Although HDR is not struggling at the moment, I think that long term the writing is on the wall. With Ching revenue well down, Woodside dragging their heels on Tiof and Uganda revenue several years away, HDR would be in a difficult cash position within a couple of years.
With HDR recently trading at about half the placement price the chance them raising money through an issue in the future is close to zero, particularly in London. Add in the possibility of banks being nervous about the 100m credit facility and you have a potentially bleak picture.
Along comes Tullow with a reasonable but not great offer. The board could be looking at this as a cheap put option- if Kingfisher and/or Nzizi were dry, Tullow would still be locked into buying HDR with a $120m break fee.
If Kingfisher and/or Nzizi strike oil, if Ching remediation works OK and Tiof gets the go-ahead before December, the HDR board could say that things have materially changed, here's your $14mill, thanks but no thanks.
This may be a smarter strategy than we had appreciated - guaranteed pon the downside, and the possibility of selling to a higher bidder or walking away if things go well.
- Forums
- ASX - By Stock
- hdr cash position
HDR
hardman resources limited
Although HDR is not struggling at the moment, I think that long...
-
- There are more pages in this discussion • 3 more messages in this thread...
You’re viewing a single post only. To view the entire thread just sign in or Join Now (FREE)
Featured News
Add HDR (ASX) to my watchlist
Currently unlisted public company.
The Watchlist
SER
STRATEGIC ENERGY RESOURCES LIMITED
David DeTata, Managing Director
David DeTata
Managing Director
SPONSORED BY The Market Online