I shorted Petroceltic at 18p. It was not easy to borrow stock – I had to pay 5% p.a. Some may think this foolish in the light of the extraordinarily improved price of oil and the bid approach from Worldview, who already hold 29.9%. But the fact is that although the debt due under its “senior bank facility” has been extended until 29th January, these lenders want their money back. Total debt (with, no doubt, cross default clauses in place) is of the order of $150m and cannot be refinanced conventionally. This persuades me that whoever takes these creditors out of their present dilemma will demand a discount to these claims. And a discount means that ordinary shareholders should barely get a look in. Therefore, as matters stand, a bid of 1p might well succeed (the offer RNS would stress that shareholders otherwise get zilch). As to why it should be in excess of 18p I have no idea.
I do not wish to be thought perpetually to claim a vastly superior knowledge of tax law, but all the politicians’ talk about Google’s settlement with HMRC is so much deliberately deceptive drivel. As explained here many months ago, Google relied upon very long established taxation laws when paying virtually nothing, so it is impossible to argue that Google was/has been at fault. But, at least as I inferred from Sunday Times articles on Google’s tax affairs, there were clear grounds for an enquiry by HMRC. What is not clear is whether this £130m settlement reflects undisclosed profits now taxed, penalties or interest.
In any event, it doesn’t make any difference to Google since tax paid in the UK is simply knocked off the tax payable in the United States. HM Treasury know this of course and it is possible that Labour’s spokespersons do as well (although, I grant you that they might not – they are that thick).
ADDENDUM: On the Home run…
Plane Watch: My friend is so addicted to watching from his garden planes coming into Heathrow that he managed to pick up the arrival of a clutch of Walmart executives. They think that Home Retail (HOME) is worth 200p and that they can therefore eclipse Sainsbury’s. So I bought lots of HOME.
Apparently, there is c. £5bn of annual sales, no debt and TNAV of the order of £800m in contrast to a market value of the order of £1.2bn at 144p. Hurry along now. This should suit Asda.