Interserve Share Discussion Threads

[general george] 21/3/2018 09:30

Yes Fenners,

Exactly, Emerald will end up with a big stake in the business when the D4E is done.
I expect Interserve will do well, when the debt issue is sorted, but shareholders will only own 5%-10% of the 'new' company after restructure.

I have recent experience of this, by buying distressed bonds in both GKP and IGAS, then selling the resulting equity in the market, I made some tidy profits.

I expect Emerald will do the same with IRV

[fenners66] 21/3/2018 09:24

aendjo - good post.

I think some of this board read "we support the management" and decided that it meant the equity structure would be unchanged ,

whilst others saw the debt holder meaning - we as a major shareholder in waiting will offer the management our support .

The implication for ordinary shareholders is not whether the business survives - but of how much of it they will own.

[general george] 21/3/2018 09:21

Where does it say the banking covenant test has been put back another 4 weeks?
I can't see that on an RNS.

Another white lie?

[general george] 21/3/2018 09:18

'Yes I think certain posters with ulterior motives have got in his head. No d4e whilesp < £2. Makes no sense'

You obviously don't know what a D4E is, or why one would be the only option.
If the share price recovered to £2, there would be no need, as IRV would have surely traded out of the problem, in order to recover to that extent.

I suggest you read Jaknife's posts again. D4E rarely leaves much for shareholders. Look at IGAS or GKP or recent D4E's.

Good luck

[tonysss13] 21/3/2018 09:16

JPMorgan Chase Cuts Interserve Stake Below 5%

[aendjo] 21/3/2018 09:14

Or you could say I’m rattled (‘cause I am indeed!).

[ih_127877] 21/3/2018 09:10

well cfc1, I can gladly supply proof, give me your email address and I will send you a screenshot! easy

[aendjo] 21/3/2018 09:09

Hi Obiwan, based on discounted cash flow, P/E and P/B I valued Interserve at ballpark 350m to 400m, or at current float a share price of 250p to 300p approximately. I follow the company very closely (news and Twitter, primarily) and see it continues to deliver effectively, often being praised by clients and customers (clearly there is the occasional complaint and negatives, but nothing really in comparison to the positives and relative to the size and diversity of its operations). I was of the opinion that the company was trading at a steep discount compared to the above estimate, as the market priced in the possibility of default. I didn’t think the company would fail - for many reasons. As Buffet says “be fearful when others are greedy and greedy when others are fearful”. So I bought a fairly sizeable position, and averaged down when Interserve became even more of a bargain. I did not expect Emerald to join in. Initially I interpreted their involvement as positive (and probably it will be, for the company) but I didn’t foresee that a hedge fund would want to take control of the equity, although thinking about it how else would they be allowed to work closely with the management? As a company in breach of covenants Interserve has a gun to their head and will have to concede some equity. It’s not in Emerald’s interest for Interserve to default, so management would have some negotiation power if Emerald’s proposal is ridiculous. As much as I would like CFC’s scenario to materialise, I listened to the cases put forward by JakNife and cc - a dilutive d4e swap seems like a very likely scenarion to me now. The amount of dilution (and results, clearly) will determine whether shareholders will be laughing or crying post RNS. What I’m saying is I’ve put my money here as an investment and it’s now turned into a bit of a gamble (not because of the intrinisic value of the company, but because there are ongoing negotiations that I am not invited to attend where it can be decided to take equity away from me - and I don’t know how to quantify the extent or the probability of that event). So I’m making my mind up. I think that at 1:4 dilution - based on the above - the company is fairly priced now. Less dilution would make me happy. More dilution would make me sad. I’m not sure what to do. I like this company and I want to be a long term investor here, but I am worried it’s going to be taken away from me.

[obiwoncanary] 21/3/2018 09:06

I suppose it is to be expected, we’re all a little nervous but the sudden change in sentiment is surprising. Enjoy the golf Cfc and catch up soon

[cfc1] 21/3/2018 09:01

OBI - Aendjo is rattled - he is holding a lot so not surprising as zero hour approaches. Will call you tomorrow PM as discussed.

Right time for a golf event! Perfect day for it too!

[cfc1] 21/3/2018 09:00

IH_.....YOU lost all credibility when claiming a trade (last week) after hours which was a 61Km UT!! Muppet...now that is a definite lie!!! the other day you claimed to have sold 41K (no record of it) now you are shorting so umm did you sell then buy back with no change in the price! LOL

[obiwoncanary] 21/3/2018 08:51

Yes I think certain posters with ulterior motives have got in his head. No d4e whilesp < £2. Makes no sense

[eodfire] 21/3/2018 08:48

Good luck - don't get burned.

[eodfire] 21/3/2018 08:47

Nothing has changed. But he seems to have been dwelling on his investment decisions. Possibly some extra seeds of doubt have crept into his mind. Or maybe they have been pushed in by a select few on various bb's?

[nonewsgoodnews] 21/3/2018 08:43

Test dates for the loan covenants agreements have been extended to the end of April, IRV to release end of year results and banking agreement together. Negotiations going well. D4e will not happen until share price is well above £2.00.

Good day people

[ih_127877] 21/3/2018 08:42

its right now at 73p, and I am going to short it for today only, expect a drop today. 40,000 shares short, wish me luck.

[obiwoncanary] 21/3/2018 08:41

Make your mind up aendjo. What’s changed in 4 days? Last week you were talking of £3!?!?

[aendjo] 21/3/2018 08:30

Thank you CFC, that would be a best case scenario but we must concede some facts: that McIntosh has bought 140m of debt (not equity) and that banks were willing to sell it at a steep discount. Banks selling debt at a discount doesn’t bother me too much - I could see why risk averse institutions would wish to reduce their exposure even if they thought there was a relatively remote chance of default (a scenario that the market indicated as possible or even likely - as reflected in share price). Now, I don’t think Interserve will go bankrupt. Some sort of deal will be agreed and apart from axed segments the company will continue to operate - and I think thrive. The fate of current shareholders is not so clear to me. Emerald acquired debt and look forward to “working closely” with the management. They will want a seat at the table. Either they secretly acquired stock through CFDs (but I think cc made a credible case against this conjecture) or they intend to acquire ownership by means of a d4e swap, which seems to me a very credible scenario. With shares trading at 1 P/Es, decent results and a dilution less than 1:4 would still make shareholders happy. I would be over the moon if the scenario you envisage is the correct one, but you will have to admit that a very good plan for the company might not necessarily be a plan that prioritizes the interests of shareholders. The Austrian alps are covered in dense mist, visibility is less than a couple of meters. This makes skiing less enjoyable and more dangerous - I constantly worry I’m going to crash into a Scottish hedge fund manager. I expect no sympathy. Good luck all.

[eodfire] 21/3/2018 08:17

It's the best case they have to talk the share down. Not selling mine. They can talk all they want about d4e at 10p... As you say, if /when it happens, it won't be for some time yet imo.

[cfc1] 21/3/2018 08:08

aendjo...how about lending simply extended and IRV will sell assets WHEN market conditions are right. I wouldnt listen to people on here...and quoting the IMF - LOL!!! they are the same idiots who said the UK would collapse (in 2008) when we didnt signup to the Euro!
IM off....enjoy your hols!

[general george] 21/3/2018 08:06

Morning Jaknife,

According to the FT, they state Lloyds and Barclays were amongst the banks selling the debt to Emerald for 50% of par. FT are usually quite accurate.

It's been reported Emerald snapped up £140m of the debt, and Emerald confirm that they are a lender on their website, so it all seems to dovetail together.

Either way, I expect news to be issued with regards for a D4E.

GG

[aendjo] 20/3/2018 22:57

I’m long still. Risk averse investors should steer clear. This is a company in a prime position to deliver great returns - it’s however overleveraged and debt holders might be able to force a cannibalistic dfe swap. It’s unfortunately a realistic scenario. I see a lot of value in the company and I think that at current price even a 1:4 dilution would be decent value. Good luck all. Results - the sooner the better.

[eodfire] 20/3/2018 21:18

"Emerald Investment can confirm it is a lender to Interserve plc. As evidenced by our track record, Emerald is a family office with a long term approach to investing. Interserve is a compelling business with a strong management team and clear strategy. We look forward to working closely with the company's management team and key stakeholders to support future growth in the business."