Eddie Stobart Logistics Share Discussion Threads

[lpavlou] 21/11/2019 19:53

My quick reading of it is that they are giving the 49% shareholders the ability to lend a proportion of the 55m to the company at the high interest rate. The intention is to then undertake a rights issue to repay the PIK notes

[tomboyb] 20/11/2019 15:51

The Company has been informed by DBAY that, following discussion with the Company's Shareholders, DBAY intends to provide the Shareholders with the opportunity to participate in an economic interest of up to 49% of the PIK Facility

Provide the opportunity? -

I thought it was a given or is the equity worth zero -

[zangdook] 20/11/2019 15:49

They shouldn't be pushing ahead with the rubbish DBAY proposal before they've given full information to Wincanton. That's not right.

[albert3591] 16/11/2019 13:52

A lot of small hauliers from years back will be very happy if stobart fails.

[johne21] 16/11/2019 10:40

I hear eddie Stobart has just signed a extension on the Tesco contract till martch 2021 .Trust the management to have been operating this profitably for the last three years and the new price offered is to of benefit to all the shareholder not just one .Why not show wincanton the accounts and let them make a bid and then put them both to instituanal investors especialy woodford fund who has the deciding vote .or offer 57 million to him for his shares possibleT wincanton bid better for them.Talk is that db advisor might take this private again when he gets 51% share sound a bit like poundworld and recently Debenhams problem with mike ashley

[minerve 2] 16/11/2019 09:53

I would suspect some customers have already shifted business to reduce the impact leading up to Christmas.

If you look at the last set of accounts you can see that cash levels are low, working capital and receivables have grown at a seemingly (I didn't use my calculator) much faster percentage than revenue and debt has increased notably through its acquisition of TPN.

It seems to me that this is a company that has grown too fast whilst not keeping an eye on its cashflow. It is actually the case that many businesses actually fail coming out of recessions as against failing within them because of these very same issues: managing receivables/working capital.

I guess then it only takes someone to have the view the goodwill is impaired and that could tip things over.

I haven't looked but has any accounting guru here noticed whether they were capitalising startup costs on contracts?

[lpavlou] 16/11/2019 09:25

I wonder whether the 25 and 18 percent interest rates are due to the fact that they have no idea what the accounts look like and are taking a punt themselves. For the board to recommend accepting this without looking at other funding opportunities either means the company is really in trouble or they are going to get a piece of the action from the turnaround. Either way, they need to sort it before they start losing contracts and customers go elsewhere

[johne21] 15/11/2019 23:34

I like wincanton bid because it offers shareholders value for money and would let wincanton show eddie Stobart logistics where they can operate within their means ps I herd the loan was 18 percent what rate of interest is the other 200 million now on. will the bankers wind eddie Stobart logistics up after Christmas and liquidate them.Interesting times ahead Tesco needs them

[tomboyb] 15/11/2019 21:35

Eddie Stobart just weeks from collapse

Oliver Gill
15 NOVEMBER 2019 • 6:33PM
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Scandal-hit trucking firm Eddie Stobart Logistics has been forced to accept an emergency high-interest loan to avoid a collapse before Christmas that would put more than 6,500 jobs at risk.

The firm is taking a £55m loan from investment firm Dbay Advisors - with interest charged at an initial rate of 25pc. The deal will give Dbay a majority stake in the company, saddling existing shareholders with massive losses.

[lpavlou] 15/11/2019 20:57

The board are not acting in their shareholders best interest. It's ridiculous to take this long to publish the accounts and not to divulge the necessary info to WIN. As I've been saying, this is such a poor deal. The only winners are Dbay and the management who get to keep their jobs. I would favour a discounted rights issue and see if Dbay are prepared to put their hands in their pocket to avoid being diluted. STOB have cancelled their dividend and I would favour them using that cash to invest here.

[scburbs] 15/11/2019 20:54

Not hard to be more compelling than valuing 51% of the group at nil and including some loans at 25/18%!

[zangdook] 15/11/2019 16:03

WIN says:

Wincanton is confident that any potential proposal made by the Company to the Board of Eddie Stobart would be attractive to all of Wincanton and Eddie Stobart's stakeholders and that a combination of the two businesses would be more compelling to Eddie Stobart shareholders than the proposal announced by Eddie Stobart and DBAY Advisors Limited this morning (the "DBAY Proposal"). As such, Wincanton urges Eddie Stobart's shareholders to take no immediate action in relation to the DBAY Proposal, and requests that Eddie Stobart and its auditor prioritise the release of critical financial disclosure.

my emphasis

[vinceelliott] 15/11/2019 14:41

Good to see Wincanton has a further extension to the 27th November.

[johne21] 15/11/2019 12:39

Wincanton are a profitable distribution company with good values looking at their last set of results they will not take esl on if this underminds their strong business model whitch has been providing their shareholders a growing equity.Eddie Stobart has to demonstrate it has good cash management skills and is able to manage the debt (whitch has not been done in the past has the results stated)possibl investigation into accounts will show this .And operate within their budget as well

[zangdook] 15/11/2019 12:18

I agree re rights issue. They should get the accounts done, see what Wincanton offer, and if that doesn't get approval have a RI. Or propose an RI and see if Wincanton come up with something better.

[johne21] 15/11/2019 11:48

The 55 million might just provide the running costs of eddie Stobart till after Christmas does not sound a lot if debt was 157 million and now financial snowballed to 200 million what are the estimates for the second half with payment in kind in operation .Adminstration is the possible anserwer the bond market is very hard to convert debt to bonds in the present climate a lot of companys have tried this path recently metro bank ,Thomas cook, Sirius minerals , Debenhams are just a few examples.db advisors could be better waiting and by it debt free out of administration.

[nescio quid] 15/11/2019 11:21

If £55mln would save the company we could raise this with a rights issue at < 20p/share equivalent with no loss of ownership or interest to pay. This deal does not appear to make any sense.

[minerve 2] 15/11/2019 10:35

What a complete and utter f*ing mess.

Haven't looked at the accounts because I am not a shareholder but I would guess the accounts hide the usual suspects of increasing accruals, goodwill being carried at far greater figure than real fair value etc.. etc..

[vinceelliott] 15/11/2019 10:34

Proactive article has a photograph of what is probably a Stobart truck not an ESL truck.

[tomboyb] 15/11/2019 10:20

www.proactiveinvestors.co.uk/companies/news/907164/eddie-stobart-logistics-gets-into-bed-with-dbay-but-there-will-be-no-full-offer-for-the-company-907164.html

[zangdook] 15/11/2019 09:47

Agree with Vinceelliott. I don't see that the DBAY proposition provides a path to returning any value to ESL shareholders. Any profits from our 49% stake will be dwarfed by the interest - most likely the interest being added to the loan will soon make it unmanageable and DBAY will reluctantly have to take even more of the company via a debt-for-equity swap.

I'd rather take something from Wincanton, and put the loss down to experience.

The ESL board (hard to believe the CEO was only allowed onto the BoD yesterday) must now get the audit review finished and open the books for Wincanton or any other serious buyer out there.

[johne21] 15/11/2019 09:30

quick look at statement on bbc says eddie Stobart is still loosing money but at a greater rate than before could go into administration at any time looking at rns whitch could effect supplies to supermarkets run up to Christmas.No gurantee this is to be passed by shareholders.preasent management at eddie Stobart have already made those cuts you've just said wincanton provisional offer is better for share holders but not for the lost making contracts management already taken action to make loss making contract profitable.But by look of rns still loosing money.ps I am a shareholder in eddie Stobart somebody suggested they were a good investment but offset substantialy by other investments

[tomboyb] 15/11/2019 09:25

Which makes it worse -

51% for a loan -

[vinceelliott] 15/11/2019 09:22

DB have not paid anything to ESL. They have given ESL a loan at a penalistic interest rate.

ESL must give Wincanton the detailed information required to assess a bid. I have written to Wincanton this morning indicating I would support, albeit from a miniscule shareholding, such a request by them.

Editted correction: DB through one of the 'takeover' vehicles are paying £49 to ESL.