low forward PE? TLW enterprise value £2.32B Consensus Estimate net profit for 2025 is £238M so its a pe of about 10 , is that considered low? |
"how can they not pay ?"
Treble the number of shares in issue, the reason we trade on a low forward PE, and the reason RD is not sticking around. D4E swap. |
wshak "I’m now convinced they won’t pay out $500m to juniors whatever happens"
how can they not pay ? are they not due before shareholders ? |
XX
I would be sitting in the Moulon Rouge, thats must be why I dont understand bonds.
I would have an interest in things unfolding. |
Well if I was sitting in Paris in M&P's HQ I might be taking a passing interest at events unfolding here.
Why? M&P is 71.09% owned by Pertamina (the Indonesian NOC)
M&P net debt is currently around zero.
But if they need to raise money it's relatively cheap as benefit from Pertamina's balance sheet strength.
Typically between SOFR + 2% and SOFR + 5% for a take over situation as was case last year with Assala Gabon That deal didn't go through due to exercise of government pre-empt.
But taking on $1.4bn of debt refinanced by Pertamina + any acquisition cost might just be too much.
Seplat (20% owned by M&P) unlikely to be interested as too tied up absorbing MNPU Nigeria which has just gone through. |
There is strange situation with Tullow debt where the junior bonds mature a year earlier than the senior secured bonds.I'm now convinced they won't pay out $500m to juniors whatever happens. They have signalled too strongly that the seniors will have to restructure - maybe this director thinks that the 7s will achieve a better return in a debt for equity swap than 80c in the $? He has been buying the equity after all so we know he's a hopeful type. Restructure very soon is the only option that makes much sense. The Director is a non-exec who can't know the result of the court case.If they lose that, virtually impossible to call it the juniors.If they win, there's a chance but, even then, how can they pay out $500m whilst admitting they can't pay out on 1st Lien later?They've effectively said that already, when they state that maturities are uncovered in 2026.The only thing they can argue is that they are confident of a takeover if given extra time. |
Hi zingaro,I mentioned on my Twitter thread why I'd changed my mind."Key line in Stifel note (after meeting mgmt) caused me to switch my #TLW exposure."To repay TLW 3/25, the Board needs get comfortable with the refinancing options available to Tullow"Also didn't commit to meeting maturities in last RNS.When language changes, I take notice. |
There's also a $400m Glencore facility which has effectively been set aside to help pay off the 2025's but it comes at a price (SOFR +10%) which equates to about 14.5%
Also an undrawn (I think) $250m RCF facility that expires mid 2025.
That's a lot of gross debt. Although Net Debt (apparently} will "only" be $1.4bn at year end. |
zingaro
There are two bonds. Amounts currently outstanding, rates, and due dates are
2025's: $493m 7% 1/3/2025
2026's: $1,385m 10.25% 15/05/2024 Senior Secured
If the company went bust the Senior Secured would have priority over the 2025's.
Until recently the market had been assuming (i think) that TLW had the required liquidity to repay the 2025's sometime on/before the due date and having done that, they would have the ability to refinance the 2026's by issuing a new bond (maybe at an even higher rate of interest) and use that money to settle the 2026's. With the new bonds becoming due say in 2029.
The company appears to still have enough liquidity to pay off the 2025's.
The q is; what happens after that? Will they be able to refinance $1,385m of 2026 debt after that. Haven't a clue, but the bond prices at the moment seem to be suggesting the market is not 100% convinced.
A positive arbitration verdict may change the picture. |
Purchase of Tullow's 7.00% Senior Notes due 2025.
c)
Price and volume
Price $0.8049 (80.49%)
Volume 1,000,000 |
"Independent" Non-executive Director, Roald Goethe bought $804,900 worth of the 2025's yesterday at 80.49%. |
wshak - perhaps I've misunderstood/lack knowledge: the senior (1st lien) and junior bonds. Are they both variants of the 2025 bonds ? |
wshak - I thought that one of the reasons for going for the 2025 was that the payback was covered "They have already said that they have ability to pay them", and the return v. good. What changed so quickly ? |
Ah! Thx for letting us know Wshak. |
No idea tbh |
https://x.com/wshak1/status/1869740735291084842?s=46&t=q_jw7jJGzgD9vyGNfCfKjwI've swapped the junior debt I recently bought for senior debt |
The contract is for six firm wells, estimated to span 360 days, with total contract value of $171 million.After the first two wells, expected to be drilled in around 120 days, |
Previous rig rate was 253K/day. New day rate rate +87.7% |
Thx for the rig contract news FD. That's about $475K/day which is kind of double what they were paying before! But only 2 wells in 2025. As we know it's a good rig. Would have been nice if the company had told us about that. Why is it we tend to hear news from 3rd party sources rather than the company itself? |
hxxps://www.offshore-energy.biz/noble-drillship-gets-multi-well-drilling-job-in-africa/ |
https://www.sharesmagazine.co.uk/news/market/1734514371640674600/london-broker-ratings-barclays-and-jefferies-disagree-on-tullow-oil |
2024 Half year results
No uncovered near-term debt maturities
November Trading update 2024
Tullow has no uncovered debt maturities until May 2026 and is progressing a range of options to manage
debt maturities and optimise the Group’s capital structure.
abit confused too. |
no worries Alfiex, me too :) |
Thanks xxnjr I don't understand bonds LOL. |
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