If I had $500M to spend, things will be a lot easier. I will spend $30M to buy up 70% of common and take over the company first (look at KBIO in the past two days). Then I will give SFY (or myself) $470M as secured. First all the board member and Terry. I will install several bond holder including you as the board member. Now everybody's interest is aligned and now you know how to spend that $470 to survive.
That would work only as of yesterday though before the poison pill.
With common at $0.4/sh, they need to issue 500 million to 1 billion shares. I don't think they have that much shares allowed to issue. Otherwise, common holder would be the biggest winner out of this fiasco.
If they can do it now, they should be able to close the deal 3 month ago. As a matter of fact, the current situation is much much worse and I don't think they can do a deal at $40 oil and $2.1 gas.
With only $78M liquidity and new increased interest payment of $83M each year, they will be in the same situation next year. Who would risk $500M for a 10% return? The $500M would be much better put into use as DIP. Under 11, $310 credit line will be senior note and $877M note will be common. You will end up with much more cash and liquidity and much less debt when injecting $500M then.
Finally it is coming.
I agree with all what you said. But I have a hard time going over the hurdle that these people are moron and absolutely stupid. (Well, I have been wrong so far). If we assume they are rational, does that mean they have something going on in the back? Maybe that is just my wishful thinking.
I think 60% chance we will be paid.
Do I read it correctly that banks are giving Terry several month to figure things out?
BTW, I think both Cmon and Crab deserve respect at this point.
What happens usually in the BK? The bondholder brings in new management? Who is the biggest bondholder and how much they are holding?
Cmon, it seems to me that management is playing hardball with bondholder at this point. The question now is who is going to blink first. Should not invest in a company where management is not investor-friendly. The BOD are all his friends and that is one of the biggest reasons we are here today.
Terry hates bondholder for sure. The liquidity is not a problem even at this point. He can easily pull in $350 Sr secured and buy back unsecured at discount on the market to reduce interest and total debt, just like SD, EXXI and HK did. Looks like everybody's brother is doing it. He is talking about the storm which is out of his control but he missed a lot of boat including hedging and second lien. It is totally his fault. He needs to go regardless BK or not BK.
We shall see in two days.
They are bunch of losers and won't land a deal. Looks like you will be wiped out completely.
It was a simple math he did, with bank facility gets paid in full and bond gets .85. Who taught your math? the PE teacher?
If they can issue second and do a private transaction with 17 paper, it would be great news. That is what EXCO did. Simply extending the runway is not going to cut.
If SFY did $650M deal, would that be negative or positive for the paper immediately?
What do you think of EXXI paper? They have liquidity and management seems to know the right things to do.