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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Jurgis Bekepuris who wrote (56562)	1/4/2016 10:59:03 AM
From: E_K_S	Read Replies (1) \| Respond to of 79147

It's a planned Chapter 11 workout. Bond holders get 80% of new equity paid out at PAR plus accrued interest. Current shareholders get 4% of that issue, the rest goes to management and re-structure group. A total of $800mln in unsecured debt impacted. Proceeds to pay off and re-finance credit facility. They announced some type of JV partner agreement w/ Texegy where SFY got $65mln cash but do not know the details. The key will be if the new equity is priced high enough to get back my initial investment in the bonds. My cost for the bonds were around $0.45 to the $1.00. That Louisiana property at one time was valued at/near $1bln so a JV deal is better than a fireside sale. If management can keep debt low, continue to pump/sell producing wells and through the JV have new revenue streams they share w/ a partner they s/d be able to survive. They will need oil/NG to move higher to get the new equity stock issue to price higher. The re-structure group did well w/ a take away of 5% of the asset value and the current management needed to stay in place to maintain operations. I guess I would like to see the large bond holders and/or activist investor to get some board seats to protect the new shareholder's interests. Position small so will continue to hold and watch to see how this work out is priced when new equity trades. My plan is/was to take out my initial investment if the new price is high enough but I suspect I will have to hold new shares until other value investors move into the stock. EKS