15225 replies to this topic

[Polla]

I agree with you... this would play out as a debt for equity swap.... I can't see any legal basis for creditors to take up 80% equity and still have all the debt being owed to them....  This swap will enhance all current shareholders positions if the majority of the debt is gone and they still own 20%..

I offloaded and reloaded a few times today.... sitting with the same quantity of shares in my portfolio as this morning but with an extra healthy amount of cash on the side.....

[Polla]

Why is it over? By having this agreement SNH has until 2028 ( 2026 with two extension of 1 year each) to pay the debt. Further there is a reduction in interest rate so for me is actually a good thing because indeed stabilizes the debt payment and will allow PEPCO to reach its Eur 1 bil EBITA and for PPH to grow the business in Brazil. I was more worried lenders not willing to extend the debt or request a much higher interest rate. For me this makes sense to give 80 % of the company as a guaranty. I did not read anywhere on the sens that the lenders get 80% of the company and then SNH still has to pay the debt with interest. My understanding is that in 2026 SNH will review the debt and again either extend it of pay it off. Interested to read others comments!!

I agree with you... this would play out as a debt for equity swap.... I can't see any legal basis for creditors to take up 80% equity and still have all the debt being owed to them....  This swap will enhance all current shareholders positions if the majority of the debt is gone and they still own 20%..

[CasualTrader]

So the question is. Is it worth holding on, which I don't mind doing. Or should one just cut your loses and take the hit. Won't see this as giving advice. Considering it has fallen so much already and I missed the boat on off loading quickly.

[DeltaHedge]

Yes, correct, if during next 5 years assets will grow in value, at least a bit more of tot. debt.

It's a long wait, metaverse type duration wait lol.

[Squideye]

SHFF @ https://www.sharenet...0&seq=89&scode=

[Tolly12]

Well said but I have a slight variation:

 

Today 100% shareholders with negative NAV and facing bankruptcy expected returns Zero.

Tomorrow shareholders 20% of company with survival prospects until 2028 (2026 with 2 x 1 year extensions) to realize a return for the shareholders.

 

Yes, correct, if during next 5 years assets will grow in value, at least a bit more of tot. debt.

[DayTraderDad]

To summarize:

 

As of today current shareholder own 100% of Steinhoff with 10 bil. € expiring in 2023.

Tomorrow shareholders will own 20% of Steinhoff and lenders 80% with 10 bil. € expiring in 2026.

 

I know sounds crazy but when you have negative equity lenders can do almost all they want.

Well said but I have a slight variation:

 

Today 100% shareholders with negative NAV and facing bankruptcy expected returns Zero.

Tomorrow shareholders 20% of company with survival prospects until 2028 (2026 with 2 x 1 year extensions) to realize a return for the shareholders.

[Squideye]

 ....."Protea Capital Management CEO Jean Pierre Verster said the announcement by Steinhoff made it clear that "time has run out for shareholders" and that control of the group will now transfer to the creditors of Steinhoff through this proposed transaction.

 

"For all practical purposes, Steinhoff should have been handed to its creditors long time ago," said Casparus Treurnicht, portfolio manager and research analyst at Gryphon Asset Management.

 

"They always had the final say in what happens to the business next and in all honesty, they’ve been acting very polite to keep the business running as it does. And here they are still being nice by offering 20% to existing shareholders. In my honest opinion, Steinhoff shareholders must simply vote against the transaction, hand over all their shares and move on. They are not going to get anything out.".....

 

https://www.news24.c...ontrol-20221215

[DeltaHedge]

To summarize:

As of today current shareholder own 100% of Steinhoff with 10 bil. € expiring in 2023.
Tomorrow shareholders will own 20% of Steinhoff and lenders 80% with 10 bil. € expiring in 2026.

I know sounds crazy but when you have negative equity lenders can do almost all they want.

I'd rather buy BTC

[Tolly12]

Thanks good point agree they getting 80% and still have outstanding debt but shareholders still keep 20% which at present with the negative NAV its zero with.

 

To summarize:

 

As of today current shareholder own 100% of Steinhoff with 10 bil. € expiring in 2023.

Tomorrow shareholders will own 20% of Steinhoff and lenders 80% with 10 bil. € expiring in 2026.

 

I know sounds crazy but when you have negative equity lenders can do almost all they want.

[DayTraderDad]

If this deal won't be voted by shareholders, the lenders will have 100% of Steinhoff, and current shareholders 0%.

If the deal will pass Steinhoff will be delisted. I don't think so much people wont to be invested in a delisted company.

 

Last point, based on SENS, seems that the debt won't be cancelled even if lenders will own the 80%.

 

Where you see in SENS that debt will be cancelled with this swap?

80% of the company just to extend debt.

Thanks good point agree they getting 80% and still have outstanding debt but shareholders still keep 20% which at present with the negative NAV its zero with.

[Tolly12]

Ok thanks so effectively massive dilution in shares. Similar to issuing new shares. Does seem like a sweet deal for the creditors. Effectively they can't trade those shares though so it means that once assets are sold that they will effectively get the proceeds which in theory will be a payment towards the debt and same with any distribution of profits/dividends? 

 

Yes, I guess creditors will try to take as much as possibile interests for the next 3-4 years and then will sell all the assets. In that future case, debt free.

[CasualTrader]

If creditors wolud agree to exchange 10 bil € debt with 80% of Steinhoff that wolud be a very good outcome for current shareholders.

The point is that creditors will own 80% of new shares, 20% will be assignd to 'current' shareholders, but the debt pile will remain in the balance sheet. That's the reason of today's -70%.

Lenders will continue to take 10% interests per year and will be the new company owner.

Ok thanks so effectively massive dilution in shares. Similar to issuing new shares. Does seem like a sweet deal for the creditors. Effectively they can't trade those shares though so it means that once assets are sold that they will effectively get the proceeds which in theory will be a payment towards the debt and same with any distribution of profits/dividends? 

[Tolly12]

Have to say this is a bit confusing. Whether it is voted for or not creditors get either 100% or 80%. Why then is there an extension to 2026? I would think getting 80% or 100% of the company would in fact mean they are in essence trading the debt for the ownership of the company. 

 

If creditors wolud agree to exchange 10 bil € debt with 80% of Steinhoff that wolud be a very good outcome for current shareholders.

The point is that creditors will own 80% of new shares, 20% will be assignd to 'current' shareholders, but the debt pile will remain in the balance sheet. That's the reason of today's -70%.

Lenders will continue to take 10% interests per year and will be the new company owner.

[CasualTrader]

If this deal won't be voted by shareholders, the lenders will have 100% of Steinhoff, and current shareholders 0%.

If the deal will pass Steinhoff will be delisted. I don't think so much people wont to be invested in a delisted company.

 

Last point, based on SENS, seems that the debt won't be cancelled even if lenders will own the 80%.

 

Where you see in SENS that debt will be cancelled with this swap?

80% of the company just to extend debt.

Have to say this is a bit confusing. Whether it is voted for or not creditors get either 100% or 80%. Why then is there an extension to 2026? I would think getting 80% or 100% of the company would in fact mean they are in essence trading the debt for the ownership of the company. 

[Tolly12]

Why is it over? By having this agreement SNH has until 2028 ( 2026 with two extension of 1 year each) to pay the debt. Further there is a reduction in interest rate so for me is actually a good thing because indeed stabilizes the debt payment and will allow PEPCO to reach its Eur 1 bil EBITA and for PPH to grow the business in Brazil. I was more worried lenders not willing to extend the debt or request a much higher interest rate. For me this makes sense to give 80 % of the company as a guaranty. I did not read anywhere on the sens that the lenders get 80% of the company and then SNH still has to pay the debt with interest. My understanding is that in 2026 SNH will review the debt and again either extend it of pay it off. Interested to read others comments!!

 

If this deal won't be voted by shareholders, the lenders will have 100% of Steinhoff, and current shareholders 0%.

If the deal will pass Steinhoff will be delisted. I don't think so much people wont to be invested in a delisted company.

 

Last point, based on SENS, seems that the debt won't be cancelled even if lenders will own the 80%.

 

Where you see in SENS that debt will be cancelled with this swap?

80% of the company just to extend debt.

Edited by Tolly12, 15 December 2022 - 02:50 PM.

[DayTraderDad]

It's over boys, was fun but now it's time for a smoke, plik and a pancake

Why is it over? By having this agreement SNH has until 2028 ( 2026 with two extension of 1 year each) to pay the debt. Further there is a reduction in interest rate so for me is actually a good thing because indeed stabilizes the debt payment and will allow PEPCO to reach its Eur 1 bil EBITA and for PPH to grow the business in Brazil. I was more worried lenders not willing to extend the debt or request a much higher interest rate. For me this makes sense to give 80 % of the company as a guaranty. I did not read anywhere on the sens that the lenders get 80% of the company and then SNH still has to pay the debt with interest. My understanding is that in 2026 SNH will review the debt and again either extend it of pay it off. Interested to read others comments!!

[DeltaHedge]

Maybe a silly question but why would there still be buyers for the share?

Good question, maybe some taking a gamble for it to pop back to 1.2, let's wait to see what others and analysts price it at now.

[CasualTrader]

It's over boys, was fun but now it's time for a smoke, plik and a pancake

Maybe a silly question but why would there still be buyers for the share?

[DeltaHedge]

...

It's over boys, was fun but now it's time for a smoke, plik and a pancake