Stop This Nonsense, and Defer the Meeting for 3 WeeksThere are too many issues here, to let TBE management continue with the "Vote Yes or else" intimidation, and quickly sell this for cash, to Reignwood. Do the proper thing, and delay this vote for a few weeks, and let's get the different stakeholders to sit down at the table.
One day, TBE is telling us about the great NAV of the stock, and next day, is telling us that this the only option: a fire-sale at the bottom of the market.
Oil prices are slowly coming back. Canada is a producer of alot of high cost oil, that isn't that economic. But without the high cost oil, providing a stable production base, there would be a critical supply shortage, right now. You can't continue produce a product for less than the total cost. Something has to give, sooner or later.
The only way for shareholders to recover more value, is to keep this company going. There may be some recapitalization needed, but the hope is eventually the shares can rise in price. Selling for cash, at the bottom of the market, only guarantees a capital loss. We want to minimize our capital losses.
Debenture holders trump shareholders: that is the way it works. The only way Reignwood can get this deal to work for them, is if they steal the debenture holders rightful value. If Reignwood had to pay the debenture holders the value stated in the original debenture document, they wouldn't do this deal. They are trying to get the company for cheap. The only question is will this company end up as another IPO in one year's time, after oil prices spike up? And who will be involved with this new IPO, from the current management team?
Bankruptcy is always a possibility. First thing that would happen is a cancellation of all packages. Various hedges would be cancelled. Then there would be a booting out of Reignwood's $5 million fee: "sorry, we are broke, go pound sand. Thanks for coming out."
The receiver would have to review all options. Since the market is now improving, they would have to go through an auction process again, to ensure a fair deal can be reached. We'll need to remind National Bank about their success rate in these bankruptcy dealings: they have done a good job of destroying their loans and collecting very little back, based on the last year's dealings with Spyglass and Hyperion. If I was a National Bank shareholder, I would be questioning their strategies, during this worst oil downturn in 30 years. Their loan write-downs are their own fault, when trying to sell in a depressed market.
Can TBE be saved? It requires some cash injection. We might have to pass the pot around, and raise some money, if it means having the chance to salvage a larger portion of our investments. But a rising price forecast, is definitely required. It is interesting that current management, doesn't want to give the shareholders the chance to try and save their investment, but prefers to sell the company in a private deal.
Other stakeholders have a concern too: Revenue Canada wants to know about those questionable deductions. Alberta Government wants to see some wells abandoned. Everything is doable, given a higher price forecast. We could even let Reignwood participate in a re-cap: it would save them some administrative hassles, with trying to run a private company. It is just interesting that a company that has no oil and gas experience, is trying to diversify into oil and gas, but will let the current management team, continue to run the assets.
Let's get this sorted out.