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TBE.DB - Twin Butte Convertible debentures


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"I wonder if the public and/or TBE.DB holders are entitled to review all the offers that the TBE management received? Do you know how this process goes?"

 

It is in the affidavit provided by the lending syndicate to the Court.

 

One needs to remember that the auction for these assets was mostly done in February. And in early March, they entered into exclusive negotiation with Reignwood.

 

We are now in September and the oil market is no longer trading below $30, fundamentals are improving and OPEC/Russia appear serious for a deal in Algiers at the end of the month. Trading values and numerous asset sales would indicate that prices are up and supportive of a corporate price between PDP NAV and 1P NAV for this company or $221 to $312 million. This company is also cash flow positive and debt will be declining during this process.

 

For management to not file for CCAA and on top of that to waive its 10 day grace period is nuts. Supporting this deal until the vote is understandable since they were contractually obligated. However upon rejection, to throw the keys at the bankers without any obvious effort to salvage the company is really hard to explain. There is value here and how to unlock it for the banks and debentureholders during this receivership process is the key. End result could be very surprising.

 

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Page 14:

 

"While the purchase price remains confidential, the Receiver can confirm that the purchase price is sufficient to pay all secured lenders in full (including potential lien amounts) and provide for a substantial distribution to the unsecured creditors;"

 

Bank Debt: ~$205m

Trade Creditors/Accounts Payable: $31.3m

Debentures: $81.1m

 

Up to you what your definition of 'substantial' is.

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