PMO1

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  • My guess is that they would pay a proportion if the December interest payment. I.e. how many days worth to the point of settlement.
  • Just a thought...
    The addtional cash option is going to be oversubscribed imho as bondholders aren't in the habit of owning high risk equity, so I suspect that even if you choose the additional cash option I think you will be scaled back.
  • Hi
    The writing has been on the wall for a while in all honestly.
    Listening to the recent interview with the CEO, the BP deal was based on $55 oil. I don't think we are going to see that again anytime soon especially if Biden brings Iran back into the fold. Just a thought.
    Anyway, it could have been a lot worse and we have had the benefit of a high interest rate.
    Below is a piece from the Bond section of Premier's site. This reads to me that the December interest will be paid. Thoughts appreciated, please.

    """""Next Steps

    At this stage Premier is not asking existing holders of the Retail Bonds to take any action. The Retail Bonds remain listed on the UK Listing Authority's Official List and admitted to trading on the London Stock Exchange's regulated market and through the electronic Order Book for Retail Bonds.

    Premier will in due course seek consent from Existing Creditors (including holders of the Retail Bonds) for the Transaction and, in order to support implementation of the Transaction, an extension of the existing maturity date of its debt facilities (including the Retail Bonds) from May 2021 to March 2022, in each case by means of court-approved restructuring plans. Detailed instructions on the actions to be taken by holders of the Retail Bonds in relation to this process will be provided in due course"""".
  • Call me naive if you like but that quote from the website implies that the bonds will continue in existence until their (extended) maturity date which would be at par. There is no provision, as far as I am aware, for 'maturity' to be other than at par. It may seem illogical to 'take out' the equity holders but leave the bond holders untouched but as JammyDodger said bondholders aren't in the habit of owning high risk equities and this may be a reason why.
  • I had struggled initially to find the full details of the proposals on the Premier Oil website but having now done so see that I was indeed being naive! The need to extend the maturity date would seem to be because it is expected that the various processes will not be completed until after May 2021. The details include the statement that "The steps above will result in the repayment and cancellation of all of Premier’s existing debt, including the Retail Bonds, on completion of the Transaction." Oh well, perhaps we can agree to the extension and then hope that it drags on until March 2022 and the maturity date is reached. In the meantime I assume that we will continue to receive our full interest payments.
  • From what I have read the deal is expected to complete during Q1 of 2021. The bonds are due to mature on 31 May 2021. As there are going to be quite a few negotiations and court meetings there may be delays due to Covid-19 or legal issues so I believe seeking an extension to maturity is sensible to avoid default.

    Unfortunately my belief is any coupon payment will be classed as a drawdown and will be deducted from the cash amount available to bondholders. The devil of the deal will be in the detail.

    I agree with Dandigirl that the writing was on the wall. There was a real risk of default and bankruptcy at current oil prices. The company was finding it very difficult to get their solution to work. Not an ideal scenario for bondholders but at least some certainty of getting some return of capital whatever happens to the oil price. For the brave there may be some recovery taking the shares as the company will have much lower levels of debt and be able to turn a profit at lower oil prices. On the down side the free float of PMO shares is going to be very low - between 16-23% so that will dampen future share prices. My investments in ENQ1 and PMO1 were modest punts so I will probably continue my gamble and hope for the best.
  • May be a wrong forum, but what does this mean for Enquest, I wonder?!
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