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+--- Thread: Regarding the shelf registration (/showthread.php?tid=2933)
Regarding the shelf registration - Optionray - 03-02-2013
If a company such as XOM wanted to pay 2 billion to IOC for 20% of the company, would IOC be required to issues shares? Or, if a company wanted to purchase IOC in an outright stock swap, say 2 shares of XOM for every share of IOC, would the shelf be required to have shares available? Using the first example, if 3 shares of XOM equates to $250 for every share of IOC - Affectively valuing IOC at 10 billion, Next, IOC increases the share count from 40 million to 50 million, then XOm does a stock swap of 2 shares of XOM for every share of IOC and receives 10 million shares of IOC, still valuing the company at $10 billion and effectively making the value of each IOC share of IOC at $180.00.
RE: Regarding the shelf registration - Putncalls - 03-02-2013
Why does IOC file a shelf registration after a CC where they said there were no cash flow issues?!?! If they need the cash would that not be illegal?
RE: Regarding the shelf registration - TxPm - 03-02-2013
Just bc they don't have cash flow issues now doesn't mean they won't need more money in the future. Some of the bidders might be asking for IOC to finance part of the project that they want to raise money for. What better way than through unsecured loans or preferred securities?
RE: Regarding the shelf registration - Palm - 03-02-2013
Also, once they monetize and book reserves, what will happen to their gearing ratio?
RE: Regarding the shelf registration - SamAdams - 03-02-2013
'Palm' pid='18195' dateline='<a href="tel:1362182 Wrote:Also, once they monetize and book reserves, what will happen to their hearing ratio?
Yes. Their problem will be they are under levered post deal. Meaning they will borrow money to help finance either part of the project or exploration. Not something they could or should do without the deal.
RE: Regarding the shelf registration - Optionray - 03-02-2013
(03-02-2013, 10:31 AM)SamAdams Wrote:
Palm dateline='<a href="tel:1362182267">1362182267</a>' Wrote: Also, once they monetize and book reserves, what will happen to their hearing ratio?Yes. Their problem will be they are under levered post deal. Meaning they will borrow money to help finance either part of the project or exploration. Not something they could or should do without the deal.
So, with that in mind, wouldn't it be safe to say that they are favoring one of the bids over the other. So, much so, they are getting things aligned. Now, if that is the case, what kind/type of deal would you expect if they needed say 500 million? My bet would be a deal with XOM, with the money being used for the pipeline (remember the tee), and the condensate plant! Any other ideas?
Also, if you lookup the definition they have up to two years to issue and usually is done when the need for cash arises or when conditions are favorable (like when the stock climbs after a sale down). Meaning I don't expect any issuance, if any, until after a sale down and the pps has risen significantly.
RE: Regarding the shelf registration - Palm - 03-02-2013
They are anticipating all offers and will favor the best deal; they are ready for all. Pretty standard filing they did
RE: Regarding the shelf registration - SamAdams - 03-02-2013
A share issuance would be negative. This will not happen now. They will be asked or anticipate being asked to finance some part of the final deal. Who knows, maybe they will do a secondary, but at $200+ a year from now for exploration or other asset driven opportunities.
RE: Regarding the shelf registration - bertl05 - 03-02-2013
In any case there would be no need to access the capital markets until after FID anyway, which aint going to be next week or month. There are no major funding needs until post FID. At that time they should recieve a decent amount of upfront funds. Alos I agree with Sam, they wouldnt want to sell equity now at this PPS anyway, and they dont need to now.
RE: Regarding the shelf registration - CesiumFormate - 03-03-2013
We need to keep in mind that it is an open application for mixed securities (debt or equity). With IOC's current capitalization, there is no reason for them to sell common stock before an announcement, and if they get the right deal with payments up front, there is no reason to sell common stock afterwards. If I were the finance director, I would sell convertible bonds to finance their share of the plant project once they have FID and use their share of cash either as a special dividend, or to finance further development. My guess is that if they sell stock prior to an announcement with no need to do so, they risk having a shareholder suit. I believe what will happen is that we will get a partner announcement which will be followed by an FID announcement that will be combined with a convertible bond private placement sale which will finance the plant. If you are cynical, you might argue that a private placement prior to a partner announcement would be a good way to reward customers of the IB's with a guaranteed upside. I personally do not believe this would happen because I am sure this stock is being watched closely by the SEC due to the heavy shorts and manipulation. It would be too risky for the IOC board and the IB's to do any common stock or convertible debt placement prior to a partner announcement. If history repeats itself, those convertible bonds will get converted to common stock after a nice run up in the stock and everyone will be happy, but diluted.