Falcon Energy   

FALCON ENERGY - UNDERVALUED WINNER TOP STOCK PICK

LOAD UP ! CEO OWNS 54% IN FALCON !!!

 

this falcon baby forming a bottom .. and waiting for catalyst to rocket

 

Falcon surging soon

 

side note: I mentioned Ezion because the new CFO Maggie Lam was the Financial Controller in Ezion in 2015-16. This was the period that Ezion came up with the brilliant collaboration with DBS to issue those lower-yield DBS-backed Ezion bonds. FE will be in better hands if she is able to tap on her past experience in Ezion.

 

You are sharp, very good point
https://www.bondsupermart.com/main/bond-info/bond-factsheet/SG6SJ3000005

Being able to obtain a Bval yield of < 2% is elite-class. In fact, the bid price is above par at 101. It is either a sign of investor confidence or the possibility of refinancing Falcon' s bonds/debt in the near future with some bank backing eg. Ezion has a special 3.65% bond trading at 101 because that bond is backed DBS' s committed funding.

 

This is more important than oil surging above US$60. In this aspect, if the low Falcon bond YTM is sustainable, Falcon' s future cost of financing will drop and the company will be in the same league as top Norwegian competitors, armed with the capability to capitalize on distress assets in their industry. Taking clue from the bond price (mid-90s level) when it started to drop six months ago, the share will easily return to the pre-October 2016 levels of $0.16-$0.188.

 

kangaroo11      ( Date: 15-Apr-2017 00:41) Posted: Yes, its bond prices have already recovered and surged >30% this week.

 

Yes, its bond prices have already recovered and surged >30% this week.

 

You are right..who has $20m....even how many $200k sitting around Looks like oversold Rocket coming

 

Sounds Chinese.

Maybe you may also want to think of the intangible?

FE can throw out the shares to us at 0.13, but will we have enough to buy up $20M? Its probably more predictable, calculated, nimble, fast  and straight forward to sell to this Mr Zhang.

Not many of us can have $20M sitting ard to buy something. What he may bring to the table are his business contacts, network and opportunies. If FE sell to retail, we are unlikely to value add in that space as well.

 

 

 

Check the queue-track of CHO and FE... ...

• At one stage, there were 100 lots at the best Ask-price for both counter concurrently.
• Both sellers withdrew their unsold selling-volume at about the same time
• Then both counters went on trade up 5+% today

Were the sell-queues there to block the upside (for accumulation or shorting) for CHO and FE?

Who is Zhang haibo? Why was he given the sweet deal of $0.13 CHO at the expense of FE shareholders?

danger      ( Date: 12-Apr-2017 16:53) Posted: YAWN ... YOU THNK AND WROTE TOO   MUCH CRUDE OIL : $53.67 !

 

YAWN ... YOU THNK AND WROTE TOO   MUCH

CRUDE OIL : $53.67 !

 

Regulators should investigate the buyer. Why weren' t existing Falcon shareholders given the chance to buy the CH Offshore shares at $0.13. Selling CH Offshore at $0.13 is like stealing from the Falcon Shareholders. The collapse in Falcon back to 11 cents proves that the stake sales was not at the best interests of CH Offshore shareholders.

Next, regulators should also investigate the leak of the deal with trigger the wild swings in the share price before and after the sale of CH Offshore.

MarcPh      ( Date: 10-Apr-2017 08:51) Posted: There are three things fishy with Falcon The CH Offshore stake-sale was likely leaked. Such sales will not happen overnight. When insiders heard about partial sales of their stake in CH Offshore, the share price of Falcon surged from 11cents to 15 cents within 1-2 weeks. When insiders knew that disposal was a steep discount to CH Offshore&rsquo s last done price. Falcon plunged back to 11-12 cents before the Trading Halt. The sale price of CH Offshore is 55-60% discount of the last traded price. It was very crazy. At about 13-14cents for CH Offshore (last done 28 to 30 cents), there would certainly be plenty of potential buyers who are willing to pay 13 cents for CH Offshore. Selling half of the quantity at 30% discount will probably fetch Falcon the much needed $20mio. Why is the sale price so dirt cheap? Most of all here don&rsquo t mind buying CH Offshore at 13 cents. The boss is really broke. He was once the richest 40 in Singapore and today, he cannot even face a simple rights-issue (being majority shareholder) to raise $20mio for Falcon.

 

I concur.

Auditors can demand two potential impairments.

One is for the vessels, because Swiber and Ezra had huge write-downs.

Next will be the carrying value of CH Offshore. To avoid immediate CH Offshore value write-down, Falcon has timed the sales after 31st March (closing the quarter), so i think the next results will not be very ugly. With ample time before next financial reporting closing 30th June, to push CH Offshore price back to 26-28 cents level, Auditors and CIMB Bank (lender of the pledged shares) might accept 26-28 cents valuation.

 

Therefore many will think in the same frequncy and 11 cents appears to be fair value, judging from the maths and the strong buy-bids below 11 cents.

pnuklis      ( Date: 12-Apr-2017 13:56) Posted: There is more than 50% impairment of assets in O& G industry and on that basis the price is right. This is what happens when companies do not take regular impairments of assets with market changes. We all have to swallow the bullet even if the reality is harder

 

There is more than 50% impairment of assets in O& G industry and on that basis the price is right. This is what happens when companies do not take regular impairments of assets with market changes. We all have to swallow the bullet even if the reality is harder

 

Earlier reference:

MarcPh      ( Date: 10-Apr-2017 10:13) Posted: Falcon is back at 11 cents this morning. Now we are sure that last week' s selldown from 15 cents was because of the insiders were shocked by the steep discount of CH Offshore sale-price. AND it means that the surge from 11 cents to 15 cents two weeks ago, is also because these people heard about a potential stake-sale but never expect the price to be so low.   SGX regulators should act. MarcPh      ( Date: 10-Apr-2017 08:51) Posted: There are three things fishy with Falcon The CH Offshore stake-sale was likely leaked. Such sales will not happen overnight. When insiders heard about partial sales of their stake in CH Offshore, the share price of Falcon surged from 11cents to 15 cents within 1-2 weeks. When insiders knew that disposal was a steep discount to CH Offshore&rsquo s last done price. Falcon plunged back to 11-12 cents before the Trading Halt. The sale price of CH Offshore is 55-60% discount of the last traded price. It was very crazy. At about 13-14cents for CH Offshore (last done 28 to 30 cents), there would certainly be plenty of potential buyers who are willing to pay 13 cents for CH Offshore. Selling half of the quantity at 30% discount will probably fetch Falcon the much needed $20mio. Why is the sale price so dirt cheap? Most of all here don&rsquo t mind buying CH Offshore at 13 cents. The boss is really broke. He was once the richest 40 in Singapore and today, he cannot even face a simple rights-issue (being majority shareholder) to raise $20mio for Falcon.

 

11 cents is fair value as long as the company need not offload their vessels. We have many industry examples of oilfield services vessels are very sold at > 60% discount of their books value.

Valuation Perspective

Based on the last financial report:
The NAV of the company is US$0.35 (appx S$0.49) &ndash Equity Account $284mio. There are two if(s),

• The value of plants & vessels $393 million, assuming Auditors do a 40% write-down over the next 18-24months, the cost will be about $100-150mio (depending on the weightage of vessels in the accounts).
• If Auditors revalue the CH Offshore shares at $0.13 (valued at recent stake sale), it is also about 50% lower than last month&rsquo s trading average.   (eg. $70mio?)

 

These two if(s) are applied, the equity account will be reduced by max 220mio (not likely). The bottom line fair value is likely to be 11 cents (equity account about US$65-75mio), cp.


Cashflow Perspective

The company mentioned about using $4+ million excess cash for working capital after offloading part of CH Offshore. Actually IE Singapore can easily fund them for $5mio (as explained in my earlier thread), it is likely that CIMB has triggered cash calls for the pledged CH Offshore shares. Was the CH Offshore share buybacks in 2016 meant to support the valuation for CIMB loans.

 

Lastly, the biggest cashflow issue is delivery of Falcon Energy' s jack-up rig from Keppel. According to Keppel' s press release in Jan 2017, Keppel mentioned that " We have received requests to defer the delivery of the jackup for Falcon Energy to the second quarter of this year, and that for BOT Lease Co to January 2019. For the Falcon rig, we have received 20% downpayment, and for the BOT rig, 60% of the milestone payments." http://www.kepcorp.com/en/news_item.aspx?sid=6917    http://www.kepcorp.com/en/news_item.aspx?sid=3880

Next, Falcon has secondary market bonds due to mature 5-months later. According to bloomberg' s BVAL score pricing, it is priced at 25% below par or over 80-90% yield-to-maturity (YTM). It means that if you buy the bond now, you make 80-90%pa (till maturity).  https://www.bondsupermart.com/main/bond-info/bond-factsheet/SG6SJ3000005

 

 
 

Sidetrack:
Therefore the gem is CH Offshore, although Falcon&rsquo s off-market deal for CH Offshore is merely appx $0.13, small investors are still able to offload CH Offshore at $0.26-27 level this wee

 

CRUDE OIL RALLIED TO $53.54

 

Total Debt S$ 258.87 mm

Total Assets S$ 901.14 mm

SGX 13/Feb/2017

 

How to privatise when it is scampering around looking for cash to repay recalled loan?

danger      ( Date: 11-Apr-2017 13:55) Posted: This bugger falcon need a viagra and a privatisation ASAP

 

This bugger falcon need a viagra and a privatisation ASAP

 

Yesterday drank too much, drunk liao? Lol