In a dream scenario, Chesapeake might find a last-minute buyer willing to pay a compelling value for some of its assets, which would give it the cash to pay off a meaningful amount of its debt. Chesapeake speculators are betting on a miracleĪnyone who bought or is considering buying shares of Chesapeake is gambling on the slight possibility that Chesapeake Energy avoids bankruptcy. That dilution level would make it nearly impossible for existing Chesapeake investors to earn a compelling return on their investment, barring an epic rebound in oil prices. ![]() If Chesapeake's creditors agreed to a similar recapitalization plan, the company would issue a substantial amount of new stock to them in exchange for meaningful debt relief. That's an enormous transfer of equity value, which will significantly dilute existing investors. Whiting would exchange roughly $2.2 billion of debt for 97% of the equity in the reorganized company, meaning existing shareholders would keep about 3%. Remember: Forgot password Become a member for free. Whiting Petroleum ( WLL) filed for bankruptcy in April after reaching an agreement with its bondholders on a restructuring plan. CHESAPEAKE ENERGY CORPORATION : Stock quote, stock chart, quotes, analysis, advice, financials and news for share CHESAPEAKE ENERGY CORPORATION Mexican Stock Exchange: CHKAQ Mexican Stock Exchange. We have one recent example in the industry where existing shareholders will retain some equity in a restructured oil producer. ![]() The most likely outcome would be to part with at least 95%, with the potential for it to relinquish full control, which would wipe out existing equity holders. That means, at a minimum, it would give up more than half of its equity in exchange for debt relief. According to the Bloomberg report, Chesapeake would hand over control of the company to senior lenders as part of its bankruptcy restructuring plan.
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