RE: RE: Dilution?Ok, lets run some dilution numbers.
Lets say we issue another 1b shares @ $1 to the second lien holders to wipe out $1b in debt. At full production, and $120 oil, OPTI's EBIT will be $500 mil + so EPS will be around $500mil / 1.28b shares = 40 cents per share, putting the share price at $4-$8 bucks........wow, nice way to royally screw over shareholders and give the bondholders a golden ticket....all to save $100 million dollars/yr out of total net cash flow of $850 million
Even if you issue 2b shares at 50 cents, the bond holders get a deal of the century! Now if they are issued shares based on book value of $3.68.......then dilution is much less and bond holders get a more realistic opportunity.
As said before, if thousands of employees and a small town economy are on the line and the debt is crippling the company, then yeah, then typically the owners, the shareholders of the company have to pay their way out of that hole.
But here, we are the company! If slubicki isn't working for our interests, then how is he even allowed to legally work for for us? On top of that, the debt interest is a drop in the bucket. With higher oil prices, higher production, and a higher CAN dollar, the debt burden is less than this company has ever seen. Plus, OPTI still has to work with all the ex-opti folks at long lake who invested heavily into OPTI.....what will they do if Chris screws them over?
BASS, you keep saying that the debt is ridiculously high. At full rates with $500 mil + profit, the EPS is nearly $2. That would put the stock price at $20 min. With an equity value of at least $5b. A 50% debt equity ratio is not bad thing and to judge that ratio now, during start up, is not fair.
As for Lazard, I'm hoping to see something similar to this;
Dubai: 17 December 2010 ¿ Dubai International Capital LLC (¿DIC¿ or the ¿Company¿), the private equity investment arm of Dubai Holding, is pleased to announce today that headline economic terms have been agreed in principle with the Coordinating Committee of lenders (the ¿CoCom¿) representing the Company's financial creditors in regard to the restructuring of approximately $2.5bn of liabilities. The agreements in principle are subject to internal credit approvals by members of the CoCom and will require the support of the wider lender groups.
Under the agreed headline economic terms relating to $2bn of liabilities, creditors will extend their debt for six years and receive a two percent cash interest coupon on the restructured facilities. The relevant members of the CoCom represent 67% of these liabilities by value and have unanimously recommended the terms to their wider lender group.
An agreement has also been reached in relation to a $500m facility where creditors will extend their debt for four years, with an unchanged cash interest coupon. The relevant member of the CoCom has also recommended this proposal to its wider lender group.
The successful agreements are an important milestone and will allow for the implementation of the management team's long term business plan. This plan will maximise the value of the Company's portfolio of assets for the benefit of all stakeholders. The portfolio is sound and is performing ahead of management's expectations.
Following this agreement with the CoCom and after five years with Dubai International Capital, Chief Executive Officer Anand Krishnan has retired. Anand has steered the business through the economic downturn and has been instrumental in developing the portfolio companies and achieving this positive milestone in the restructuring process.
David Smoot, aged 41, currently Chief Investment Officer, has been appointed Chief Executive Officer. David has led the investment team at DIC for the last two years and has worked closely with the managements of DIC's portfolio companies to position them for future growth. David is Chairman of portfolio companies Almatis, Doncasters and Jordan Dubai Capital. Prior to joining DIC in June 2008, David was at Morgan Stanley where he held senior roles in principal investing and investment banking.
Giver