last years accounts (2015)

"In 2015, we renewed and extended the maturity date of our main revolving credit facility of £790 million by nearly three years to November 2020, at reduced pricing, which reflects the strength of the Group’s credit standing in the bank debt markets. This facility, together with private placement funding of over £300 million, £170 million of convertible bonds and other bank facilities means the Group has total
available funding of £1.4 billion, almost all of which matures in 2020 or beyond.

We therefore continue to have considerable financial strength to achieve our objectives and support our strategy for growth."

Any thoughts on this last sentence, please?

[jaf1948] 30/1/2017 16:28

The share price is low because of the shorters. The shorters are here because the rest of the sector have had profit warnings and they expect (or expected) CLLN to do the same, which they haven't.

I really don't believe there is much more to it than that.

[red_shed2000] 30/1/2017 16:26

The Germans (or any other right minded country/organisation) don't lend in excess of 100 million at a <3% interest rate without conducting a mass of due diligence. So unless this is the greatest cover up of all time these appear to be pretty safe....

I'm not saying that there might not be something lurking (and I am not saying that there is) but I can't see how it can be company threatening with that kind of confidence for the debt refinancing....hence I took a position after approx 1 year out.

Word to the wise though, my timings not always the best!!!

GLA

[essentialinvestor] 30/1/2017 16:22

LG, including fees, the % rate also struck me.

[edmundshaw] 30/1/2017 16:22

Lord G., great minds think alike... I hope!

[edmundshaw] 30/1/2017 16:20

Someone prepared to lend £112m to Carillion at sub 3% for 5 years says to me that someone with deep pockets thinks the default risk is next to zero.

Of course the German lenders may be very careless and free with their money whereas the US shorters may be terribly well informed and have done assiduous research into Carillions various contracts. And yes, don't ask, I too observed the trotters and the curly tail on that pink UFO.

[rcturner2] 30/1/2017 16:19

LG, a sensible post (3385). There is something odd here that's for sure.

[lord gnome] 30/1/2017 16:07

Yes, red-shed. A refinance at sub 3% can't be bad. That says to me that there can't be anything seriously wrong with the company.

[lord gnome] 30/1/2017 16:05

RCTurner2 - To be honest, I haven't a clue. Either there is an unknown unknown out there (unknown to me at least) and the company is going bust, or this is just a market oddity that sooner or later will sort itself out.
I am sure that the shorters know a lot more than I do, but I see no reason to bale out. Even if things aren't exactly going great guns, this has been a very steady ship over the last few years with decent profits, cash flow and well-covered dividends.
I have a good yield to console me and I shall continue to dream of a bear squeeze.

[red_shed2000] 30/1/2017 15:47

Been looking for a buy in price for about 2 months...that RNS just gave me the kick I needed!!

GLA

[jaf1948] 30/1/2017 15:45

The £1bn figure is not from CLLN so finding a web page that mentions it does not make it true. On the second point, you can pick and choose your criteria to support any statement.

[rcturner2] 30/1/2017 15:39

you can find both articles quite easily via google

i posted a link to the first myself and IC pension deficit danger lists are also easy to find

[rcturner2] 30/1/2017 15:33

actually both statements are true

[jaf1948] 30/1/2017 14:59

It is perfectly real. As I said, one would also expect a fair amount of misinformation circulating about this share - such as 'there is an article which says pension deficit of £1bn' or 'CLLN have one of the biggest pension deficits relative to profits on the whole market'. Both are untrue - I wonder who posted those comments ?

[rcturner2] 30/1/2017 14:49

The yield of 8.4% here is so high it is unreal.