VTG doesn't have the time. Petrobras will stop payments immediately and wait for things to unfold. Perhaps if VTG agrees to a very substantially lowered dayrate they might be able to keep the contract. I would expect Petrobras to succeed in arbitration given the bribery issue.
Anyway VTG is done with this news. They are losing more than $15 mln in monthly cash flows and at least for the short term still have the costs to bear. Chapter 11 will be filed within days.
At least the idiot is already up almost 20% shorting the initial run-up. Given the history of the company shorting ANY news is like printing money. I have done that many times in the past and never lost. The last time when they announced their "multifaceted financing strategy" a few weeks ago.
Well, the history of the company should have taught you that NOTHING the company has ever announced DID COME TRUE.
Well - they have hired them for sure and told them to look for strategic alternatives but most people doubt they have any kind of buyout interest on the table. This will only add to cash losses and nothing else.
Well the costs for hiring Morgan Stanley will be pretty real of course but I would hold every bet that there have been no impressions of interest from third parties. But that's a very elastic term actually...
"in response to third-party initiated expressions of interest, the Company's Board of Directors has engaged Morgan Stanley & Co. LLC to conduct a review of strategic alternatives to maximize shareholder value"
Don't let Alan fool you another time. There's no third-party interest. They just want to sell more shares into the open market using their ATM agreement with Cantor and get some more money out of the Lincoln Park equity line.
Short as much you can once the stock re-opens.
Given the obvious bribery involved in signing this contract I guess Petrobras will most likely have a strong case in court. Anyway the cash flows will be gone for the foreseeable future and the soon to be idle Titanium Explorer will now cause huge costs instead of bringing in baldy needed cash.
The loss of the contract should lead to a chapter 11 filing withing weeks.
I don't see why this should matter. The company will have to deal mainly with the highest ranking creditors in bankruptcy. No creditor would want to sell high spec drill ships into a non-existing market.
While I have no doubt about the company filing for chapter 11 within the next few weeks it looks pretty unlikely that the rigs will be sold then. Actually the company will use that time to negotiate a deal (perhaps a deal will be pre-negotiated like HERO did) with their creditors and other parties like the Cobalt Explorer shipyard and of course Petrobras now. Vantage will most likely emerge soon after that as a company with substantially lowered debt obligations and fresh cash to perhaps even take advantage of other distressed drillers. Shareholders will be holding the bag then of course.
I bought 100k shares in after hours below $1.20. Analysts on the call seemed pretty much satisfied with the company's progress and the August back to school update was VERY encouraging. I am looking for some constructive analyst commentary tomorrow morning and even hoping for some upgrades (but that might be too early).
Given their execution history you shouldn't believe a single word of management's projections. They have always missed their numbers, why should next quarter be any exception ?
Missing each revenue projection by a mile, burning cash like hell and now all of a sudden having to finance their customer's purchases. Even the remaining cash balance and quarterly cash burn are roughly the same here. It will be a tough race to chapter 11 but both will cross that line, no doubt about it.
No, distributions have clearly peaked and they will need to set aside some cash to prepare for 2017 and beyond. But at least they look safe around the current level for a couple of quarters more. Bought some at $8.10 on the undeserved sell off caused by fears over the dividend but sold now at $9.50.
As expected the company does not change its dividend policy as long as cash flows continue to more than cover the distributions. 2016 should see at least another $2 in distributions for unitholders but 2017 will most likely see a signifcant cut as new contracts currently would be cash flow neutral at the very best.
While I generally agree with your view on Chinese takeout offers I would imagine this one is for real and will most likely get done but perhaps not at the originally supposed price point given the severe issues the company's business is experiencing currently.
Given their contracts they might cut back on the distribution slightly but in fact their cash flows should be pretty safe well into 2017. If SDLP does not announce a significant distribution cut tomorrow the shares might move up very meaningfully.