dandigirl, I hold RGL, but I'm not chasing yield at the moment, I'm happy to sit on a fair amount of cash at zero interest, until the course of the pandemic becomes a bit clearer. Thanks for your comments.
"""Detailed instructions on the actions to be taken by holders of the Retail Bonds in relation to this process will be included in the explanatory statement in respect of the restructuring plans, which Premier expects to be published on or around 26 January 2021""".
"""""An explanatory note for Retail Bondholders (the “Retail Bondholder Explanatory Note”), which provides Retail Bondholders with, inter alia, further background to the Transaction and information regarding the process and timing for voting on, and making elections in connection with, the Restructuring Plans, is being distributed. The Retail Bond Explanatory Note sets out a number of worked examples (extracted from the Explanatory Statement) to demonstrate, for illustrative purposes and based on certain assumptions, what a Retail Bondholder with a Nominal Value of £10,000 of Retail Bonds might receive depending on whether the Retail Bondholder elects the Equity/Cash Option or the Cash-Out Option.
This Retail Bondholder Explanatory Note is part of the explanatory statement being provided to all creditors for the purpose of providing creditors with sufficient information to make an informed decision on whether or not to approve the Restructuring Plans (the “Explanatory Statement”). In considering the Restructuring Plans and whether to vote in favour of them, Retail Bondholders should not rely only on the Retail Bondholder Explanatory Note, which is intended solely to provide a summary overview of the more detailed information contained in the remainder of the Explanatory Statement.
Copies of the Retail Bondholder Explanatory Note and the Explanatory Statement can be obtained from the Group’s website at www.premier-oil.com/investors/retail bond or via the Restructuring Plans website www.lucid-is.com/premieroil. It will also be available for all creditors, free of charge, by contacting Lucid Issuer Services Limited (“Lucid”) the information agent appointed in respect of the Restructuring Plans, at [email protected]
Retail Bondholders should contact their brokers and/or other usual advisors if they require further information in relation to the Retail Bond Explanatory Note, the Explanatory Statement or the Transaction. Information in relation to the procedures for submission of elections in connection with the Restructuring Plans should be directed to Lucid at [email protected]""""
The link to the explanatory statement on the Premier Oil site does not work, but the documentation is available on the Lucid site (https://www.lucid-is.com/premieroil2/).
If I am reading it correctly, assuming one were to choose the equity option, then for every £100 of the retail bond the holder would receive £64 and 157.65 shares, as well as accrued interest from the 11 Dec 20. The Premier Oil shareholders receive new shares on a one-for-one basis so a good indication of the expected share price on issue is the current Premier Oil price - around 18.5p. On this basis, I would expect to receive a payout of £93.15 in late March as well as accrued interest of around £1.80. Even assuming a 10% yield this puts the theoretical current bond price at around 91.
There is the possibility of electing for the cash option, in which case the payout would be somewhere between £78/no shares and £71/84.5 shares. However, if you were tempted to go for the cash option, the sensible thing to do would be to sell your holdings in the market before Feb 22.
Having sold out (at £77.05) in late December I have had a look from time to time at the current price and suspect that as it has trickled up above the £80 level hobgoblin may be correct with his calculations and my sale may have been premature. However, its money in the bank and no worries about any remaining uncertainties. Best of luck to all who are still holding!
my sums come to roughly the same as hobgoblin (slightly less but nothing material). Overall it could have been a lot lot worse especially since I've had these bonds for ages. My last 'forced' sale was the co-op some years ago, back in the days of their cocaine snorting chairman when i got clobbered. It's just a shame that there seems little to reinvest in, in the retail bond market these days.
Thank you, hobgoblin. We had already thought that we would go with the equity option. The firming of the oil price in oil price in recent days helped push us in this direction. Brent above $55 with some predictions that it will go to 65 later this year.
Thank everyone here who has saved me a tonne of time trying to work out the offer. I think just to add that by selecting the cash/shares default option you get the option to buy warrants for the shares at 11c? I don't know if this is coincidence but at 64p for the bond, 1.5 shares (currently worth say 30p and about 9p value in the warrant (though it seems you can buy as many as you like) that comes to about a quid. Have I got that right?
Those are new equity warrants. Im talking about the new creditor shares in para 3.11. You are right I shouldn't have called them "warrants" as it is I believe you just get the share.
Just received a corporate action notice on interactive Investment website. See the options below. OPTION 1: Cash and Stock, Abstain (Default) OPTION 2: Cash and Stock, Vote for OPTION 3: Cash and Stock, Vote against OPTION 4: Maximise Cash, Abstain OPTION 5: Maximise Cash, Vote for OPTION 6: Maximise Cash, Vote against OPTION 7: Maximise Shares, Abstain OPTION 8: Maximise Shares, Vote for OPTION 9: Maximise Shares, Vote Against The maximise shares option is not mentioned in the explanatory note but II state "If you select an option which indicates Maximise shares, you will receive the same as the Cash and Stock default consideration, save that all or part of your cash entitlement will be used to purchase new shares in lieu of cash, at USD0.1144 per new share.
Can someone explain how this works as the shares closed at 20.7p today. Surely they cannot be offering them at $.1144 or 8.4p??
Hobgoblin's analysis seemed too good to be true, (93% is well above the bond price) so I delved abit more into the documentation. The Prospectus for the issue (not the arrangements for creditors) states on page 9 that each existing ordinary shares of 0.125p will be replaced by 1 ordinary share of .001p and 1 non-voting deferred share of 12.499p.So effectively there is a 2 for 1 split and therefore the current market value of Premier shares needs to be divided by 2. This means that an apparent price of 18.5p will be effectively 9.25p only about 10% above the £ equivalent of $0.1144, (ie £0.83) and not more than twice $0.1144. This means that assuming the shares are sold the effective payout for a share price of 18.5p under the default option is 79%, rather than 93%. On the current (15/2/21) share price of 22.45p, the default option is worth 81.7%, which is consistent with the market price of the bonds of 80.9%/84.5%. If the 'all share' option was chosen (ie buy more shares with the cash part) the overall return would have been 104.3%. I was tempted to go for that but didn't complete this analysis until too late and HL made it very difficult to go down this route. It would have involved putting the money for the new shares up before the cash was received and specifying how many shares I wished to buy, which is impossible to work out in advance and match exactly the cash I would have received. I also suspect that the 'buy more shares' option will be hugely over-subscribed, so the chances of picking up bargain shares is low. Another reason for not going with the 'all share' option is that I didn't receive any details from HL until 10/2/21, so putting in my instructions by 15/2/21 was challenging. Overall, I am reasonably satisfied with effectively getting 81.7% (much more than I was expecting when I first heard about the restructuring plans) and I and might keep the shares for a while.
The number of shares subscribed for under the Top-Up Election exceeded the maximum number of shares which could be available under the Top-Up Election. So these Senior Creditors have mostly gone for shares rather than cash so much so that the required $175m set aside for the likes of us is available in full. Indeed, the take up is such that the additional cash exceeds $175m and that which was to be used appears to remain on the balance sheet. Augers well for those who have chosen to cash out.
For those of you that may be interested in the finer details, the Retail bond holders ($150m) are also classed as 'Senior creditors' (total Senior creditors are $2887m) and it is only 'Super Senior Creditors' (amounting to $78m) that get a full recovery, ie no haircut. So Retail bond holders are treated 'fairly', at least compared to the other Senior Creditors. If more than 46% of Senior Creditors elect to take the 'all cash' option , there will not be enough cash to fund it, so they will receive a mixture of cash and shares. What has happened is that enough Senior Creditors have agreed to buy the shares (at $0.1144) that would have been allocated to those cashing-out, and this allows all those wishing to cash-out to receive everything in cash. So 1530m shares have been 'bought' at $0.1144 to cover this $175m shortfall. That is the source of the $175m that will remain on the balance sheet. In summary, my understanding is those wishing to cash-out will indeed receive everything in cash and those lucky enough to offer to buy these shares at $0.1144 will make a profit of over 10% on the shares. Those going for the default option of cash and shares will do slightly better than those cashing out (see my post of 16/2/21). If you want to read the part of the documentation that covers this, see pages 234 and 235 of of the Explanatory Statement, but it is a bit of a 'wet towel' job, and not recommended ! Can't help thinking that the timing of the oil price crash that sunk the abandoned alternative plan to purchase further assets to pay down the debt was 'unlucky' or maybe something else... this would have avoided haircuts and increased the coupon on the bond to 8.34% payable up to the revised maturity date of Nov 2023. We shall never know...
Hi, does anyone have any idea when the cash and shares are likely to be paid into our accounts. Reason being I am waiting to change broker for my stocks and shares ISA and PMO1 is held within my ISA and thus holding up my transfer. I am currently with EQI. Thanks in advance.
HL told me the cash and shares will be added to accounts 'on or around 29 March 2021'. The debt restructuring takes place 29 March 2021. I have not checked when Harbour Energy shares are re-admitted for trading .
gtonsaffron, Slightly off subject, your change of broker from EQI, is it because of their recent sale to Interactive Investor (I am with EQI and wondering how this sale will impact )
No not at all. I have had some issues with Eqi administration for which they have just compensated me for. Now that I'm is taking over I will be staying put as the platform charges on I'm will suit my portfolio much better than Eqi. Thanks
Anyone been notified by their broker about when they might receive cash and shares in their account? I was hoping to hear today in preparation for start of trading tomorrow, but HL have been their usual, uncommunicative selves.
Comments
"""Detailed instructions on the actions to be taken by holders of the Retail Bonds in relation to this process will be included in the explanatory statement in respect of the restructuring plans, which Premier expects to be published on or around 26 January 2021""".
Price 82.43 this a.m. on LSE.
Hmm.
https://www.premier-oil.com/premieroil/media/press/notice-to-holders-of-premiers-ps150000000-6.5-per-cent-notes-due-2021-the-retail-bonds
"""""An explanatory note for Retail Bondholders (the “Retail Bondholder Explanatory Note”), which provides Retail Bondholders with, inter alia, further background to the Transaction and information regarding the process and timing for voting on, and making elections in connection with, the Restructuring Plans, is being distributed. The Retail Bond Explanatory Note sets out a number of worked examples (extracted from the Explanatory Statement) to demonstrate, for illustrative purposes and based on certain assumptions, what a Retail Bondholder with a Nominal Value of £10,000 of Retail Bonds might receive depending on whether the Retail Bondholder elects the Equity/Cash Option or the Cash-Out Option.
This Retail Bondholder Explanatory Note is part of the explanatory statement being provided to all creditors for the purpose of providing creditors with sufficient information to make an informed decision on whether or not to approve the Restructuring Plans (the “Explanatory Statement”). In considering the Restructuring Plans and whether to vote in favour of them, Retail Bondholders should not rely only on the Retail Bondholder Explanatory Note, which is intended solely to provide a summary overview of the more detailed information contained in the remainder of the Explanatory Statement.
Copies of the Retail Bondholder Explanatory Note and the Explanatory Statement can be obtained from the Group’s website at www.premier-oil.com/investors/retail bond or via the Restructuring Plans website www.lucid-is.com/premieroil. It will also be available for all creditors, free of charge, by contacting Lucid Issuer Services Limited (“Lucid”) the information agent appointed in respect of the Restructuring Plans, at [email protected]
Retail Bondholders should contact their brokers and/or other usual advisors if they require further information in relation to the Retail Bond Explanatory Note, the Explanatory Statement or the Transaction. Information in relation to the procedures for submission of elections in connection with the Restructuring Plans should be directed to Lucid at [email protected]""""
If I am reading it correctly, assuming one were to choose the equity option, then for every £100 of the retail bond the holder would receive £64 and 157.65 shares, as well as accrued interest from the 11 Dec 20. The Premier Oil shareholders receive new shares on a one-for-one basis so a good indication of the expected share price on issue is the current Premier Oil price - around 18.5p. On this basis, I would expect to receive a payout of £93.15 in late March as well as accrued interest of around £1.80. Even assuming a 10% yield this puts the theoretical current bond price at around 91.
There is the possibility of electing for the cash option, in which case the payout would be somewhere between £78/no shares and £71/84.5 shares. However, if you were tempted to go for the cash option, the sensible thing to do would be to sell your holdings in the market before Feb 22.
OPTION 1: Cash and Stock, Abstain (Default)
OPTION 2: Cash and Stock, Vote for
OPTION 3: Cash and Stock, Vote against
OPTION 4: Maximise Cash, Abstain
OPTION 5: Maximise Cash, Vote for
OPTION 6: Maximise Cash, Vote against
OPTION 7: Maximise Shares, Abstain
OPTION 8: Maximise Shares, Vote for
OPTION 9: Maximise Shares, Vote Against
The maximise shares option is not mentioned in the explanatory note but II state "If you select an option which indicates Maximise shares, you will receive the same as the Cash and Stock default
consideration, save that all or part of your cash entitlement will be used to purchase new shares in lieu of cash, at USD0.1144 per new share.
Can someone explain how this works as the shares closed at 20.7p today. Surely they cannot be offering them at $.1144 or 8.4p??
4 years of tax free production due to PMO's $4bn of U K tax losses
Cash break even at $33 p.b.
Divis could start next year.
The new company could be what oil and gas bulls are looking for.
Me, am content to have selected the cash/equity alternative.
Overall, I am reasonably satisfied with effectively getting 81.7% (much more than I was expecting when I first heard about the restructuring plans) and I and might keep the shares for a while.
The number of shares subscribed for under the Top-Up Election exceeded the maximum number of shares which could be available under the Top-Up Election. So these Senior Creditors have mostly gone for shares rather than cash so much so that the required $175m set aside for the likes of us is available in full. Indeed, the take up is such that the additional cash exceeds $175m and that which was to be used appears to remain on the balance sheet. Augers well for those who have chosen to cash out.
Sorry, if I have not expressed this well.
https://www.premier-oil.com/premieroil/media/press/result-of-creditor-meetings
In summary, my understanding is those wishing to cash-out will indeed receive everything in cash and those lucky enough to offer to buy these shares at $0.1144 will make a profit of over 10% on the shares. Those going for the default option of cash and shares will do slightly better than those cashing out (see my post of 16/2/21).
If you want to read the part of the documentation that covers this, see pages 234 and 235 of of the Explanatory Statement, but it is a bit of a 'wet towel' job, and not recommended !
Can't help thinking that the timing of the oil price crash that sunk the abandoned alternative plan to purchase further assets to pay down the debt was 'unlucky' or maybe something else... this would have avoided haircuts and increased the coupon on the bond to 8.34% payable up to the revised maturity date of Nov 2023. We shall never know...
Agree with you, actuaryman, timing was unfortunate for those holding PMO - and great for Chrysaor.
https://www.premier-oil.com/premieroil/media/press/chrysaor-merger-update-uk-regulatory-condition-satisfied-mexican-approval-received
Hi, does anyone have any idea when the cash and shares are likely to be paid into our accounts. Reason being I am waiting to change broker for my stocks and shares ISA and PMO1 is held within my ISA and thus holding up my transfer. I am currently with EQI. Thanks in advance.
No not at all. I have had some issues with Eqi administration for which they have just compensated me for. Now that I'm is taking over I will be staying put as the platform charges on I'm will suit my portfolio much better than Eqi. Thanks
Nothing from Eqi as yet.