High Arctic Energy Services Inc T.HWO

Very interesting

[auburn2]

Great quarter in terms of EBITDA generation. Very happy with that. However, this is what interests me especially:

"cash proceeds of the sale of High Arctic International"

In effect, they are selling the PNG division to current shareholders who choose to participate in whole or part, and using the proceeds to build up fresh cash on the balance sheet of the listed entity?

[cochrane29]

Yes just read this. What does this mean? Sounds like they might offer a second special dividend so we either stay private on PG or walk away option at the current SP for PG. sounds ridiculous cheap if at currant share price for PG.

[AusInvest]

My understanding is that they plan on a rights offering to shareholders of the PNG business, giving us the right to purchase stock in the private business and the proceeds from the rights offering will go to the North American company.  I am definitely interested in purchasing the PNG business but I am also worried about the private company structure and the low insider ownership in the

[Marley66]

I Hope they will put more color during the conference call, because right now things are really not clean.

[colourama]

I can't imagine that they would set the exercise price for buying in to the PNG part below book value. What floor would that put: about $1.50 as the exercise price? I think we comfortably realize in excess of total book value of $2.30 for sum of parts for those not electing to exercise their right to buy in. Suppose as an extreme thought experiment that only one shareholder exercises their

[Possibleidiot01]

There are two words in here that stick out for me . First word "IF" If the reorganization proceeds, it is expected to result in: The payout to shareholders of $38.2 million, equivalent to approximately $0.75 per fully diluted share, by way of tax efficient return of capital distribution, The sale of High Arctic International to existing shareholders who opt to participate

[JonathanJSmith]

It looks like these guys are taking the company private whether we like it or not. So much for voting on this "substantive" change in corporate structure. Furthermore, they don't elaborate on what assets are being transferred to the "International" business; what about the remaining cash after the RoC distribution?  Colorado assets - did they just vanish? So they are

[AVALONSHARK]

What am I missing here? Anybody who currently owns Hwo.to already owns the PNG business. The ROC is just cash that shareholders own. How can shareholders buy what they already own?.   They can spinoff, do a salvage sale or anything but the proceeds should be going directly to shareholders. Really, what am I missing here !!

[DudeRancher1953]

Avalon, We still don't know the details of the rights offerring regarding International. I have some experience with rights offerings related to the same entity equity. These, sometimes deep-discounted, rights offerrings basically motivate sgareholders to exercise their rights to avoid dilution. If a shareholder does not exercise their rights there is often a clause that allows the

[JonathanJSmith]

Dude, If what you say is true, then Cyrus will own more than 50% of the company following the rights option (assuming they oversubscribe - which they will). Minority shareholders will get screwed.

[JonathanJSmith]

I know, it's ridiculous to say the least. I think the only reason they're doing this is to give current shareholders a way out of owning a private company. Shareholders will not be receiving any cash from the sale of the "international" business. What will happen is that it will go in the coffers of the remaining Canadian entity whereby the entity can do what it pleases with the

[AVALONSHARK]

They are walking on extremely thin ice. Everyone knows the potential of the PNG business and trying to spin it off (read sell it) to existing shareholders at a low valuation can initiate lawsuits. Really boils down to the independent valuation of the PNG business. The piece is profitable with good assets, no competition and assured market with the start of  Papua LNG project. I'll be

[impega]

Agree with Avalonshark. The key is a fair Independent valuation of PNG assets. Also how does one eventually exit the private PNG company if they choose to buy in now? What is the long term exit strategy from a private company? Is there any market at all?