I don't think the wording of today's press release allows for any other realistic conclusion.
Obviously they don't see a chance to contract the rigs for the next several years (!) and in light of this assessment they seemingly don't want to bear neither the stacking nor the SPS costs anymore. They will be already burdened with the costs of cold stacking two of their state of the art drillships in 2016 so they decided to dispose of the older units one way or another.
Never before has a current generation drillship been cold-stacked so far - this might become just another expensive lesson for ORIG...
That calculation contained the 626k dayrate of the OR Mylos for several quarters in 2016. This contract now is going to be cancelled around year end without compensation.
I think the company is heading for bankruptcy. With another high margin contract seemingly getting terminated one year early without compensation and the proposed cold stacking of state of the art drillships. Not to mention the scrapping of their semi-subs.
Ok - it is only that they will most likely lose one of their highest margin contracts due to early termination (impact $250 mln). They are considering scrapping two 5th generation semi-subs. They are cold-stacking at least one newest generation drillship in order to delay the SPS and because there's no work available.
Ok - the Petrobras contracts are seemingly still in place - FOR NOW.
Frankly speaking you are an idiot as you should know that chapter 11 proceedings are in fact designed for preparing the company to emerge STRONGER and as a much more viable entity. Debt will be cut substantially lowering break-even levels and making Paragon a highly competitive company during this downturn that might even be able to pick up some distressed assets themselves later in the cycle.
I think the shares will be worth close to zero pretty soon. The company has a $160 mln bond maturity due in October and they don't have the money to pay it back. This will go the same way like LDK and Suntech.
Yes, hiring prominent bankruptcy lawyers always gives investors great faith in their company I guess. Lazard is on board to advice on the new capital structure while the lawyers will negotiate the exact terms with banks and bondholders. Current equity will be wiped out and banks and bondholders will then own a new company with much lower debt and stronger competitiveness.
This looks like wishful thinking. Remember the company has another short term bond maturity in October (around $160 mln). At this point it looks highly unlikely that the company will be able to make that payment.
This is ultra low margin China business and I would bet the contract has already been included into the company's most recent projections. Overall this is a great chance to get short some shares here.
Of course it has. Perhaps you should think about the fact why the company hired one of the most prominent bankruptcy lawyers alongside Lazard to assist with this review. Bankruptcy is a given now.
This is plain dumb as Quiksilver already said that the shares will be worthless. Even worse the shares will be cancelled after the new Quiksilver emerges from chapter 11 shortly.
Carl obviously does not think that Endo (or anyone else) will buy the company as otherwise he would have actually bought the shares outright instead of going after the converts at a huge discount.
Again - VVUS won't be able to pay that convertible back in 2020 anyway - so they will have to address this bond at some time going forward and that's exactly why Carl is bidding for those bonds currently. They would simply agree to a much lower conversion price and that's it.
When calculating with 70 mln outstanding shares and a share price of $0.18 the current value of the new DBG is roughly $90mln.
Graham shareholders get 47% of the new DBG shares so the value of Graham calculates to $42 mln currently. I have assigned the remaining market value of $48 mln to Hudson.
This is of course utter nonsense. Icahn in fact is positioning himself to swallow the company on the cheap in a future restructuring. Being the sole creditor of the company puts him in a senior position to all shareholders and moreover gives him superior negotiation power. He doesn't want to buy the company by paying a premium, he in fact is looking to get into the driver's seat by avoiding dealing with the current shareholders.
If his offer is successful he could just offer to Vivus to convert the $220 mln bond into new shares at a VERY LOW PRICE. The company would be debt free and Icahn would get a vast majority of shares all at once. This will be the most likely outcome here.
Vivus won't be in the position to pay back the bond in 2020 anyway given their roughly $10 mln cash burn rate per quarter so this issue will have to be addressed sooner or later.