Friday's trade was good because they halted the stock early in the week @.33 with 66 million short. It was bound to cause some covering once it reopened trading @.10's. Id be Leary of trading it now----->
What is good news for the bondholders, however, is terrible news for the shareholders. Under Valaris's restructuring plan, current stock will be wiped out, and the best shareholders can hope for is warrants for future stock. The company is still in talks with its more stubborn bondholders on the agreement. Meanwhile, some of its more generous creditors have agreed to provide it with $500 million in cash to fund the restructuring.
Valaris was the result of a tie-up between Ensco and Rowan Companies that was only finalized last year. Its biggest shareholders are asset managers, including Luminus Management, BlackRock, and Vanguard Group.
The offshore drilling industry has been pummeled hard by the pandemic and the oil price crash. Many analysts see a lot more bankruptcies down the road as most companies in the field are heavily leveraged, and demand for offshore drilling is extremely tight as E&Ps go into survival mode, cutting or postponing all non-essential expenses, including costly offshore drilling. JMO
The stock market is an predator / prey scenario where the Companies and their lenders are the predators and retail IS the prey. Play wisely!
