RE:RE:RE:Forces been joined to the complaintThe problem in a nutshell is that PRE has elected not to make certain interest payments on its bonds and has entered into a forbearance agreement (to delay interest and principal due) with its noteholders (bondholders) and certain creditors (banks) until April 29, 2016.
When PRE missed the bond interest payments this triggered the bond principal amounts due and payable.(Very simplified)
I'm not sure what the missed interest or principal totals on the notes is due by April 29.
Pre has also missed certain payments to various banks/creditors on their revolving credit facility agreements triggering the principal amounts in excess of $1.43 billion due also by April 29, 2016.
I'm not sure what amounts of interest or minimum payment totals have been missed.
I can assume it's the 500 million that keeps being mentioned in various takeover deals but I'm guessing.
I'm speculating that the missed payments were orchestrated by PRE to force all parties to the negotiation table.
In theory if PRE makes all required interest and other minimum payments due by April 29, to the bondholders and other creditors, they CAN TAKE NO ACTION against the company.
PRE is suppose to be using this time (to April 29) to negotiate with it's bondholders and creditors a satisfactory rework of it's terms and obligations to stay in business. In other words for PRE to be given more time to make good on it's obligations for the benefit of its bond holders, creditors and shareholders.
It's too early for PRE i.e. the independent committee to accept a deal "wiping out shareholders" weeks before the April 29, deadline. It would be ludicrous for this committee to reject or dismiss other outside (more attractive to shareholder) offers to favour an inside management offer.
Noteholders and banks typically always re-negotiate to modify or extend deadlines (to larger companies) if they feel it's in their long term interest not to foreclose. Banks don't want to run oil companis for heaven sake!
For all I know PRE has the funds to make all the interest and other due payments but they are holding back to re-negotiate terms in light of lower oil prices and will make some payments when the negotiation process with all parties satisfied is over April 29.
For all I know PRE may be given another extension to May 31 on Aprl 29.
Look at NKO for heavens sake, they have been given dozens of extensions on their various financial obligations waiting for gas pricing terms from india and other legal issues that are taking forever. They're so broke there is nothing to be gained through bankrupcy.LOL
An outside offer to buy PRE and assume its financial obligations is only one solution, the other solution is an agreed upon re-negotiation with its bond holders and creditors buying time for oil prices to improve.
In time oil prices will improve. Does PRE get the time? This the question.