Premier Oil21 Discussion Threads

[stemis] 07/10/2020 12:42

Yes and they get a market listing out of it during a time when listing an oil stock must be a near impossibility.

[catsick] 07/10/2020 12:29

Yes its a fantastic deal for them , and no doubt there will be huge payouts for pmo management for signing off on the give away

[stemis] 07/10/2020 12:28

Basically Chrysaor is 'buying' Premier for nothing. Actually less than nothing. Creditors are paying Chrysaor $670m to take Premier (well, taking a $670m haircut) and then Chrysaor is handing about $200m of shares in itself to shareholders to sweet talk them into approving the deal. Not only that but creditors are going to convert $220m of their debt into shares.

[catsick] 07/10/2020 12:18

The creditors end up with 10% or 18% of the company depending on if they take up the cash offer its as clear as mud what you get,

[stemis] 07/10/2020 12:16

No creditors definitely won't be made whole.

The announcement is quite sneakily drafted. It states on average that Existing Creditors will receive 61c on the $ plus further cash or shares (depending on individual election). If an Existing Creditor elects for cash, then on average an Existing Creditor would receive 75c on the $.

Why is that sneaky. Two reasons

1. the use of on average. Total Creditors amount to $2.7b. In that is $400m letters of credit. They will be refinanced (i.e will receive full pay out). The rest will receive $1.23bn cash. $400m + $1.23bn = $1.63bn i.e. 60.3% of $2.7bn (disclosed as 61c on the $ - so some roundings). That's an average. However that means the non letter of credit creditors will receive $1.23bn out of $2.3bn ($2.7bn less $400m LOC) i.e. just 53c on the $.

2. Using the same calculation. If all creditors elect for the additional cash top up and there is a 75c on the $ average payout, it means the total payout on $2.7bn is around $2.025bn. Deducting the LOCs, means other creditors getting $1.625bn out of $2.3bn or 71c on the $. Funnily enough that's where the PMO1 price has ended up.

3. You might also notice another thing there. The difference between the $1.23bn and the $1.625bn is $395m. However the additional cash element is capped at $175m. So even if you elect for cash, you might end up with part cash/part shares. No doubt that's why it's called a 'partial cash alternative'. We don't even know how many shares that would comprise.

[catsick] 07/10/2020 12:15

Actually no i read it a but wrong its a horribly worded missive

[catsick] 07/10/2020 11:49

As I read it the retail bond holders get 75p plus some shares or 61p plus more shares , plus coupon up to the deal getting done , look ok to me so dipping my toe in ...

[steve73] 07/10/2020 09:42

As I understand it, none of the creditors will be made whole. 75% at best, 61% if taking some equity as well. There is $1.37bn cash earmarked for the $1.97Bn net debt (as at 30 June) which is 69.5%.
And my reading of the Bond notice on the website suggests that RB holders are last in line depending on how much equity the super senior creditors decide to take.
I no longer hold bonds so I didn't try to work it out in too much detail though, so I may have misunderstood.

[catsick] 07/10/2020 09:12

The question is , can the company stitch up the retail bond holders and force them to take a haircut or is there a way to agitate for being made whole ...

[holts] 06/10/2020 08:45

Teach me to keep reading , not that I have any now , thought I had missed out .

[gaspump] 06/10/2020 08:41

Not so sure now,

"The Premier Group's outstanding letters of credit of approximately US$400 million will also be refinanced. This, together with the US$1.23 billion cash payment, represents approximately 61 cents on the dollar recovery for Existing Creditors (on average across Existing Creditors). In addition, Existing Creditors will receive (i) new shares in the Combined Group and/or (ii) a cash alternative which is capped at a maximum of US$175 million (the "Partial Cash Alternative"). It is expected that Existing Creditors will be able to subscribe in cash at a pre agreed price for those new shares in the Combined Group which would have been issued to Existing Creditors if they had not elected to take the partial cash alternative (the "Top-Up Election")."

[holts] 06/10/2020 08:25

I read it as all paid up .

[cerrito] 06/10/2020 08:25

I am going on the basis that we will be paid out at 75pc approx as they will say - rightly in my view- that too much hassle to give us the partial cash alternative

[gaspump] 06/10/2020 08:24

....or does it just get rolled over?

[holts] 06/10/2020 08:22

First read I thought it was at par , but price reaction says otherwise .

[gaspump] 06/10/2020 08:20

I'm struggling to get my head around this! Does that mean we get paid out at par? Or at the current price?

[gaspump] 20/8/2020 08:21

So the question here guys, is do we see a risk of these bonds being converted to ordinary shares, IF they fail to raise the c£500m or so being targeted in the fundraising?

[bondholder] 17/8/2020 17:18

At 80p it values net debt at 1.6b USD. It is really a punt on the oil price. If it rises into the low 50's next year we should get back close to par. At current Wti/Brent new shale wells are mostly unviable so the declines on existing wells will drag output down. Over a hundred billion has been cut off global oil and gas capex this year alone - it has to show in output eventually.

[edwardt] 11/8/2020 18:17

So debt is off the charts, right?

[bondholder] 04/8/2020 18:27

c. $2.8 billion of debt facilities available, c. $40m is super senior, the remainder is senior and ranks parri passu. Note the $40m super senior is currently undrawn.

[stemis] 15/6/2020 19:32

Yes, received it today