It amazes me how everyone has jumped on this 99% dilution rumor.
The bond holders received collateralized bonds to replace the bonds they held.
Yes , they are only receiving 40 cents on the dollar , but that was the going rate for the bonds at that time.
Why give the bondholders and creditors replacement bonds and 99 % of the equity?
What have you then negotiated to save for the shareholders ?
One percent? I believe they can see as well as us that it might as well have been nothing, that the shareholders would have preferred administration. They would be sued .
If you believe that we will receive 1 percent you should definitly sell , I would .
I still stand my opinion that BGY has a huge asset value vs. debt .
Even 50/50 percent on dilution would be robbery.
My prediction 50 % dilution.
I am continuing to hold my shares.
Have a great day.
Hmm, I would think it could be (honestly) much more likly that it was more like... (BGY)"but that would leave the existing sharholders with 1 percent or less"...creditor s atterney "well, that may be true but, thats 1 percent more than they would get in administration" BGY "so you want me to walk out that door and tell them their shares are hardly worth anything" attorney..."we would not be opposed if you offered them warrants, this would allow them to move back in if the company proves to be profitable"...BGY....Hmm...Hmm...attorney "it would seem to in the best intrest of everyone as the company will at least still be whole...frankly BGY, the way we see it you have no choice"..."the warrant terms will have to be approved by us (creditors) of course as it could effect the new share equity through new dilution should the be exercised"..."and everything possible should be done to buy back shares to minimise the damage to the existing sharholders and avoid lawsuits that could endanger our deal"..."ok"...........BGY "allright". (the BGY guys keep thier jobs)
Fantasy...or is this possible? It could be someone knows something good is about to happen to BGY. Gamblers...take your seats...again.
Neil I see what you're saying.
But, My points have been recently are:
These bonds have been resold just as the stock has .
Many of the bond holders are in at a valuation much lower than 100%.
Many are in at the 40% valuation.
These bondholders are more than happy.
They will receive Collateralized bonds equal to what they had AND Receive 50 % equity .
That is a GREAT DEAL !!
Some bondholders will lose out , just as a long time stockholder will loose out.
I believe in these situations that the middle ground is where the best consension is found.
With multiple blameless parties ,the safest legal ground is the middle ground.
There will be losers.
The winners IMO will be the ones who purchased bonds at 40 cents on the dollar and those who purchased stock below ( you fill in your amount) a dollar.
Why? because that is the middle ground.
These two groups may be big winners.
But, most likely they wil try to slice the pie into as many pieces as possible.
that is why I say a 50% dilution.
good luck to longs.!
disclosure: I am a stockholder.
No, I'm not saying the company is trying to give the bondholders 100% on their bonds. And they're not trying to restore the value to what it was before the govt. destroyed the British power market.
What they are trying to do is survive and to do that they have to keep bondholders happy. Giving them most of the shares in the new company is one of the ways they'll keep bondholders happy. BGY will give the bondholders the shares and restructure their debt in the process and thus continue operations. The new company will trade based upon whatever the market thinks it is worth. Both the bondholders and shareholders will benefit as the market values the new BGY at a higher level than today. The only difference is the bonholders will own 99% or 95% or 90% of the new company and shareholders will own 1% or 5% or 10% of the new company. Both will benefit from the restructuring and the newly valued BGY.
Well, that was what paper reported the bondholder said. And either the bondholder pulled that number out of the air...or he was just repeating what he heard at the meeting. So perhaps that is neither here nor there. But what concerns me more is that after the meeting (where they were hoping to get at least 10% for us) the BGY spokes guy said, "as the existing shareholders value is little or none we are considering offering warrants and this will be discussed at the next meeting" To me this would seem to add weight to the bondholders comment. Also, if the dilution was only five percent or better I beleive BGY would not have brought up the issue of warrants as that was expected. But...shareprices...should have dropped to a much lower level fast...and they didn`t. Leaves me scratching my head and holding out hope. But I wonder.
They have to give the bondholders something to sweeten the deal. Thus, the 99% dilution comes into play. I wouldn't be at all surprised if 99% dilution actually occcurs. There is NOTHING stopping the company from making such a severe dilution.
If 50% dilution is announced, BGY will be at $2.00 in no time flat.
There is nothing written in concrete yet.
Bondholders and shareholders should be banding together and not fighting one another...
Why should Labour get 65% of the future earnings of BGY? Why? Decommissioning costs and fuel storage costs should be bourne by the general taxpaper because nuclear is not using up fossil fuels and it helps the country become more energy independent. That is a socio-economic good that should be bourne by the taxpayer at large, AS IS THE CASE IN EVERY OTHER DEMOCRATIC COUNTRY USING NUCLEAR.
Bondholders and shareholders should be uniting against the lies, deceptions, and greed of the Labour Govt. which has RENIGED ON THE TERMS LAID OUT IN THE INTITIAL PROVITISATION PROSPECTUS OF 1996.
TO BE FURTHER ABUSED BY THE LABOUR GOVT. BOTH SHAREHOLDERS AND BONDHOLDERS SHOULD BE DEMANDING JUSTICE AND TELLING THE BRITISH GOVT. THAT WE WILL SEE IT IN COURT!!!!!!!
I have read countless messages...I had to findly log in and state that I agree with you completely that 1% is worse then administration and a total sell off. I have held throughout all this. Maybe not 50% but I can't see much lower then where the Bonds settled. Question is 50, 40, 30 or 1% of what? If you look back a year the price was $15/sh. All take 10% at this point and be happy. No matter what is decided, the re-org has to leave them in a position to make money. Which is also positive. I feel the day traders get so greedy they can't see the forest for the trees.
Your question about what dilution is relative to is irrelevent.
Dilution is not relative to some trading price. It's relative to the shares held. The stock will obviously trade at higher level after the financial reorg is complete and the company is returned to good financial health. The question is? How many shares will you be holding at that point? 1% of what you're holding today. 5%, 10%??? 50%? Nobody knows?