Beating a Dead HorsewAOI has been touted and peddled to investors and still going no where but down.
The stock is wrapped in almost $1 billion (usd) of debts. The international syndicate of banks demanded Prime’s RBL line of credit be cut back by $300 million. AOI had to get cash advances to 2021 by preselling its entitlement of revenue. It is like someone asking their employer for salary advances for the next 6 months to pay off some creditors.
AOI’s 50 percent investment in Prime will need to be marked-to-market by year end. That would likely be in hundreds of millions. So far, the more than $300 million in dividends and depletion of proven reserves and drop in oil prices have sharply reduced the value of Prime,
A value trap stock.