Hibu Share Discussion Threads

[freddie ferret] 08/10/2013 16:33

That's better.

[freddie ferret] 07/10/2013 17:29

There have now been quite a few articles in the Telegraph and in other broadsheets too, the jist of these articles is that while it is too early to be certain it looks like the case that the economy is starting to boom again. There is talk that when the figures for the last, this, and the next quarter come through GDP growth maybe over 1% a quarter which would put it at the highest for fifteen years. Certainly at the moment IMHO things look patchy but house prices in the SE seem to have either moved (West Kensington) or are on the move. Osbourne is further boosting things by bringing forward his help scheme for first time buyers.

So what of it, well HIBU are dependent on advertising revenue which is very, very economy and expectations dependent. Basically advertising is a discretionary expenditure for business, when things look like they are going to get tight the Yellow pages space salesman gets told to go away. However when the economy starts to boom sales of advertising will start to rebound.

I am not saying that there has not been some contraction in the directories revenues but rather that only part of this is represented by the move to digital. A lot of the loss of advertising sales in the directories business has been as a result of the RECCESSION IMHO.

[freddie ferret] 07/10/2013 17:14

I would comment to some of the recent posts above that many currently in HIBU now and in the HSG have substantial portfolios. I am overweight in HIBU but deliberately so.

[themoocha] 07/10/2013 13:05

13MATT13 and Chocbroon-

We are also dealing with a firm of solicitors who have a well established and respected practice so I do not tend to agree with your assumptions that we are just handing money over to anyone who asks for it.

I have seen the work that is being done behind the scenes and through various correspondence with nominee accounts, the BoD at Hibu and political representations. All good stuff I have to say. Having been in a similar position before with a company I once owned I can honestly say I am pleased with what HSG have achieved to date and for the future.

I am sure you wish us well in our endeavours and thank you for your support.

[risk1] 07/10/2013 12:27

tbo most have lost so much a couple of hundred is worth it

[13matt13] 07/10/2013 07:58

Actually, it is you lot that should not be in shares no wonder there are companies like hibu & HSG that ask for your money & you give it to them without very little knowledge about them, hibu at least are in the public domain you know their names.

What do you know about HSG & its bod of directors? you know about as much them as you know about me. Can you please send me a couple of hundred quid by post please I am setting up a fighting fund to fight for the right to ask questions.

[knigel] 06/10/2013 18:27

Don't be so stupid... 99.9% of the HSG lost all their investment money in Hibu and just want some of it back!

[chocbrown] 06/10/2013 18:12

Is HSG just another financial scam HIBU took their money but at least you know the names of the BOD of hibu who stole your money.
Who are the BOD of HSG & what are the names of this BOD.
What are the names of the 10 directors of HSG they are trying to get installed as directors of hibu?

Does anybody know anything about these people? Some born everyday, I bet hibu are laughing all the way to the bank.

I bet HSG BOD are also laughing a little way to their bank

[old fool2] 06/10/2013 09:47

The link which works is here:

[yachtie8078] 06/10/2013 08:18

This makes VERY interesting reading!

If you hold hibu and are not a member of the HSG then join right now!

[freddie ferret] 04/10/2013 16:45

themoocha.

Have PMd you, hope you got it OK????

[themoocha] 04/10/2013 13:49

Jamrol,

See the action group website for details, provided you have joined it of course. I think we are following the line that a high degree of information is being kept away form this type of BB.

The letter released last week was a real scorcher.

TM

[jamrol] 04/10/2013 13:19

can someone clarify what would be the 'best' result from an EGM?

I'm thinking the directors will bat away any demands or votes?

on a final note, nice to see HIBU adds on the London Underground this week!!! 8(

[freddie ferret] 04/10/2013 12:48

themoocha.

On the debt front, my first comment is that at least one member of the board has bought some of it (£1,000,000 worth at PAR for £200,000 as I understand it) so it is possible to buy. The question is how and where? I have had a good look round my brokers site and though they offer gilt and corporate bonds (about 300 in total) there is no sign of HIBU/YELL however they only sell good quality stuff lowest being around 80% of PAR (the mkt price will vary according to risk and yield of course), so no luck there.
The advantage to purchasing some of this junk (far from it low price means cheap but risky) would be that one should get letters and documentation from the company trying to get the holder to become part of the 75% the mgmt need to support its restructuring. I suspect the company is having to tell the debt holders/lenders/creditors a hell of a lot more than they are telling shareholders. Basically the management are trying to sell the equity to the debt holders as such they will have to convince them of the viability of the business going forward as well as its ability to service the reduced level of debt going forward. I suspect that this will entail the the mgmt providing the creditors with detailed discounted cash flows and internal rate of return projections based on internal accounts. I hope you understand my interest in becoming a debt holder.

At the start of your post you state.

"Taking a look through hibu's latest accounts for y/e 31-Mar-2012. I see that the auditors have reported an "Emphasis of matter – Going concern" that "There is a risk that the Group may breach the financial covenants with its lenders." Under a breach, creditors would be able demand immediate repayment."

This should be viewed as a routine warning by the auditors IMHO, as we now know, far later the company chose to go into default with its 2009 loan servicing on the basis of not putting one class of creditor at a disadvantage compared with another, so they said. As I have already explained the outcomes for the 2006 tranche holders and the 2009 tranche holders are completely different anyway. So that excuse is very thin at least and smacks of another ulterior motive in going into default.



"This decision impacts only the lenders under the aforementioned facilities agreements and in no way impacts payments to our employees, partners, suppliers, trade or other creditors or any other counterparty. The Group retains healthy cash balances and therefore the decision is not driven by liquidity considerations, but rather a desire to ensure fair and equitable treatment of all financial lenders consistent with the overall balance sheet restructuring that is anticipated.
This is an important step in the restructuring process which began earlier this year. The Group, working together with the CoCom, aims to present a restructuring proposal to its lenders by the end of January 2013 and to complete a successful restructuring of its debt obligations before the end of the first half of calendar 2013.
As previously stated, a number of capital structure options are being considered. The Group can confirm that the options being considered are likely to result in little or no value being attributed to the Group's ordinary shares."




"As previously announced, the decision not to make payment to the Group's lenders under the aforementioned facilities agreements has no impact on payments to our employees, partners, suppliers, trade or other creditors or any other counterparty. The Group retains healthy cash balances and therefore the decision is not driven by liquidity considerations, but rather a desire to ensure fair and equitable treatment of all financial lenders consistent with the anticipated balance sheet restructuring."



Restructuring update
On 25 October 2012, hibu announced it had decided to suspend all further payments of principal and interest to the Group's lenders until such time as a restructuring of its balance sheet can be concluded.
The Group has been in negotiations with the external lenders under its 2006 facilities agreement under which there is approximately GBP65m outstanding. These negotiations have now been concluded and hibu is pleased to announce that it has reached agreement on the terms of a settlement of the 2006 debt claim. Under this settlement, the external 2006 lenders will receive a payment in cash equal to 39 per cent of the total amount outstanding to them under the 2006 facilities agreement. This payment, which is expected to be made on 11 December 2012, will be in full and final settlement of all their claims under the 2006 facilities agreement. The settlement with these 2006 lenders is an important step in the restructuring process.
The Group has previously announced that it is seeking an extension to a number of waivers under the 2009 facilities agreement so that the restructuring discussions on the remaining GBP2.185bn of debt can proceed as effectively as possible. hibu and the Co-ordinating Committee of lenders under the 2009 facilities agreement (the "CoCom") have reached agreement on an overall timetable and next steps and, in particular, have agreed to move forward as quickly as possible to agree terms for a financial restructuring. The Group is aiming to agree terms with the CoCom during January 2013 and launch the restructuring process shortly thereafter. Accordingly, the Group would like to encourage lenders under the 2009 facilities agreement to give their consent to the waiver request published on 22 November 2012. The deadline to vote on this request is 14 December 2012. The CoCom has unanimously agreed to support the waiver request.
As previously stated, a number of capital structure options are being considered. The Group can confirm that the options being considered are likely to result in little or no value being attributed to the Group's ordinary shares.




"During the first half, the Group has continued to make significant progress on its four year strategy to build a material new digital business. In June we acquired Moonfruit, an innovative digital company, in order to provide new web site products early next year. Following successful pilots in the US, we began to expand our community magazine (formerly Newsletter) initiative, which is now delivering new orders in excess of GBP500k per week and rising. We signed partnership agreements with Vantiv in the US and Global Payments in the UK, to support our new Payments product which went to pilot in both markets in early September. We also moved into pilot with our new on-line channel, which will provide a modern, lower cost alternative route to market for our products from early 2013 and we began the first pilots of eMarketplace in Oxford and Chicago.
We have also been working hard to sustain our directories business in the face of very difficult market trends that have not improved. Our supply chain and product offers have been further enhanced, driving for example higher consumer use of our online directory products outside the US. The Group also continues to focus on cost management and over the last 18 months has reduced costs by in excess of GBP200m, independent of the decline in revenue.
In May we announced that the Group had begun the process of putting in place a new capital structure. This is a complicated exercise that will take some months as we ensure that the interests of all of our stakeholders are properly addressed. I remain confident however that the Group will emerge from that process with a much stronger balance sheet that is appropriate to our future business."

"INTERESTS OF ALL OUR STAKEHOLDERS"!!!!!!!!




"The Group continues to make significant progress in executing its digital strategy and preparing for a capital restructure. Digital services revenue is now at an annual run rate of GBP180m and continues to grow, up 31% on the prior year reflecting the digital expertise that we are now able to offer our local businesses. Total digital revenue is now 36% of revenue, equivalent to a run rate of over GBP450m per annum.

"Our new strategic products are progressing well from development to market readiness. Community magazines are being sold into more than 600 markets and generating orders of more than half a million pounds a week. Pilots are well underway for a range of new digital products and services to support business owners in promoting, commercialising and running their ventures. These will help them accept card payments, offer loyalty programmes and benefit from affinity schemes as well as better connect with their consumers. Further launches are expected over the coming months.

"In the quarter, we reached a settlement with the remaining 2006 lenders resulting in a GBP39m pre-tax gain, which together with our cash generation, reduced net debt by GBP83m to just over GBP2 billion. We continued constructive discussions with lenders and hope to reach agreement on a new capital structure for the Group in the near future.

There remains a risk that the Group will not be successful in negotiating a capital restructuring with its 2009 lenders. However, the Group is cash generative and the directors believe that the 2009 lenders will receive a higher recovery on their loans by letting the business continue to operate as a going concern rather than by any other course of action. The Board therefore concluded that adoption of the going concern basis in preparing the financial information contained herein is appropriate. Nevertheless, the directors are making full disclosure to indicate the existence of a material uncertainty in regard to the Group's ability to continue as a going concern. The financial information does not include the adjustments that would result if the Group was unable to continue as a going concern.

There remains a risk that the Group will not be successful in negotiating a capital restructuring with its 2009 lenders. However, the Group is cash generative and the directors believe that the 2009 lenders will receive a higher recovery on their loans by letting the business continue to operate as a going concern rather than by any other course of action. The Board therefore concluded that adoption of the going concern basis in preparing the financial information contained herein is appropriate. Nevertheless, the directors are making full disclosure to indicate the existence of a material uncertainty in regard to the Group's ability to continue as a going concern. The financial information does not include the adjustments that would result if the Group was unable to continue as a going concern.




The majority of hibu's debt matures in April 2014. The Group has been in negotiations with a Co-ordinating Committee of the lenders (the "CoCom") under its facilities agreement dated 30 November 2009 (as amended) (the "2009 Facilities Agreement") to represent the interests of the 2009 lenders (the "2009 Lenders") during the process of determining an appropriate new capital structure. The Group obtained certain waivers with, CoCom support, from the 2009 Lenders to enable, among other things, substantive discussions to take place around a balance sheet restructuring.

The Group is currently in default under the 2009 Facilities Agreement. The 2009 Lenders' facility agent may, and must if directed by two-thirds of 2009 Lenders, demand immediate repayment of all amounts due. The default can only be waived by the unanimous approval of all 2009 Lenders. As this is not considered likely in the current circumstances, a waiver request for this default is not being made. Notwithstanding this, the Group remains in active and constructive dialogue with the CoCom.

......................................................................................
......................................................................................

HIBUs DEBT OR THE MAJORITY OF IT MATURES IN APRIL 2014 WHAT HAPPENS IF THEY DO NOT REPAY IT AND NONE OF THE CREDITORS DEMAND IT BACK PENDING FURTHER NEGOTIATIONS????????

It seems to be the case that the HSG could in principle enter into legal action against the company or its creditors even if the company defaults on repaying the 2009 creditors in April 2014. This must surely be concentrating the minds of both management and creditors alike.

IMHO there is only one option for the management and that is to come to terms with the shareholders and the HSG by negotiation. As the days go by the HSG gets stronger. As the days go by the companies digital business also strengthens, the growth in the internet business will at some point exceed the contraction in print, and revenues and profit will grow strongly IMHO.






TO BE CONTINUED

[freddie ferret] 03/10/2013 17:44

themoocha.


Sorry I will comment in detail on your post tomorrow, all I will say now is that it is way too pessimistic for me. There are many many angles. The new businesses should be growing very fast since they are starting from zero.

[themoocha] 03/10/2013 09:23

Freddie - Just for you

Taking a look through hibu's latest accounts for y/e 31-Mar-2012. I see that the auditors have reported an "Emphasis of matter – Going concern" that "There is a risk that the Group may breach the financial covenants with its lenders." Under a breach, creditors would be able demand immediate repayment.

There are some interesting comments in note 16 on "Risk management" on page 85 which details the cash and debt cover ratios.

Note 19 on page 94 lists out loans, other borrowings and net debt. "The Group's financing facilities primarily comprise a series of term notes in pounds sterling, euros and US dollars". About half of it is in USD, and the rest split evenly between GPB and EUR.

It doesn't look like the debt is tradeable, but is a bank loan, which is a pity, because the debt is almost certainly worth something, as far as I can see. Hibu lists the total loans and borrowings as 2335m GBP. In its latest finals, it reported 507, GBP in operating cash flows (assuming it's not jiggling that figures). Taxation doesn't amount to much, which might suggest that the company's profits aren't real. Interest payments would be largely irrelevant under a D4E swap. It's interesting, because I would ask myself if I had 2335m, would I like to get my hands on 507m of annual cashflow? The answer is "yes" – that'd be a good deal. Now, Hibu is having trading problems at the moment, so the cashflows are very likely to reduce in the future.

It's a very very interesting story, and unfortunately I have no experience of this to know how it is going to work out. Perhaps some informed reader can explain the likely scenarios. Do the banks want a breach (given my argument about access to cashflow), are they likely to be selling off the debts to specialist debt investors, and are the banks quite cute when it comes to negotiating such a trade? The chances are that I will never get to find out the answer.

I had previously said that at an EV/EBITDA of 13 was way too high a valuation for the company. OTOH, if you assumed a D4E in which current equity is wiped out, then maybe you could get a free-cashflow-yield of 10% fairly comfortably, which is actually quite reasonable. Where am I getting 10% from? Well, net debt is 2200m. So I'm implying a free cashflow of 220m. In the latest reported results, there's operating cashflow of 507m. Lop off 0 for interest as opposed to the reported 135m last year, because interest payments will disappear under D4E, assume corporation taxes of 122m (24%) and capex of 60m. That would give freecashflow of 325m. That cashflow will likely deteriorate, of course, but that's quite a way above the 220m. Under this scenario, it's not even clear that debtors would expect a haircut.

Interesting.

Anyone with any clear insights on this?

[freddie ferret] 02/10/2013 16:36

From Rainmakers discount brokers thread.
A bit garbled.




NOTE THAT IF YOU HAVE A PROBLEM WITH THE TREATMENT AT THE HANDS OF A BROKER THEN YOU NEED TO IMMEDIATELY COMPLAIN TO A DIRECTOR THEN THE COMPANY'S COMPLIANCE OFFICER IF YOU GET NO SATISFACTION WITH THE COMPANY-PLEASE DON'T DELAY. SORRY TO SHOUT BUT I FEEL THIS IS VERY IMPORTANT INFORMATION THAT MOST INVESTORS ARE UNAWARE OF.A COMPLIANCE OFFICER IS PAID FOR BY THE COMPANY BUT LOOKS AFTER THE INTERESTS OF THE PRIVATE OR CORPORATE INVESTOR AND IS THERE TO MAKE SURE THE BROKER COMPLIES WITH FSA RULES AND TO ENSURE THAT INVESTORS ARE TREATED FAIRLY. IF HE AGREES WITH YOU,THE COMPLIANCE OFFICER CAN FORCE THE COMPANY TO COMPLY WITH YOUR WISHES.

[freddie ferret] 02/10/2013 16:27

For me the smoking gun, the evidence that went beyond a sign of incompetance was that of the company going into default on the loan servicing. Up to that point I was willing to give it the benefit of the doubt. The reason the company gave for going into default on the 2009 debt servicing was that of not disadvantaging one class of creditor over another. Really, pull the other one, they were in the process of paying off the 2006 debt at 38% (? from memory) of PAR and are now intending that the 2009 creditors should get ownership of the company, all be it with a haircut involved. IMHO on the mgmts intended plan the 2009 creditors will have been treated vastly better than the 2006. So the excuse of treating all creditors similarly is crearly incorrect.

There was clearly another reason for the company to go into default on loan servicing. My belief is that it was done to contrive a situation where the current reconstruction would look legitimate, this is only my view and I do not speak for anyone else on this.

[freddie ferret] 02/10/2013 16:12

The PAR value of the debt is around £2bln, some purchasers of this debt purchased it at around an 80% discount as I understand it (more clarification on this is required IMHO).

Now the creditors are as I understand it being asked to take an £800m hair cut but if they bought at 20% of PAR that still leaves them well in profit. Pleanty
of money left over for a payout to shareholders.

There are two markets, one for the debt and one for the equity (shares) now suspended. Consideration of the antics of Lunar Flyer, BK, and Ace over on iii should take this into account IMHO. They may be interested in the debt market, therefore why trash the HSG? The HSG stops the creditors from getting clean control. I think LF, BK and Ace are related to interests that were or still are in the debt market.

[freddie ferret] 02/10/2013 14:16

Re my post 111 above.

We know that trading volumes in the final weeks before suspension were high particularly if we take into account ISDX trades.
We know that in the last few weeks the price was low and fell further.
From this we can conclude that there are quite a few people out there that hold largish or very large numbers of HIBU shares that have been purchased sub 0.4p.

The vast majority of shareholders are probably historical holders with small holdings of shares that they bought at a highish price.

There is likely to be a degree of goal in-congruence between these two classes of holders when it comes down to accepting an offer from the company or not.

Somebody who paid 0.4p is different from the person that paid 4p or 40p a share.

..........................................................

The next question but related to the above is that of tax.

If the payout is compensation then it will not incur CGT as I understand it.

If the payout is a purchase of the shares then CGT might be payable if a gain is made as I understand it.

If the shares are held in an ISA and the company purchases the shares then the payout will go directly back into the ISA as I understand it.

If a payout is made to the ISA holder then he may be able to get the money back into the ISA but this needs further clarification IMHO. Certainly my ISA provider has indicated that if money is paid out relating to a stock in the ISA then in principle that money should go back into the ISA. However this would not be a normal situation, and documentary evidence would need to be watertight.

It seems there is little likelihood of a payout going to the HSG in the first instance to be split up amongst holders as I understand it.

....................................................


I think all will now see that the question of what is acceptable to shareholders in terms of size of payout is not simple, nor are considerations of tax. Some holders will be happy just to see a proportion of their initial investment back, for others any payout is likely to put them in profit and potentially into tax complexities.


I should add I am not a tax expert and suggest anybody with questions of this sort should contact their accountant if they have one.

If anybody contacts the HMCR I suggest they first think through their questions very carefully since once the tax man has made a decision wrt one inquiry he will have to stick with it for reasons of continuity. Therefore frame the questions correctly.

[hvs] 01/10/2013 18:33

Hee Hee Heee Booo Booo

[freddie ferret] 01/10/2013 17:35

In case anyone had not noticed we are now into October. No delisting, EGM or negotiations on the way IMHO.

EDIT missed out the comma earlier. It now reads as I intended.

[freddie ferret] 01/10/2013 17:27

Perhaps the most powerfull bit of the site.

[freddie ferret] 01/10/2013 16:06

Every grouping, club and association has its minor tiffs and squabbles.
I would comment that many people that posted fairly frequently on the forum when it started have gone very quiet of late.
A lot of the problem is site layout basically anyone can start a new thread and with the exception of me seems to have done. The result of this is you get a lot of threads on the same topic running in parallel. This makes the site a pain. When you log in yes you can look at a page that gives all the threads that have had recent posts but if you log out this page refreshes. When I was using the site it was in the habit of logging out spontaneously. As I said a bit of a pain.