Afren (AFR) has defaulted as expected, and huge dilution is on its way for shareholders. I'm sorry for all genuine, non-abusive shareholders who are going to lose money in the company . I've been there, and anyone who has been in the market for a long time and claims differently is a liar. The Board of Directors are now duty bound to seek maximum recovery values for its creditors. Bonds currently trade at about 45c.
Reports on Bloomberg this morning suggest that shareholders in Afren (AFR) are about to be diluted to buggery as bondholders step up to the plate to prevent insolvency. You cannot say you were not warned by many of us on this website. 1p here we come.
From the FCA's spreadsheet of short positions required to be disclosed to it, the following details the most shorted shares (by net short position %) and if this position has increased (red), reduced (green) or remained unchanged (black) since a previous analysis HERE.
From the FCA's spreadsheet of short positions required to be disclosed to it, the following details the 20 highest single net short positions and the changes (red if short increased, green if reduced) since a previous analysis HERE.
I have bought another significant chunk of Afren debt this morning at 39.5c, flat (no accrued interest paid). It seems as though the bond market is not as delighted as the retail buyers of Afren shares over the upcoming restructuring of the Company and have dropped in price.
Both of these stocks were Bulletin Board darlings and both will ultimately deliver either total or near total wipe-out for shareholders. It just struck me that they have other things in common. And the price action as death approaches is the most striking.
I wrote yesterday that I doubted that Seplat would offer a deal that would prove acceptable to Afren's board and so it has proven. They have been told to sling their hook and off they go, having proved themselves to be time wasters.
You cannot say that Lucian Miers, the Great Waseem and myself did not warn you often enough! Bid talks with SEPLAT are officially off and Afren (AFR) shares have tanked to 5p. Next stop 0p. To those who responded with abuse, enjoy poverty suckers but it is still not too late to get out.
There has been a lot of nonsense spouted on the bulletin boards over Afren (AFR) and its current financial predicament. For some reason, retail shareholders seem to think that they can dictate what happens to their Company now, even though it is out of cash and cannot meet its debt obligations. They argue that the Company has very valuable assets and so someone will come in to save them by paying a large premium to the current share price.
Afren's (AFR) recent woes put it right up there with Quindell (QPP) as the must do short for February. Where Quindell has one deadline this month, Afren has two:
The bad news is that there is little or no value in the equity, which means that shareholders are going to lose all of their money.
I am a bondholder in Afren (AFR), having bought in size in recent days as the company has revealed its cash flow problems. I haven't bought very well, I'm afraid, paying far too much early last week at 41c, although I did add significantly at 34c, without paying accrued interest into the bargain. That means that, in the unlikely event that the coupon due on 31st January 2015 is paid within the 30 day "grace period", I'll have bought at the equivalent of about 28c.
From the FCA's spreadsheet of short positions required to be disclosed to it, the following details changes to net short positions (red if short increased, green if reduced) since a previous analysis HERE...
I covered Afren and where its shares are heading (down) in the earlier Bearcast HERE. Now to move on and I look at the lessons you can learn from this omnishambles for all of your investments, lessons about debt, cashflow, capex and more.
Just when you think that Afren (AFR) can’t get any worse it seems to have the ability to release another piece of news that trashes the share price!
I’ve been watching Afren (AFR) with great interest in recent weeks and am not convinced it is the basket case that some are saying it is, including TW as he explains HERE.
