Eating a $2B equity investment (plus KKR clients invested another $2B) in a pre-packaged bankruptcy giving senior creditors ownership of the company. Anyone have a handle on how much SSN debt KKR may hold? Might KKR be a motivated seller of Eagle Ford JV wells as a result?
Natural gas futures traded near a three-week high as forecasts showed above-normal temperatures that would stoke demand from power plants.
The weather may be hotter than usual in the eastern third of the U.S. through June 24, MDA Weather Services said. Gas deliveries to power plants through Tuesday were up 27 percent from a year earlier, according to LCI Energy Insight in El Paso, Texas. (Bloomberg, June 9)
Why didn't you sell what you bought in the $90's in the $100's or on the way back down in the $90's? Did recency bias lead you to believe the decline was temporary?
Keep in mind APA continued to sell assets without accounting for the proceeds while the value of retained assets could only keep pace with oil and gas prices, at best. APA is not the same company for which some shareholders paid $80 - $100 per share.
Don't you think that's enough, or are you trying to make up for the beating you took on SDRL?
Don't forget the "$450 million of new debt financing which will fully fund the remaining construction cost of the Hercules Highlander and provide additional liquidity to fund the Company's operations."
The current value of shares (close of pre-market trading) is 23 cents.
Proactive move, since cash flow presently makes servicing the $1.2B debt difficult, if not impossible, and HERO would indeed be bankrupt when the debt comes due over the next several years at the bottom of the cycle.
Secured debtors had a choice of accepting equity, tolling interest payments or collecting whatever HERO's aged fleet would bring at essentially a fire sale in a buyer's market. Either John Rynd is a smooth talker, has pictures of someone with a goat, or you're right.
Are you kidding? PACD is in the same boat (no pun intended) as HERO, except all of PACD's fleet is high spec versus HERO's scrap fleet.
Just read an article on the demise of GoFrac and thought of WLR's foray into the oil field services space.
The Ford family's fortune was in F shares. Don't get me wrong, I won't drive anything but an F-150 and bought those $2 shares, but major stakeholders and retail investors must have a common (no pun intended) interest to arrive at a mutually beneficial outcome.
Where do you get this "without debt"? The restructuring term sheet states:
"New capital raise of first lien debt with a maturity of 4.5 years and bearing interest at LIBOR plus 9.5% per annum (1.0% LIBOR Floor), payable in cash, issued at a price equal to 97% of the principal amount. The first lien debt would consist of $450 million for general corporate use and to finance the remaining construction cost of the Company's newbuild rig, the Hercules Highlander, and would be guaranteed by substantially all of the Company's U.S. domestic and international subsidiaries and secured by liens on substantially all of the Company's domestic and foreign assets. The first lien debt would include financial covenants and other terms and conditions."