PMO1

Interesting statement this a.m. Month end interest payment looking o.k. as PO has undertaken a fair bit of hedging. Purchase of N Sea assets on hold. Talking to lenders about relaxing covenants.
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  • Look at that, dandigirl is looking so relaxed on the pitch this morning, back in the form, ready to hit the ball out of the park

    https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/PMO/14537685.html
  • Seems that the BP deal is back on as of this a.m. Announcement includes reference to an agreement with ACRM to withdraw their court appeal. If as before, deal will likely include an extension to and an increase in interest rate for PMO1together with some changes [relaxation of covenants] in other terms. More details to follow. Nice, I think. Interest due to be paid next week.
  • As you say the purchase of the BP assets is back on but at more favourable terms and they seem to have come to an arrangement with the activist investors who have bought a load of cheap shares to cover at least some of their short position. Don't pretend to understand all of it but both shares and bonds up 10% this morning.
  • So the new deal with BP is agreed and ARCM have formally withdrawn their appeal.
    When does the new interest rate take effect from? Is it backdated to the original BP deal/scheme of arrangement or from now?
    Got last weeks interest but will I be getting more soon?
  • Hello whitebeard, Instead of posting what I assume to be a bs guru video - does anybody have the time or inclination to watch such? - I will try to be helpful by informing that the terms of PMO's credit arrangements have to be discussed and agreed. More info will come out in the coming weeks including those for PMO1. If as before, expect to see an term extension and an increase in rate - possibly plus a small fee.
    Next interest due in 6 months.
  • Thanks Dandigirl,
    I had seen the proposal for extension and interest change and just wondered whether they were to be changed now that all parties appear to be on the same page so to speak
    I saw the prior post and did wonder whether to comment. As my mum said if you can't say anything nice.......
  • Thank you, whitebeard. Of course, your mum was wise and right. I shouldn't have. Sorry!
  • Sorry everyone: I should not have commented. I will try harder to ignore in the future. Enough said for now, I think.
  • Many thanks to dandigirl for reopening the conversation about PMO1.
    Last week I topped up the 1% of my total portfolio that I invested there three years ago. I paid the same price that I paid then but the spread was 7p compared to the original miniscule 0.8p.
    I am intrigued by the current broad spreads but actually it was probably more like 5p. When I tested the price with Interactive Investor I was offered a buy at substantially less than that initially indicated. A YTM of 25% over less than a year was too difficult to resist.
    If my memory is correct the last time PMO1 was extended there was no compulsion involved. Holders could stick with the original maturity conditions or go with the extension which most of them did.
    Roger.
  • Please allow me to share a few thoughts about attention seekers.
    A very extreme result of such a personality disorder is that of Mark Chapman. He revelled in the thought of everyone around him saying, “That is the man who shot John Lennon.” His now increasingly strong expressions of regret seem to coincide with appearances before parole boards.
    A more run of the mill example is the arrival of a newbie on a special interest forum of which I am a member. He persisted in always writing vv instead of w. Ever vvondered how off putting that vvould be?
    Trainee teachers learn that it is much more effective to praise a child when they behave than to put them in the naughty corner when they do not. In a work context good managers also use this technique.
    At least one contributor on this forum has tried this approach with our miscreant. It didn’t work and never seems to on social media. And the telling off approach merely feeds the virus. All we can do is to ignore the naughty child.
    Believe me, it is very easy to train yourself to be entirely dismissive and to read none of the output of attention seekers.
    I am fully aware that my post may well result in a further tirade of repetitious twaddle. For me that will merely mean just the very minor irritation having to scroll down through it all.
    Roger.
  • Thank You dandigirl, and I apologise for putting emotional pressure on u >>

    As you can imagine, I too have to overcome my own ego and blindspot barriers, that's why I am still here : )
  • From Premier this a.m.:

    ""Premier is pleased to announce that its creditors have approved the "Stable Platform Agreement". As a result, the Company's financial covenants have been waived through to 30 September 2020 whilst discussions continue over the proposed amendments to the Group's existing credit facilities"".

  • From this morning's Trading Update:

    """Discussions with a subset of Premier’s creditors regarding a long term extension to the Group’s credit maturities underway; aim to agree terms which can be recommended to the full lender group by the end of July"""".
  • https://www.premier-oil.com/premieroil/media/press/spas-signed-for-bp-acquisitions

    I will lob a few k into this if the spread is reasonable, as I need to rebalance the portfolio bondwards a tad.

    Thanks other posters for their comments, even the chimp :-)
  • Premier posted on 20/08 that refinancing terms had been agreed in principle. Terms include an extension to March 2025 - interest rate 8.34%. All to be non-amortising. Now to the detail which it is hoped to conclude Q4 2020.
  • I don't normally watch video postings but made an exception for this as it appeared highly relevant being about PMO. Glad I did. 25 mins well spent. Highly recommended for those wishing to know more about PMO and where it is going. Great interview by both interviewer and CEO interviewee. One reference I took - that the industry using $65 p.d. and banks $55 p.d. in their projections. At the lower level, PMO will do well - at the higher, really well. And as part of the big debt and equity refinancing, debt is to be rolled forward at about 8.3% p.a. Thank you Cat. Much appreciated as a holder of PMO1. I will continue to hold.
  • Of course, you can drive down the road with your eyes shut closed >>
  • Well, that came out of nowhere!

    Result: Another high earner going?

    """Premier's approximately US$2.7 billion of total gross debt and certain hedging liabilities will be repaid and cancelled on completion"".
  • FWIW - I'm not invested so no axe to grind.

    Premier Oil is offering its existing creditors an average recovery of 61 cents on the dollar and shares in the new group emerging from the announced merger with Harbour Energy’s Chrysaor, the company said today. Recovery could rise to 75 cents on average across creditors for those electing to take cash instead of shares in a partial cash alternative.

    As part of the transaction, Premier is seeking an extension of the existing maturity date of its debt facilities from May 2021 to March 2022 through court-approved restructuring plans in order “to support the implementation of the transaction”. As of today, 43% of existing creditors by value have entered into a support letter committing to approve the plans and waive financial covenants. This agreement will expire on Nov. 3 if sufficient consent of 75% has not been reached.

    The company said this morning that Premier Oil’s $2.7 billion gross debt and cross-currency swaps will be dealt with through a $1.23 billion cash payment, funded by existing Premier cash and a $4.5 billion reserve based lending facility, which is fully underwritten by Bank of Montreal, BNP Paribas, DNB and Lloyds Bank. The $400 million of letters of credit will be refinanced.

    In addition, existing creditors will receive new shares in the combined group and/or a cash alternative which is capped at a maximum of $175 million.

    Premier Oil said its board believes that the Chrysaor transaction is of “broadly comparable value to shareholders as compared to the proposed refinancing but, taking into account today's challenging macroeconomic conditions, has greater execution certainty.” The London-listed E&P group is therefore scrapping the previously proposed refinancing and the acquisition of BP assets. Premier noted that CEO Tony Durrant will resign from Premier at the end of the year.

    Assuming a full take-up of shares, rather than the cash alternative, Premier’s existing creditors will hold an 18% equity stake in the combined group. Assuming no take-up, their shareholding will be 10.63% instead.

    Premier Oil will host a conference call today at 9.30 a.m. BST to discuss the transaction. To join, dial +44 (0)20 3936 2999. Access code: 348571.
  • VSI: Any thoughts on the £150m Retail Bond? Thks.
  • I'm afraid I have no insight here.

    Traders (Stifel, Canacord, Jeffries) have marked it up to 73/75 (up 3-5 points since yesterday?). So market seems to have put a cap on it here and these bonds seemingly are not going to par just yet.
  • Here is a link to the full details

    https://www.premier-oil.com/sites/default/files/files/201006_PR_FINAL.pdf

    I can't see why the retail bonds would be treated any better than the rest of the debt and so my understanding is that the deal is 61p plus shares giving a total recovery of 75p or 75p in cash (although there seems to be a limit of $175 million for the cash offer over 61p). Certainly no suggestion that we will be getting par. Looks like if 75% of the bond holders agree before 3 Nov then the debt will be still extended to March 2022 and the interest increased to 8.34% but this will only be paid until the deal concludes when the terms above will apply.
  • "Creditors, who the companies’ spokesmen said will get between 70 and 80 cents on each dollar owed, will also own shares in the new group."
    Does this imply that the between 70 & 80 AND the shares, together may equate to par?

    https://www.reuters.com/article/premier-oil-ma-chrysaor/update-4-chrysaor-to-take-over-premier-oil-creating-uk-north-seas-biggest-producer-idUSL4N2GX1E4?rpc=401&
  • My understanding is 61p cash per £1 nominal + 1 PMO Share or the option to receive another 14p in cash in lieu of the share. At the current share price you would get around 75-77p.

    https://www.premier-oil.com/investors/retail-bond
  • Gwm: Good spot! Thank you. Not sure when that went up. The wording includes...

    """"The Retail Bonds will, in the calculation of consideration payable in respect of this repayment and cancellation, be treated equally with other senior-ranking creditors of Premier""".

    No special treatment - and good bye to this nice little payer - it's been good while it lasted.

    P.S. Must look to see how December's interest payment will be treated?
  • It's goodbye to the yield but more importantly it's goodbye to approximately 25% of your capital that was originally due to have been returned in December 2020. Putting rough figures into a bond calculator suggest that for somebody investing at issue in 2013, allowing for the increase in interest three years ago (call it an average 5.5% over 7 years), then if they were to mature in December at 75p the total overall return (income plus loss of capital) will have been around 0.6% per annum. Guess it could have been worse . . .
  • edited October 7
    This is not one of my better purchases. Acquired in the middle of 2018 at par! Including accrued interest I can get 73p selling today. I am tempted but it would be really helpful to know how the December interest payment is going to be treated. I cannot see the information anywhere
  • @littlemart - let's try to ease the pain a bit.

    Assuming 6.5% interest paid for 2.5yrs (to Dec'20) + ~75p (?) final cash redemption, you would have recoverd 91p of original capital.

    Alternatively, you could take 77p total recovery to Dec (16.25p 2.5yr coupons + 61p cash), and let ~15p equity "option" in the largest, private equity-controlled operator in North Sea run for a while and potentially recover some more of your initial capital.
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