Hyundai Merchant Marine (HMM) has said that the signing of a voluntary agreement with Korea Development Bank and other creditor banks shows that the latter is prepared to support the company's efforts to normalise its operations.
In addition, the company's discussions with its tonnage providers to lower charter rates are progressing well, and HMM looks forward to normalised operations by the second half of this year.
To the moon, Alice.
I anybody is stupid enough to short this considering tankers, and otherwise low exposure...they should cover, and tell mommy that they still need the basement room for another year...
The distribution of 30% might actually be safe, and the SPmay multiply...unbelievable if true...time will tell,as it always does...then you die...in this case, you may die rich.
I am a newbie here,and have enjoyed reading the posts.
In retail, there seems to be several groups interested in cplp....
There is a group underwater investors hoping for the best with this shelf...that group includes a subgroup of divi investors who really lost their butt$ this last year or two....they are the ones the shorts are trying to scare.
Another group of traders who got in lower and can't decide whether to make quick $$$...callme crazy, but they may sell.
Another group (me included) who are wondering if this $500 mill shelf is a dropdown/recap opportunity from heaven above...seems to good to be true, but recap financed with 10-15% bonds saves the company 15-20% on 30%divi and funds a repurchase of shares...makes some sense for a profitable company and its creditors to consider...maybe this has been the plan all along and such a plan helps explain the plummeting SP.
And, of course, another circle j "group" of one or two shorts who think they are fooling everyone into a panic tomorrow.
GLTA...tomorrow and the next days/weeks/months...could be interesting....of note dilution with commons makes no sense, but who knows.
Time will tell.
Thanks for your reply. I couldn't find that info. Is that a general feature of bond repayment schedules, or do they vary from company to company?
According to your reply, they may have enough cash to pay...
If they have enough to pay, then why not simply pay to preserve the SP?
Why all the suspense?
The negotiations with overseas ship owners over charter rates is also another variable. Last year, HMM spent 1.88 trillion won (US$1.61 billion) on charter costs alone out of 5.77 trillion won (US$4.95 billion) of its sales. Due to the long-term contract signed when the shipping business was booming, the company has been paying higher charter rates than the market value. Eventually, HMM began negotiations with ship owner in order to lower the current charter rate by 20 to 30 percent. When HMM fails to bring off the negotiations and go into receivership, the company is less likely to pay charter costs to ship owners. Thus, there is good chance of making a deal. HMM’s negotiation team has been visiting overseas ship owners from last month. The team finished the first round of negotiations and is arranging the schedule of renegotiation to determine specific pricing terms.
Related news...now 28-30% cut in rates...
Creditors led by the state-run Korea Development Bank are soon to come up with a detailed plan to inject new capital for Hyundai Merchant Marine, as the ailing shipping firm is near completing negotiations with shipowners over ship leasing fees.
Creditors next week will start discussing a debt-to-equity swap plan, KDB spokesman Cho Seong-wook said Wednesday. A debt-to-equity swap refers to swapping loans into stocks of the company to alleviate liquidity crunch.
Currently, Hyundai Merchant’s secured debts to financial institutions amount to 1.1 trillion won, according to the nation’s No. 2 shipping firm. About 50 to 60 percent of the amount may be injected as a debt-to-equity swap scheme, industry sources said.
The creditors had earlier said that they would roll over debts and inject fresh loans for Hyundai Merchant, on the condition that the company lowers ship leasing rates
Hyundai Merchant refused to reveal how much charter rates the company should negotiate to cut, saying it would affect bargaining power. Local media speculated a rate cut of about 28-30 percent.
The creditors and the government had earlier urged the company to complete negotiations with shipowners by May 20.
...I'll guess default and a big fat #$%$ from the CEO to the self-righteous Dig.
Zoo seems to have his ducks in a line... he is ready for all outcomes tomorrow, in a month or a year.
BTW, the person who keeps using the phrase "aye Dopes?" is really a piece of work on this board.
I really doubt she is a paid basher...
More likely a bored criminal, an ISIS wife, or a meth-driven prostitute who is forced to make these constant posts by her pimp...get a life, aye Dope?
In any case, she is effective, as I am really sick of her posts...
Sorry, but I gotta jump in here with some suggestions...
Take your lumps and move on.
Don't become a frustrated victim.
Deal with the world as it is.
Hug your wife and kids, and explain what YOU did with the $$$, not some imaginary villains that the mass media is programming you to blame.
Newbie here interested in possibility of no default...noBK
On May 15th,wont they have both the April 15th + the May 15th payments due?
Do they have that much cash?
Tea leaves say that HMM is not going under...good for CPLP!
Lotte agrees to buy controlling stake in Hyundai Logistics
2016.05.11 17:23:15 | 2016.05.11 17:32:23
Lotte Group, one of the South Korea’s largest conglomerates, will acquire a controlling stake in Hyundai Logistics Co. for 410 billion won ($350 million) in hopes to strengthen its retail and logistics business.
The majority stake of 88.8 percent in Hyundai Logistics is owned by IGIS I Corp. a special purpose company (SPC) set up by Orix Private Equity with a 35 percent stake, Lotte Group with a 35 percent, and Hyundai Merchant Marine with a 30 percent.
The transaction is expected to ease the cash crunch of struggling Hyundai Merchant Marine. The shipping company took its current stake in Hyundai Logistics for 100 billion won in September 2014.
It does look like it rhymes with last year...17 March 2015...any more thoughts on this from the oldtimers here?
F-3ASR Automatic Shelf Registration Statement Of Securities Of Well-Known Seasoned Issuers
We may, from time to time, offer to sell common units, preferred units or debt securities. We refer to our common units, preferred units and debt securities collectively as the “securities”. The securities we may offer may be convertible into or exercisable or exchangeable for other securities. We may offer the securities separately or together, in separate series or classes and in amounts, at prices and on terms described in one or more supplements to this prospectus. In addition, this prospectus may be used, from time to time, to offer our common units for the account of selling unitholders. This prospectus describes some of the general terms that may apply to these securities. Each time we sell securities, or selling unitholders offer and sell our common units, the specific terms of the securities to be offered, and any other information relating to a specific offering, will be set forth in an amendment to the registration statement of which this prospectus is a part, or in a supplement to this prospectus, or may be set forth in one or more documents incorporated by reference in this prospectus.
We may offer and sell these securities, or selling unitholders may offer and sell our common units, to or through one or more underwriters, dealers and agents, or directly to purchasers, or through other means, on a continuous or delayed basis. If any underwriters are involved in the sale of any securities offered by this prospectus and any prospectus supplement, their names, and any applicable purchase price, fee, commission or discount arrangement between or among them, will be set forth, or may be calculable from the information set forth, in the applicable prospectus supplement.
That makes some sense...voluntary debt for equity CH11 like magnum. Might explain ongoing interest in bonds.
I may be mistaken, but didn't ALL existing equity (common and preferred) get wiped out and replaced by bondholders as new equity?
Are you suggesting they should dilute existing units with additional debt-to-equity units to solve codi instead of wiping out existing unit holders?
CPLP is a shipping partnership operating a variety of ships, but primarily crude oil and product tankers.
CPLP's performance is not directly tied to the price of crude oil, but CPLP unit seems to have been driven down in the general energy rout.
CPLP currently yields 31.2% and trades at roughly 3.5 times cash flow.
CPLP faces some challenges, but also should experience some positive developments in 2016.
At a current price of $3.06 per unit, CPLP is a bargain.
Take 'er down shorts, I need moar.
Thanks for that clarification.
In that case, the Magnum Hunter playbook seems like a win-win for all involved except the current unit holders. The greed-play for current creditors/bondholders is to have company value soon become assessed as lower due to oil crash and uncertain future...as a result, they can employ voluntary CH11 debt-for-equity to assume total ownership...and tell the current unit holders to take a hike.
The Magnum investors squawked at this approach, but it didn't get them anywhere that I can tell...Magnum now stronger with new owners and dumped CEO.
If you did not see this post earlier, then Zoo could be alias for someone that you had on ignore...
In that case, the "Fidelity" news is indeed suspect...
In any case, it scared me away until some kind of verifiable news...
Best of luck to all, I hope it works out for those little guys who are spending their own money to better themselves.
from thetaxadviser (goog it, seems like a pretty good site)
Bankruptcy exclusion: Under Sec. 108(a)(1)(A), COD income is excluded from gross income where the discharge of indebtedness is granted in a Title 11 case, which includes Chapter 11 reorganizations, Chapter 7 liquidations, and Chapter 13 bankruptcy proceedings under Title 11 of the U.S. Code. This exclusion applies only if the discharge of indebtedness is granted by a court order or in a court-approved plan (Sec. 108(d)(2)).
When debt is discharged in bankruptcy, the bankruptcy exclusion rules govern, even if one of the other exceptions would have applied (Sec. 108(a)(2)(A)); this treatment is important since the required reduction of tax attributes differs depending on which COD income exclusion applies.
FWIW...this scared me away yesterday...even if no Fidelity note, it is hard to get around the advantages of dodging CODI when BBEP has so much debt...
and this tickle..." reduction rate may be lower than that level"...lower than 28%...maybe?
Since February, Hyundai Merchant has been in talks with ship owners to cut the rates and the negotiations are reportedly in the final stage.
Industry sources said Hyundai Merchant is working to lower the rates by some 28 percent on average, but the reduction rate may be lower than that level.
The KDB is the main creditor bank of Daewoo Shipbuilding & Marine Engineering Co. and Hyundai Merchant Marine Co., both still struggling with oversupply and low demand since the 2008 financial crisis.
Calling the net loss a “temporary and structural loss” that takes place due to changes in industry cycles, the state bank said it will continue to provide financial support to the “backbone” industries such as shipbuilding and shipping to bring them back on track through restructuring.
Vital boost for HMM from likely brokerage sale
The light at the end of the tunnel just grew brighter for South Korea’s Hyundai Merchant Marine (HMM). Its parent Hyundai Group has been offered KRW1trn ($874m) by fellow Korean firm KB Financial to take over a 22.56% stake in another subsidiary, Hyundai Securities.
If the deal goes through, HMM, the largest shareholder of Hyundai Securities, could repay most of its KRW400bn debt borrowed last November from sister company Hyundai Elevator with its interest in the brokerage as collateral. The remaining proceeds would be used to cover imminent payables owed to customers. HMM also owes banks a further KRW4.8trn in debt. The bid for brokerage Hyundai Securities is far higher than earlier valuations of KRW650bn as KB Financial found itself in a bidding war with rivals.
“Once HMM’s stabilisation is completed, all of the benefits will be returned to stakeholders, and HMM will put in every effort to realise this. In order to do so, we sincerely ask for active support and understanding of our stakeholders, including shipowners, creditors, public bond holders, shippers, suppliers and vendors so HMM can be on the right track as soon as possible,” an HMM official said earlier this week.
KB wins bid for brokerage control
KB Financial Group, one of the four largest financial groups in Korea, has been selected as the preferred bidder to take over Hyundai Securities, beating Korea Investment Holdings and Hong Kong-based private equity fund Actis.
Some market observers believe KB offered nearly 1 trillion won. Considering shares of Hyundai Securities closed at 6,870 won on Thursday, this bidding price would be nearly three times higher than the current market value.
Hyundai Group put up 22.56 percent of the brokerage’s shares, worth 300 billion won, for sale on Feb. 3, seeking cash to rescue its affiliate Hyundai Merchant Marine, which is seriously short of liquidity.
Of that 22.56 percent, 22.43 percent is currently owned by the troubled shipper.
YES..." three times higher than the current market value"
Mark this in the "good" column for CPLP...Gus