OTCPK:ARNBF - Post by User
Comment by
freenpvon Jun 23, 2014 10:53pm
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Post# 22687988
RE:a surprisingly generous deal....
RE:a surprisingly generous deal....
teevee wrote: given current metrics on what proved producing is selling for, I expected about a 35-40% haircut for debentures and zero for equity. I am surprised equity was thrown a bone (12.5% equity in assets via spinco), and that debenture holders were offered about $.85 on the dollar.......I would take this deal and run as fast as I could. With a deal this generous, it is very unlikely another company will step up.
its not generous. heres why: if you run the numbers assuming equity is about a zero and the convert debt is pro rata new equity, then convert holders get way more by voting no.
company will exit the year with 150mm senor debt and 160mm converts and 4200 production with a bit of upside. putting a 80k flowing multiple on the production, which is reasonable considering edmonton light is getting 100$ a barrel, the converts should be getting at least. your prices in a takeout scenario would mean the deal is done at 60k per fowing with large reserves on top of that, which highlights just how bad this deal is for convert holders.