Enq 23 �pik Tog Discussion Threads

[rob the slob] 03/1/2017 13:43

V quiet on this board! These bonds have risen in value by over 30% in value since the last post was made. Not surprising due to Successful reconstruction of terms of debt, kraken nearing completion and rising oil prices on OPEC and non-opec output reductions. Large single buy of 1m today - I see this as a signal for further rises in value over next few weeks/months as market's faith in company's finances continues to improve.

[hpcg] 01/11/2016 11:01

Pat - yes, that is what I think happens.

[p@] 01/11/2016 08:27

My view is that you will be paid 7 new bonds/100 ,every year,when the Oil price averages under $65.

[steve73] 31/10/2016 10:57

thanks lonrho..

[lonrho] 31/10/2016 09:15

I think you are basically correct but the 7% compounds therefore after one year you get 7% on 107p and therefore after five years you should get about 140p in your example. Bonds are trading flat and should include an increasing interest uplift.

[steve73] 31/10/2016 09:00

11% - you've changed your tune since your last post here....?

As an aside, I just tried buying/selling some of these bonds and note that they are no longer trading with interest accrued being added to the quote... I can only assume that the accrued interest is now being included with the market price. So from the last interest payment on 15th Aug, there is now 77 days at 7% nominal, or approx 1.5p uplift due to the "interest".

AIUI, so long as the Brent OP is above $65, then this interest will be paid; otherwise it will be capitalised and added to the maturity price, payable in 2022, unless delayed which was also proposed as part of the refinancing. If no interest payments are paid, this could result in a maturity value of 135p (i.e. 5 years at 7% per year being added).

Am I correct in my understanding here?

[steve73] 20/10/2016 11:35

Not good news for bondholders....

[antmel] 14/10/2016 14:51

Looks like a bad deal for note holders and good for shareholders. Turns the bond into a share like instrument with no voting rights.

[hpcg] 14/10/2016 12:58

As someone on the other side I can guarantee you that is the case. Any service you care to name the supplier will have bid near enough running cost - rates don't even cover depreciation.

[my retirement fund] 14/10/2016 12:51

That's what they would like you to think.

[hpcg] 14/10/2016 12:46

Cost cutting has come from squeezing the margin out of suppliers, who can pay less as there a skilled surplus rather than deficit, support boats come at cost, steel is much cheaper. None of these is cutting corners, they are genuinely less cash out for the same.

[my retirement fund] 14/10/2016 11:17

Thanks. I see there are a few of the bigwigs supporting the share price but expect once it's all done and dusted these will get forgotten and fall.However like you say oil could reach 65. The solvency here really hinges on reasonable oil price and a good volume of production from Kraken as soon as possible.One has to question the future reliability of that given the cost cutting. Cost cutting usually leads to corners being cut so sooner or later something is bound to go wrong.I think I'd be tempted at 40p though.

[hpcg] 14/10/2016 09:11

Either April 2022 or October 2023, depending on the whether the revolver is paid off by 2020.

[my retirement fund] 14/10/2016 08:31

Can anyone clarify what the maturity date for the bonds will be extended to?

[hpcg] 14/10/2016 07:42

Why is anyone invested in any indebted oiler if they don't see oil going above and sustaining 65 some time in the next couple of years? What companies need to do is survive until then. Assuming the proposals are voted through ENQ has wrung more money out of equity, and managed its debt cash situation and extended its term to repayment. These are all good for any investor in any class. If anyone held ENQ1, or most certainly ENQ, and didn't think oil was ever sustaining above 65 then their investment premise was mistaken in the first place.

[melody9999] 13/10/2016 19:16

I did have a few of these some time ago but sold out when the OP started retracing towards $40.

Seems to me that, unless OP above $65 for 6 months, no divi but interest capitalised.

Given the additional risk, cannot see why the share price has risen. Maybe the news was thought to be even worse.

Currently in CNE and IAE which is my main holding.

[11_percent] 13/10/2016 16:43

By steel watch on the ENQ bb.

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steelwatch13 Oct '16 - 15:12 - 2521 of 2525    0   0
11_percent - not exactly. As I read it, whilst BRENT remains below $65 bbl as below, interest would still be paid, but capitalised, i.e. added to the bond's value:

Proposed Note Amendments

Certain amendments to the High Yield Notes and the Retail Notes (the “Proposed Note Amendments”) are being proposed to, amongst other things:

add a condition to payment of interest in cash based on, amongst other things, the average prevailing oil price (dated Brent future (as published by Platts)) for the six month period immediately preceding the day which is one month prior to the relevant interest payment date being at least $65.00/bbl; otherwise interest payable is to be capitalised;

amend the maturity dates of the High Yield Notes and the Retail Notes to April 2022, with an option exercisable by the Company (at its absolute discretion) to extend the maturity date by one year and an automatic further extension of the maturity date to October 2023 if the Existing RCF is not fully repaid or refinanced by October 2020; and

amend certain of the financial indebtedness baskets under the High Yield Notes, remove the financial covenants under the Retail Notes, add new cross default provisions and restrict the Company from paying any dividend or distribution on any class of its shares until it has repaid or redeemed all capitalised interest (if any) accruing on the Notes in cash at par, together with any accrued but unpaid interest thereon.

The Proposed Note Amendments will be effected through an English scheme of arrangement (the “Scheme”), which must be approved by 50 per cent. in number and 75 per cent. in value of Scheme Creditors attending and voting at a meeting convened with the permission of the English Court to consider the Scheme (the “Scheme Meeting”). The High Yield Noteholders and the Retail Noteholders will form a single class of creditors for the purpose of voting on the Scheme and further information has been provided to each of them today with further detail on the proposed terms of, and significant dates in relation to, the Scheme. As noted above, all of the elements of the Restructuring are inter-conditional, meaning that the Scheme will not become effective unless each of the other elements of the Restructuring are approved and/or completed. In addition, the Scheme is subject to the Company obtaining recognition of the Scheme under chapter 15 of Title 11 of the United States Code.

High Yield Noteholders representing approximately 61 per cent. of the High Yield Notes have locked-up to support the Restructuring by entering into the Lock-up Agreement, pursuant to which they have agreed to, among other things, attend the Scheme Meeting in person or by proxy and to vote in favour of the Proposed Note Amendments. These High Yield Noteholders have also agreed not to take any enforcement action in relation to the interest payment due in respect of the High Yield Notes on 17 October 2016.

Due to the diverse nature of the holdings of the Retail Notes it was not possible for the Company to approach all Existing Retail Note Holders in advance, but the Restructuring proposal has been considered by a number of significant Existing Retail Noteholders approached by the Company on a confidential basis. The feedback from such Existing Retail Noteholders was positive and the sample indicated support for the Restructuring from professional investors.

[ianbrewster] 13/10/2016 16:10

As I understand it, missed payments will never be paid in cash, but holders will be issued with additional notes to the value of the missed payment. Presumably new notes will be valued at par, so 1 note for each £1 in missed interest.

[hpcg] 13/10/2016 14:19

Yes and no. Interest is still accruing, but will not be paid out in cash until the oil price criterion has been met.

[11_percent] 13/10/2016 14:01

Amm I right in saying that the interest payments on these bonds have been suspended.

[my retirement fund] 13/10/2016 12:41

Well these appear to have been struck off my watch list now and I must say i'm astonished these have not yet crashed through the floor.

I would have thought the chances of oil rising above $65 for a sustainable period and these paying out again would be fairly remote.

[hpcg] 13/10/2016 10:15

I am using this as an opportunity to slowly accumulate from anyone who has purchased for income. Any money from equity is good for debt, and the oil price is doing much better than expected. It did just drop into the 30s but I now think the year end exit point will be around 55. They have now, assuming it all passes, protected themselves through to Kraken first oil, against Opec failure or what is likely to be weak February pricing. Also a positive sign that the share price is above the raise price.

Overall macro risk remains, as with any long position.