What Changes the Game?
I find it interesting that the DIP Lenders were willing to give management an additional $100 plus million on the already sizeable loan. Did anyone look at the list of who these lenders are? Looks to me like a pretty impressive bunch.
Do you think they knew when they agreed to lend the additional funds, that there were no qualified buyers for the shelf assets? I think they might have known, but pure speculation on my part.
So why would they agree to another hundred plus million? I find it very unusual; if they were after all of the debtor’s assets they would not have to give them any additional funds. These folks are money people and not oil and gas folks. I believe they must think they will be paid, cash, when this thing is settled, but what could give them that idea. Most of the news we see is basically bad news.
The issues with shutting in the Gomez assets and all those unhappy parties involved, you would think the Dip Lenders had some input into this business decision. The reported analysis would suggest no positive revenue here.
Doesn’t appear to me worth the risk of giving the ATP additional funds with no qualified buyers for the shelf properties and no real cash flow from the Gomez assets, why give them an additional loan????
The cash flow analysis for Clipper looks interesting, but again, is it worth the risk? Even throwing in all of the “non-debtors ATP assets”, is it worth the risk, money folks want cash and not assets they have to deal with and sell.
So what is it that these lenders see that would warrant an additional $100 plus million? Anyone have any speculation they would want to share?
Just me and of course “just for fun” as we wait and watch; and I am more than likely wrong, but we have a civil trial going on here in New Orleans that will determine the degree of culpability that BP and the other companies have in the 2010 Deepwater Horizon accident. Some feel, and are now getting their day in court, that the accident was "a classic failure of the managements of BP, Transocean Ltd. and Halliburton which unleashed the worst offshore oil spill in U.S. history and basically the shutdown of oil and gas business in GOM which adversely effected ATP.
Cause and Effect; some will argue, like T. Paul, that the cause of ATP’s financial issues was the shutdown of the GOM and they may also argue the effect was Chapter 11 for ATP, which has almost destroyed ATP and could in the end. Just me but I would think ATP and its equity holders would have a pretty strong case in defending this position and BP, Transocean and Halliburton all have very deep pockets. We have all read about the ATP litigation against BP, but no reported update on the status of this litigation.
Risk and Reward; who would continue to grant loans if they felt they would not be paid back? Would a “cash” settlement from the parties responsible for the Deepwater Horizon accident “change the game” for ATP?
Would a possible settlement of just the amount to pay the Dip Lenders be enough to warrant additional funding, I don’t think so; or would a possible settlement of three times the size of the dip loans be enough to enhance lenders to make additional loans to a company that has a record of never completing their forecasted projects on time.
The DIP Lenders have to see something on the horizon and if that something is a possible settlement for billions of dollars, they just might risk another 100 plus million to a company that may become real healthy overnight. As we watch this ATP bankruptcy through the twists and the turns wouldn’t it be something to learn of a settlement exceeding 2 billion dollars on the reported suit against BP. What do you think the value of the common, preferred and bonds might jump too. Just me, but this just might compare to winning the lottery.
So now back to reality, I have to be missing something here, if I were the Dip Lender and the only way for me to recover my loans were in the value of the ATP assets sold at auction , I would not be giving them an additional funding. I would also not be giving them any additional funds based on the unknown outcome of civil suit. So why did they give them the money????
For those that have an interest; Rigzone has some pretty good coverage of the current civil trial against BP.
AI
