High Arctic Energy Services Inc T.HWO

HWO: don't think ppl understand the situation, have a read

[Resilience2]

From my post on investor village:

I am not saying it isn't strange but the math is clear: effectively all cash raised for HWO international will go to HWO.TO - which will remain liquid and listed on the TSX.  

 

The cash should be directly translated in share price + whatever HWO.TO is worth; ~ approximately $ 0,50.

 

Here's from the NR the ways investors can effectuate what they want:

 

• A shareholder election process whereby shareholders can:
  1. Do nothing, and receive their return of capital distribution as cash; total value in theory $ 0,75 +  $ 1 (assumed PNG-company exercise price) + $ 0,50 (whatever HWO.TO is now worth) = $ 2,25 -> in theory they have created value but this will depend on if this get's reflected in the shareprice   
  2. Elect to exercise their purchase rights (in full or in part); Not sure why ppl wouldn't elect option three but that can be a tax reason  
  3. Elect to use some or all of the funds to be received pursuant to the return of capital, toward the exercise of purchase rights; pay $ 0,25 cents extra to receive shares of HWO international and the now cash loaded HWO.TO worth around $ 1,50 -> if you now sell HWO.TO you will have gotten $ 1,25 back on a share price of $ 1,35 - effectively riding PNG for $ 0,10 cents

 

Again, I realise this will depend on the shareprice of HWO.TO  but this is the theory - and fantastic if it plays out like this.

 

Also people assume Cyrus is messing us over to get a higher sharecount but the factual indications of that are not really there:

• There are complications of going over 45% or even 50% Cyrus in the past hasn't been willing to go over - this was confirmed several times by the CFO Lance 
• Mike the CEO says HWO International (PNG) will be the backstop for buying shares people don't want - not Cyrus (check the telco), though other investors are likely able to buy more if they want (this could include Cyrus)
• If it works out as above, they have created value 
• They also have provided a way out for investors that don't want to own a private company 
• I am still unclear why it needs to be a private company and this is good to really grill Mike on (I wasn't able to be on the phone call so will try to talk to him him separately)
• This situation will also capitalise the CAD business 
• Likely the CAD business would have noted way below $ 0,50 cents book value if left without financing - what would it have been worth $ 0,15 maybe, anyone's guess but that would add up to $ 0,90 cents in total with the capital pay out - the above scenario gives much better value - also to those that want to monetize and not own a private company  

 

 

• Looks to me like most people don't understand the situation. Let's see what the HWO international exercise price is, but to the doubters: the higher it is the higher the cash balance is in HWO.TO and the higher your likely monetization is when just taking the capital return and sell the cash loaded TSX listed HWO.TO. 

 

R. 

 

[JonathanJSmith]

Resilience2: Thanks for your post. I think that most of the investors understand the situation very clearly You hit the nail on the head when you mentioned that you're unsure why the company needs to be made private. This is the elephant in the room. Furthermore, if the alloted value is greater than the RoC payout (which given the book value PNG/Canada spread is likely the case), why on Earth

[colourama]

Here's my back of envelope math here: - Assume exercise price for PNG private co is $1/share. - Assume $0.75/share in RoC - Assume value of remaining Canadian listed HWO (excluding cash proceeds from sale of PNG) as about $20million, or about $0.40/share. If the shareholder wishes to remain with the same share count in PNG private co, they will use the RoC, plus a contribution of an

[Stonksonlyup90]

Sure, that math shows there is value.. however, IMO value would be greater if PNG co was spun off into a publicly listed ASX. A) You wouldn't need to add additional capital into something you already own (potentially $0.25+) B) You'd have the optionality to sell whenever you'd like for certainly > $1.00 in the coming years as PNG LNG ramps  C) None of the above impacts the

[colourama]

Stonks - I agree. All speculation of course at the moment, but my point being that this feels like they are making the holding in PNG so unattractive for minority shareholders that we have to accept essentially book value for it, (if the exercise price is at book value). Is this surfacing value? Okay sure, based on today's share price. But feels really slimey as everyone has mentioned..

[Stonksonlyup90]

Certainly, all speculation. But it does make you wonder why they didn't just make an offer to take this whole thing private for $2.00 when it was recently trading at $1.00 (100% premium).. Perhaps the reason being that a white knight could have rode in with a better offer. The way they are currently trying to structure this they get to retain their 45% without the fear of a 'better offer

[Resilience2]

They couldn't raise the money. The environment sucks for that. This is a way that helps them pay for it (75% discount) so they only have to raise part of the buying cost.  Do rememeber though that Mike/CEO said PNG or new HWO international will be the back stop for buying shares not bought, not Cyrus.  R. 

[Northforce13]

That's a pretty good point