Frontera Energy Corp T.FEC

The Restructuring Plan

[kcac1]

I thought they had already restructured the Company, breaking it into 3 parts with Frontera Guyana and Puerto Bahia, now debt free subsidiaries, thus obviously easier to sell?  I wonder what they are doing now? This was hidden in Risks and Uncertainties.  Just seemed a little odd the way this is worded.  Any thoughts?

"During the fourth quarter 2023, the board of directors of the Company approved a restructuring plan (the “Restructuring Plan”), designed to drive operational efficiencies, reduce operating costs and better align the Company’s workforce with current business needs, top strategic priorities, and key growth opportunities. The Restructuring Plan includes the reduction of the Company’s workforce by approximately 16%. The Company may encounter challenges in the execution of these restructuring efforts that could prevent it from recognizing the intended benefits of the Restructuring Plan or otherwise adversely affect its business, results of operations and financial condition. As a result of the Restructuring Plan, the Company has incurred and may continue to incur additional costs in the short-term, including cash expenditures for employee transition, notice period and severance payments, employee benefits and related costs. These additional expenditures could have the effect of reducing the Company’s operating margins. The Restructuring Plan may result in other unintended consequences. If the Company experiences any of these adverse consequences, the Restructuring Plan may not achieve or sustain its intended benefits, or the benefits, even if achieved, may not be adequate to meet the Company’s long-term profitability and operational expectations, which could adversely affect the Company’s business, results of operations and financial condition. See the “Liquidity and Capital Resources” section on page 33 for additional detail on the steps the Company has taken to mitigate or manage some of these risks. However, the situation continues to be dynamic and highly uncertain, and the effectiveness and adequacy of such measures cannot be determined at this time. The Company also continues to consider all options to enhance the value of its Common Shares and in so doing may consider forms of strategic initiatives or transactions, although there can be no assurance that any such initiative or transaction will occur or if it occurs, the timing thereof." 

[SportyJ]

Kcac, the restructuring wasn't hidden (see Nov 9, 2023 NR).  This restructuring was an admission by the BOD that Frontera's operating and administrative expenses needed to be brought in line so the company's financial metrics could be more favorably compared with its peers. The 3 separate business segments you mention are not debt free.  Maybe they are for segment reporting

[Frank007]

You are wrong sporty ...the debt 400 milion is finance with no calataorol out of Switzerland 7.85% bond maturity 2028 ...B+ rating check it out ..

[kcac1]

Sporty, You are apparently referring to the 3rd Qtr MD&A, were they refer to the Restructuring as "Subsequent to the quarter", which I assume refers to all the known restructuring they did earlier in the year Then in the 4th Qtr., MD & A which I pasted from, they stated "During the fourth quarter 2023, the board of directors of the Company approved a restructuring plan

[SportyJ]

de Alba stated on Nov 9, 2023: Importantly, during the quarter, the Company continued to drive costs out of its business, reducing its G&A by 4%.  Building on this positive momentum and to better position the Company for sustained long-term success, subsequent to the quarter, Frontera's board of directors approved a restructuring plan that will improve organizational and operational

[kcac1]

I like your Anology. And I agree with why pay high interest to borrow when you have cash? Maybe, they want to conserve cash to justify paying Catalyst, Gramacy and us a higher dividend this Qtr and maybe they know the loans will be short term as they may know a deal of one of the 3 parts is close?? However, I think there was some thought from de Alba and group on this. It is rare for bond holders