Gran Tierra Energy Share Discussion Threads

[bozzy_s] 04/1/2011 08:34

The 7p must surely, surely, have been an unclosed 'buy' order from before the stupid 31-12 RNS.

[jwe] 04/1/2011 08:09

I confess i`m amazed by the lack of sell off.
bozzy-A debt for equity swap has to be easily the most likely senario,just a question of price.As i`m sure you know the share price tends to trend towards whatever that price maybe.Agreed this would give existing shareholders a fighting chance.Good luck with it

[bozzy_s] 04/1/2011 07:41

MMs marking these UP pre-market. 7p bid. 7.5p offer. Perhaps gdasinv has given his glasses to them as well!

Edit - very solid start. Expected these to be 6p mid-price on opening. Perhaps the MMs - who rarely get things wrong, have read things positively?

[bozzy_s] 04/1/2011 07:27

Well, another out-of-hours announcement! This one seems a basic one.

I'll put on my rose tinted specs (borrowed from gdasinv) and hope for D-bonds costing 20% pa to be repaid in full (that's a given). And the other bondholders to accept D-for-E swap at around 3 to 4p per share.

This would give a fighting chance to existing shareholders, and at least a 100% pay-back for debt-holders.

[gdasinv2] 03/1/2011 19:33

Let me clear my Position here....

1) The D-Note Situation was there before the Aviation Sales. So No surprise to the accounting.

2) GTE sold Aviation business purely to pay of D-Note, Which is done...and nothing to worry.

3) All existing shareholder will vote to pass the resolution for the above transaction, simple becuase this is favourable.

So all action has been taken by GTE to alleviate the situation, so I don't see any dilution or insolvency at all.

In other words if they would not have sold the aviation, then I could think "a Big Mistake", So I will buy more on dip tomorrow when others get nervous, to the simply fact that the whole Asset still worth around 60-70Millions $ anyway.

[knowing] 03/1/2011 11:26

Broken record.

[6kenny] 03/1/2011 11:12

Just spare a thought for those who steamed in here after the RNS on the 29th, tomorrow may well not be a very good start to the 2011 trading year for them!

[jwe] 03/1/2011 10:03

Just caught up with the post here and,it seems the quality of the posts has soared particularly from Yas and Empire.
My views have been already stated and are,perhaps a little more strongly put than Yas`s but i pretty well agree with his take on things
In particular i can see no other reason for the issue of the D notes than extreme(in relation to the company`s size) cash flow issues in the next few weeks,which given the ongoing cashburn(which was poor anyway)a turn for the worse and not known before the close of play on Friday,this cannot be viewed as anything but a big negative i feel.
Regarding insolvency whilst this is a very distinct possibilty i agree with Empire that by far the most likely outcome will be dilution.However,i feel that as the Loan Note holders hold all the cards this will come at a very heavy price.As a result i fully expect this to take a hammering at least in the short term
Regarding the timing of Friday`s RNS.Imo this was poor in the extreme given the announcement on the 29th and sucked a lot of people into buying this that perhaps did not reseach it as well as they should and in any event had no reason to assume further immediate funding was needed.The management have a lot to answer for in this regard imo.They may well argue that this was hinted at in the RNS on the 29th,nevertheless the full state of the company`s finances should have been announced at that time
Knowing=I am not short.My reason on here was i noted the RNS on the 29th and after 100% rise they still looked cheap at first glance so i decided to research it that night with the hope of buying in below 8.5p.After looking in particular at the last results and cash flow decided they should not be touched and started posting Thursday to that effect perhaps trying to get others to at least look through the accounts before they bought into a company,which imo,at that time MAY actually go bust.The RNS on 31st just confirmed my thoughts,although dilution is,IMO,a highly more likely senario
I will watch with interest

[6kenny] 03/1/2011 09:52

couldn't the loan note holders pick GTE up for a song and install their own team to run it if it were to go bust?

[yasx] 03/1/2011 00:24

ES,

Your comments are noted.

That is a fair assessment, though how things pan out from here can be interpreted in many ways depending on how one hopes matters proceed from here.

Your figures above do not include the $2million due in the next day or two from the Business Collaboration Agreement, and nor do they include (though I have not bothered to tally them up) the commitment fee realting to the D Loan notes.

Just looking at the figures, it again begs the question as to why they have decided at this stage to embrace the arrangement relating to the D Loan notes. What is the pressing immediate need for 'working capital' given that the BCA funds are due? Surely it would have been better to say pay off $10 million of the loan notes and retain the rest of the proceeds from the asset sale for working capital and convert the remaining loan notes into equity. It seems they are wasting valuable money on paying interest/commitment fees but have failed to explain the urgency that drove them to accept such an arrangment when they have indicated they intend to pay it back a month later. What will they do the following month? They really need to address the issue of cash burn.

I need to look into the current positions of the loan note and major equity holders to see who benefits under what circumstances. For instance, if there is a failure to complete the deal, and/or there is a default on the loan notes according to the new terms, then how would each fare? - this will probably determine the direction of things from here.

My views only.

[empirestate] 03/1/2011 00:01

here is my 2 bobs worth on the last RNS which i have just read, i am obviously a significant shareholder but prefer to give a balanced view based on facts rather than blurt from a long position stance.
The loan note holders are taking a pretty obvious stance in flexing their muscle, and rightly so, as they do actually own a significant majority of the company when combining share holdings and loan notes.Essentially the latest RNS has come by virtue of the loan note holders protecting their interest and ensuring the board take proactive measures to react efficiently to the current
aviation business sale process. Effectively the loan note holders are ensuring that they will get the lions share out of the sale proceeds to reduce their exposure which has spiralled over the last 6 months or so. So with usd23.9m outstanding in loan notes and usd14.8 million coming in from the sale proceeds, taking the usd5.75m D Loan that has to be repaid out of the maths GTE are left with usd9.05m cash against the usd18.125 original loan note outstandings. GTE will need to keep a reasonable cash balance to fund the operations so if they keep say usd5m, repay usd4m to loan holders and recapitalise the remaining usd14m the calculation needs to be done as to the effective dilution on the current capital level at the conversion rate on usd14m of loan notes. Insolvency i do not feel is a road that the loan note holders will let the company go down as the resale or recovery value of the business will be at a significant discount to an operating enterprise. Imo loan holders will take full control and place one of their own on the board then press for the sale of the company as their exit strategy. The reaction to the last RNS would never be positive especially considering the poor timing and the consequence of content will lead to a significant discount in the share price on tuesday,but by how much will be determined by where the market makers want to pitch themselves. Once again we are left in a position of uncertainty, which is certainly what the market doesn't like. looking further than tuesday morning onto end Jan, Mid Feb, i think an amicable solution will be arrived at along the above lines and hopefully the cost cutting initiatives and some growth in revenues will improve the operating performance in order that the business and its technology may appear more appealing to a potential buyer.

it's not all over till the fat lady sings. i just hope that the microphone doesn't start to work. am hanging in here personally as my own exit strategy is based on the eventual sale of the company.

[6kenny] 02/1/2011 23:50

yas,

Please post your comments after you speak with the company. I tried ringing Mr. Grant on his mobile on Friday but it went to the 02 messaging service.

Not sure if he is UK based (with his UK number diverting to the USA) or USA based?

[yasx] 02/1/2011 23:41

WillAlbertWin?,

Thank you for your comments. You say that the release dated the 31st contained no surprises. Well here is one surprise - why did they feel the need to agree to the D Loan notes,(the rates applied to these are at hefty to say the least). Given that a few million are due this week from the BCA, this suggests to me that not only do they need funds immediately, but given that these are due to be repaid in less than a month, it leaves me to conclude that they might be getting through this amount during that period. Quite what they propose to spend it on, I have no idea. You might argue that it will be set aside as a buffer for use later, but it makes me raise the point (as I did earlier) as to why they simply did not delay this matter until they had at least finalised the sale of the asset and conversion of previous loan notes into equity. I think it is worthwhile for holders to ring the board and request an explanation of this issue. At the very least, this seems to be at odds with their recent intention of reducing costs going forward.

You raise the issue of the 'strengthened' Board. Well, having looked at the set up, it seems to me they need to trim, rather than strengthen the Board. That would be one way of scaling back expenditure.

Shareholders have no option but to support the sale of the non-core division. Not to do so would be nothing short of lunacy. If the company agreed to cut back costs dramatically, converted loan notes into equity on terms not too detrimental to equity holders, potentially sold off something else (or perhaps the entire business), then shareholders might fare reasonably. If one were to use history as a guide, the Board might not approach matters in this way - they seem keen to spend a lot, deliver little and think that holders can be diluted forever. Personally I would prefer not to have the D loan notes, and see the proceeds from the asset sale partly used to offset the previous loan notes and look to other parts of the business that can be disposed of to pay off the balance and generate additional working capital. But then, common sense is not that common. Besides, I do not know what other divisions can be sold off whilst at the same time retaining the bulk of the revenue generators - I would need to take a closer look at the business units.

Until a few days ago I had never heard of GTE and thus might not be able to share your frustrations. But I shall give the Directors a call on Tuesday and see if I can glean anything useful - at the very least, I hope to get a response relating to the D loan notes.

These are my views only.

Regards.

[albertedwin] 02/1/2011 23:06

yasX - I have been a determined, and at times admittedly somewhat disallusioned, holder in GTE for a long time and yet still have confidence that Mr. Grant and his colleagues are eventually going to pull this Company round. This view was significantly endorsed by the RNS of the 29th December. Clearly there have been serious mistakes in the past, especially in the financial management, may be to some extent due to over exuberance by reason of the novelty and substantial initial demand for the Company's products, and the pressures of keeping up with events. However I do feel that lessons have now been learned and that the new Chairman and his strengthened Board should be supported in the forthcoming Resolutions. It seems to me that this is the only sensible way PIs are likely to get any meaningful return, albeit probably even longer deferred. The Board's proposals to apply the very attractive consideration being paid for the Aviation Division in the manner proposed in my view appears both reasonable and necessary to deal with the apparent critical overall and cash flow situation which now urgently seems to confront the Company. Personally I do not find any significant problems with the content of the latest Circular in the context of the RNS of the 29th December, although I agree that the timing could have been better since by issuing the latest RNS after the market closed quite understandably gave rise to a suspicion that something untoward might be afoot whereas the Circular appears to do no more than merely fill in the detail of the financial mechanics and procedural implications of the framework outlined in the initial RNS. The details of the terms of the Loan Notes were already well known to shareholders and the Circular does not appear to contain any great surprises as regards the consequences of the sale. Obviously it would seem to have been preferable, especially in the current supercharged atmosphere of the AIM market, had the contents of both RNSs been released as one, even if that meant a delay until after the New Year holiday; but perhaps the Company felt anxious to get the good news out about the sale at the earliest opportunity before there were any second thoughts from the intending purchasers and to satisy the anxieties of shareholders starved of news for so long. All this of course INMHO !

[minky65] 02/1/2011 22:09

Yas - nice balanced post.

[tullynessle] 02/1/2011 21:43

6K - you were quick!!!

Perhaps a bit too controversial.......

[6kenny] 02/1/2011 21:40

tully,

you will need to go to the AGM and ask those questions either publicly or collar them over a coffee...

[tullynessle] 02/1/2011 21:36

Yas - Excellent Post (2368)

[knowing] 02/1/2011 20:59

That's a new low you just reached kenny. Congratulations!

[6kenny] 02/1/2011 20:42

yas Seems to be the only one able to decipher the legalese contained within the RNS announcements and his posts are most welcome. He also does not resort to childish playground 'ad hominem' tactics but argues and presents his case from the facts.

Further dilution (wasn't 2p mentioned in the RNS?) hardly points to a 25-40p price as cited by myself and others. I hope to exit this unscathed if possible and put more funds in BAO and UEN!

[smicker] 02/1/2011 20:35

6kenny,
I was just fed up with your whingeing. I'll let it lie

[knowing] 02/1/2011 20:01

LOL it get's better!

[6kenny] 02/1/2011 19:55

good post yas,

very well reasoned, I have no response but will just wait and see what happens. I invested in GTE as a recovery play.

Suppose I am stressed when seeing terms like insolvency banded about in the most recent RNS.


Let's see how the market reacts on Tuesday...