GREY:CLLZF - Post by User
Post by
strzelinon Nov 23, 2014 12:49am
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Post# 23155882
Will Connacher restructure their balance sheet ?
Will Connacher restructure their balance sheet ?
It's been a long time I look at Connacher performance...
I must say POD1 production rate above 9200bbl/d (near emulsion handling maximum capacity -as per RBC Jason Bouvier) is very impressive. $200 million from the sale of Gusela's refinery was not totally wasted.
Unfortunately despite some positive operational results CLL's ability to service interest on its debts has recently deteriorated to the point of no return and financial restructure as ERTguy predicts is likely to happen in the next year.
How will it looks like?
Nobody knows exactly but there are some predecessors who tried this path before.
Most recently Arcan (ARN) proposal of financial reengineering of their debt (which fail for different reasons) included:
1.Changing the company name and swapping one to one the old share with the new one (+ the warrant)
2. New company would hold only 12.5% of all Oil and Gas assets passing the 87.5% company assets to the financiers of this operation.
3. Financier (Aspenleaf) would pay of all bond (and convertible) holders about 80 cents for 1 dollar of bond face value.
Interesting thing for CLL shareholders is how ARN share price responded on the news.
Initially the ARN shares dropped from 48 cents to 28 cents.
For better or worst (depends of the point of you) the proposal failed and today ARN is trading
at 8 cents, losing over 80% of its market value.
You guys can draw your own conclusion in regards to the effect of restructure on CLL share price. As for myself I would not put my retirement funds to see what happens here.
GLTA