I Have Doubts That Peabody Energy Corporation Can Survive

Summary

• Coal production and prices continue to plunge during the COVID-19 crisis.
• Peabody Energy Corp. does not directly own the operations in Australia.
• Australian insolvency laws are very different than the U.S. Ch.11 Bankruptcy Code.
• There are over $1.26 billion in U.S. reclamation liabilities that can't be discharged in Ch.11 bankruptcy.
• Investors might be mistaken thinking Elliott Management will protect the shareholders.

I doubt that Peabody Energy Corp. (NYSE:BTU) can survive for even another year. While certain operations might be able to continue, the company as a whole, in my opinion, will end. Peabody did emerge from a Ch.11 bankruptcy in 2017, but the world has drastically changed and it is unlikely they can survive another bankruptcy filing. The company already had a loss of $1.33 per share in the first quarter and that was before much of the impact of Covid-19 hit the world's economy. With secured notes due in 2022 selling at about 72 and secured notes due in 2025 at 56, the market clearly expects that even secured claim holders will receive far less than a full recovery in any restructuring.

Australian Laws

The key factor in the potential liquidation of Peabody Energy Corp. is Chapter 5 of the Australian Corporations Act of 2001. I covered this issue in a 2015 article, but it is a very critical issue that needs to be looked at again. In Australia, a company "goes into administration" that is a very different process than under our Ch.11.

First, Peabody Energy Corp. does not directly own the assets in Australia. It owns equity in multiple layers of companies (mostly holding companies) in Gibraltar, The Netherlands, and Australia that eventually own the assets (and liabilities). This is an absolutely critical point.

Second, in Australia, an administrator is appointed. The board and current management do not control the insolvency process in Australia. Either the company goes into liquidation or the administrator and creditors negotiate a DOCA-Deeds of Company Arrangement. While the claim/creditor order is somewhat different in Australia than Ch.11 in the U.S., equity holders in both Australia and the U.S. are at the bottom. (There are also no DIP loans allowed in Australia.) Peabody Energy Corp. is an equity holder and is, therefore, on the bottom for any recovery. Because under either a liquidation or DOCA, I am not expecting full recovery for all creditors, I am not expecting any recovery for shareholders. Peabody Energy Corp. as an indirect shareholder of Peabody Australia Holdco Pty. Ltd. (Queensland, Australia) would not receive anything for their assets in Australia-zero recovery. (Note: PEAMCoal Pty. Ltd. was "deregistered" in 2018. This layer of Australian ownership was the focus of many SA readers during the prior bankruptcy process.)

Third, some might counter that Peabody Energy Corp. could file for Ch.11 in the U.S. and try to get all the entities included in a joint administration, including Australia entities, under the cross-border insolvency MODEL Law. I would expect a huge fight by various interested parties in Australia. Certain creditors, including workers, have a better standing in Australia than under our Ch.11. In addition, there are usually very modest legal expenses under the Australian process compared to the huge legal fees in the U.S., which means a greater potential recovery for unsecured claim holders in Australia. Local environmental groups and politicians would fight losing control to some bankruptcy judge in St. Louis. (I would not be surprised if some Australians who object to having the U.S. courts handling the case point out the appalling treatment of retail noteholders under Peabody's Ch.11 reorganization plan confirmed by Judge Barry Schermer in 2017. This mistreatment was covered by many SA writers in 2017. They may assert the U.S. courts are extremely unfair to various stakeholders.)

If this is not complicated enough, there is another issue and that is inter-company transactions between various U.S. and foreign entities. Most of these inter-company receivables and payables cancel out when reporting a consolidated balance sheet. It could be a major issue, however, for creditors seeking recovery for their claims. Just for the sake of an example: Assume the Australian operations owe U.S. entities a lot of money and the Australian operations go into administration. U.S. creditors will assert that as a creditor to the Australian operations, the U.S. Peabody is owed money regardless of the status of their equity ownership of Australian operations. This would have a positive impact on the recovery of the 1lien notes. If the reverse was true, U.S. creditors may litigate and seek recovery based on section 547 for "preferential transfers" in any payments made to Australia. The issues regarding inter-company transfers are extremely complex and I tried to explain the basics as simple as I can.

The tables below give some indication of the Australian operations and the U.S. operations. The seaborne thermal mining and most of the seaborne metallurgical mining are the Australian operations.

Revenue

EBITDA

What Happened in Australia During the Last Bankruptcy

Because of huge negative issues associated with potentially going into administration in Australia, I did not expect in 2015 that Peabody would file for bankruptcy. I thought management would fight very hard to avoid bankruptcy and try to wait it out until coal prices increased. I was wrong. Management, which I asserted in a SA article was "inept and incompetent", did almost nothing to avoid bankruptcy. (I guess they wanted a very lucrative management incentive plan under a Ch.11 reorganization plan instead.)

The Ch.11 filing in St Louis did not directly include any Australian entity but did include the Gibraltar entities. The Australian continued normal operations. After the terrible prior-year Australian results were filed with the Australian Securities and Investment Commission on May 31, 2016, some local environmentalists were developing a strategy to force the Australian operations into administrations. Local media sources were expecting them to go into administration because the Australian operations received a qualified accounting opinion in May 2016:

There is significant uncertainty whether the company and/or the consolidated entity will continue as a going concern, and therefore whether they will realise their assets and extinguish their liabilities in the normal course of business and at the amounts stated in the financial report...

They were saved by soaring metallurgical coal prices. With much higher prices in Australia, it was impossible to assert that their Australian operations were insolvent. They never went into administration. There still was, however a nasty fight between various creditor groups regarding the value of equity of Australian operations, which was the majority of the collateral that secured 1lien holders. Eventually, the parties negotiated recoveries for various creditor classes under a Ch.11 reorganization plan.

Some Coal Assets May Actually Be Liabilities

In bankruptcy, a coal company's mining reclamation liabilities are not discharged and remain a liability even after the company exits Ch.11. Peabody has about $1.264 billion in reclamation liabilities. An issue that has not been firmly established by the courts is the reclamation claim priority standing compared to other creditor claims. In prior coal mining company's reorganization plans, there were negotiated settlements with various regulatory agencies. Some assert, including myself, that reclamation should be classified in the same claim class as federal tax liabilities, which is one of the highest creditor claim classes and must get full recovery before even secured bondholders get any recovery.

Last year, for example, the Kayenta mine was closed because their sole utility customer ceased operations. Peabody had a $188 million legacy liability for reclamation, but other parties associated with the closure of the power plant also are paying some of the reclamation expenses. This mine was no longer an asset and is now just a major liability. If Peabody tried to sell any coal mines, the buyer would also be getting the reclamation liability associated with that mine. This greatly diminishes the potential selling price for a coal mine. Cottage Grove, Millennium, Wildcat Hills Underground, and Somerville Central Mines have closed or are closing this year, which means reclamation expenses have to be paid.

There is also another potential problem in trying to sell a coal mine on federal land, including a section 363 sale while in Ch.11 bankruptcy, and that is the Secretary of the Interior must approve the transfer of any coal lease. As stated in 30 U.S.C. §187: "No lease issued under the authority of this Act shall be assigned or sublet, except with the consent of the Secretary of the Interior". This most likely will not be a problem over the next few years if President Trump is re-elected, but could be a huge problem if Biden is elected. Many backers of the "Green New Deal" would pressure the Secretary of the Interior under a Biden administration to block coal lease transfers in an attempt to try to close that coal mine.

Brief Summary of Peabody and Coal Industry News

*Prices have continued to plunge from the end of the first quarter. This is from the May 6 10-Q for the first quarter:

*The latest weekly U.S. coal industry production was down 39.4% from a year ago and so far this year (17 weeks), total U.S. coal production was down 20.8% from same 17 weeks last year. Since current utility stockpiles of coal have increased 22.3%, it is unlikely that there will be any increase in the near future for thermal coal even if the economy starts to regain footing.

*Elliott Management, which owns 29.8% of the shares, and Peabody reached an agreement in February. There will be 4 new board members, including the head of restructuring at Elliott. The stock price rose on this news, but I viewed this as a negative sign. I thought it indicated that Elliott was moving in the direction of some restructuring and asset sales, which to me indicates that they thought the near-term outlook was bleak. Some BTU shareholders may have thought that agreement showed Elliott was aggressively trying to "defend" their very large BTU equity position. Elliott has already lost $1.27 billion on their 28,916,201 shares that they currently own since the BTU high price in June 2018. They did sell over 6 million shares since the proxy statement in 2019.

*FTC filed a suit to block the Peabody and Arch Coal (ARCH) proposed joint venture in late February because they asserted it would eliminate competition.

*$1.3501 billion long-term debt as of March 31, 2020

Peabody also borrowed $300 million under the revolver in early April leaving $192.4 million (after factoring in the letters of credit).

*Peabody eliminated 250 jobs in PRB and Midwest operations in April.

*Based on Glenn Kellow's wording of an indirect no comment response to a question by an analyst during the recent conference call about "monetization" of the North Goonyella Mine, there could be some progress in trying to sell that mine.

Bankruptcy Recoveries For Peabody Energy Investors

First, I do not expect any recovery for BTU shareholders. The complexities due to the corporate structure and Australian laws do not have much of an impact on BTU shareholders. Since shareholders were not paid for releases under the 2017 Ch.11 reorganization plan, I doubt they will get any payment for releases under a new bankruptcy. If they file Ch.7 this time, there will definitely not be any payments-no "gifting". Shareholders can't expect a recovery since secured noteholders are most likely not going to a full recovery for their claims.

Second, secured noteholders just can't look at the consolidated annual report numbers to estimate a recovery under either Ch.11 or Ch.7 in the U.S. I suggest estimating recoveries based on a Ch.11 filing in the U.S. and going into administration in Australia. Without knowing the current inter-company transactions, the prudent approach would be just to subtract the value of the Australian operations and assume the recoveries would be from only U.S. operations.

Adding $1.3501 billion long-term debt and the $300 million recent revolver borrowing, which I would expect would be fully drawn to $492.4 million prior to any bankruptcy filing (after factoring in the letters of credit), the total is $1.8425 billion. The $1.264 billion in reclamation liabilities also have to be factored into estimating recoveries for investors. Given the current extremely uncertain world economy, it is unrealistic to estimate an enterprise value for Peabody's U.S. operations, but I am guessing it is much less than $1.8 billion. Often 1lien claim holders do a "credit bid" to get control of their collateral assets, but I would not be surprised if they tried to "shop" the assets first to see if there any interested buyers of specific assets. The current low prices for the secured notes reflect the many uncertainties mentioned in this article.

My Peabody Short Position

Briefly, I shorted BTU when the company announced last year that they were going to try to issue new notes maturing in 2026 to replace the 2022 and 2025 notes. (The new note deal was pulled because of market conditions.) Before that announcement, I was expecting Peabody would do multiple market repurchases with cash from operations to retire some or almost all of the notes prior to maturity. The company already had spent $1.34 billion to repurchase 41.5 million shares (average price about $31 per share), which I was strongly against, and I thought they would be able to use projected future cash-flow to buy notes instead. I took the announcement as an indication that management thought that they needed to extend maturities and that cash-flow over the next few years was going to be much weaker than expected.

As BTU stock price has fallen below the $3 level, I booked some profits and will most likely close my short position completely before it goes below $1.00 per share because I rarely hold penny stock short positions.

Conclusion

Investors can't just use the Peabody Energy's consolidated financial reports in determining recoveries under any future bankruptcy/insolvency filings. Australian laws and reclamation liabilities are major issues that have to be factored into the process. While the price of the Peabody secured notes looks "cheap" for secured debt issues, they are no bargain, in my opinion.

BTU shareholders are not expected to get any recovery. The Australian and reclamation issues do not directly impact shareholders because I don't expect recoveries for shareholders regardless of the Australian law issues. While Elliott may try to delay filing for bankruptcy as long as possible to protect their large BTU position, I just don't see coal prices improving enough to prevent a complete liquidation of Peabody Energy Corp. There might be some mines still operating in the future under the Peabody name, but the large entity of Peabody Energy Corp, in my opinion, will not survive.

Analyst’s Disclosure: I am/we are short BTU. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Comments

[Charlie's Munger]

Met coal producer $CTRA is on fire and has activist...

[Ross Rummel]

Seaborne coal recently traded at a recent high of $210.

Is it wrong to think that China continues their stealth bailout of their coal companies?

[Jay14150]

@Ross Rummel Yes, I think so. I hold that a critical state goal is the maintenance or intensification of labor usage, so a bailout makes perfect sense.

Chinese blast furnace steel makers have historically lost billions just to keep their campaigns and employment going.

[samdehne]

BK WOULD BE CRAZY MOVE - FOR EVERYBODY INVOLVED

I listened to the BTU Nov 9, 2020 Conference call. The CFO's terminology and attitude

sounded quite positive and upbeat about having reached a palatable Agreement with

the Surety Bond folks.

(Even saying that after the signatures by Dec, 2020 they will be in pretty good shape

all the way to 2024. He did infer that signatures might take into Jan, 2021.)

Not a peep or intimation about BK from BTU... nor the Questioners.

The Surety Bond folks have an awful lot to lose by not compromising. And you can

bet that Elliott (WHO HAS MASSIVE INVESTMENT IN BTU and 3 or 4 members on

the BTU Board) had a lot to say during these negotiations.

Many people are praying that common sense will prevail and profits are there with

patience (and continuing higher Nat Gas price increases).

PS - Peabody would be a great takeover for myriad companies - even with the

debt and at somewhat higher stock price.

Just my humble opinion.

[ccprwq]

How about their negotiating with lenders? What is the main controversy? What is the probability of reaching an agreement? Thanks!

[oakraid]

Nice move up on the stock recently. Wonder if it is speculation because International coal prices have been increasing recently, or if they are going to get something positive accomplished with the lenders, etc.

[PipelineDancer]

@WYCO Researcher - Nice call on this one. Looks like it's going down.

Is there really a medium to long-term future for any of the Powder River Basin coal assets of any of these companies?

[WYCO Researcher]

PRB mines are huge and operate still at high volume. The problem is what happens when these mines produce at a much lower level-they will be unprofitable.

[Midwest Corp Finance Pro]

Their profitability will be dependent on how effective they can shrink their footprint to operate cost effectively at lower volumes. That said, lower volume is always a net negative. That's the cost side and Peabody seems to have done better than most on that front. The revenue side is heavily dependent on what gas prices do. If gas prices go up, pricing will improve and there would be upside.

[Midwest Corp Finance Pro]

As for BTU going down, I have a hard time believing the debt holders do better if they go chapter 11 (again). Particularly after the surety solution, all the enterprise value is in the debt, it is secured, and there are few other liabilities in front of that debt - so what is gained for those debt holders in a chapter 11 process?

[oakraid]

It looks like they have a plan to survive for the existing shareholders, we will see if it happens.

[ccprwq]

The revival of coal:

U.S. Department of Energy Coal FIRST Initiative Invests $80 Million in Net-Zero Carbon Electricity and Hydrogen Plants

www.energy.gov/...

www.senatorbartolotta.com/...

[Jeff Boyd]

Unfortunately it is only an $80M project.

[WYCO Researcher]

If Biden wins, I wonder how quickly BTU files for bankruptcy.

[Midwest Corp Finance Pro]

Just like Trump's presidency didn't solve their problems, Biden's won't be determinative of their fate. That fate, unfortunately, is well down an ugly path even without more regulatory pain (although that could be coming in a Biden administration). That said, the government administrators/legislators will need to balance the liabilities the industry (and states) have with putting more pressure on an industry already struggling.

P.S. Coal companies are paying more excise taxes now than they were when Trump went into office.

[Jeff Boyd]

We need to end the subsidies according to Biden. I'm not exactly sure what that means.

[labradoodle]

While coals' long term picture is bleak, I believe the intermediate term holds hope for higher prices. Natural gas has already doubled off its lows, and in the next year we will see it double again, even without a falling dollar (which is baked into the future with these tremendous budget deficits). There is a growing production deficit in the US which, coupled with higher LNG exports, is going to see the 2021/22 winter with probable shortages in natural gas at the end of the injection season.

Want proof? Look at CEIX(Consol Energy). They just bought back CCR (Consol Coal) after having spun it off a few years ago. They wouldn't have done that if they didn't see tremendous profits going forward in coal.

This is the bottom once this present market correction is over. I'm getting my natural gas and coal stock shopping list together right now.

[Jeff Boyd]

Things are obviously still lousy but Australian prices are increasing. PRB prices aren't moving but coal generation has spiked so capacity utilization might be be improving.

www.forbes.com/...

www.eia.gov/...

[Joeri van der Sman]

BTU doesn't offer a k1 right?

[Biological]

No. It's a plain old corporation.

[Biological]

Funny, it seems ARLP has benefitted from the BTU/ARCH news.

[WYCO Researcher]

BTU is toast after the FTC ruling against ARCH deal.

[labradoodle]

Thanks for the heads up. Just when natural gas(NG) prices look set to blow through $3.00 and could go to $4-6.00 in the next couple of years. As you know, the price of NG is all important to coal pricing power.

[Midwest Corp Finance Pro]

I found it interesting post ruling that Arch is clearly running from thermal coal - openly. Good luck finding buyers for those assets. Peabody's fate continues to rest with their debt covenant compliance and whether they can get a waiver/modification. If not, Chp 11 round 2. I think that is a waste of capital and should not happen, particularly since Elliot is the single largest shareholder and the liabilities are significantly smaller. Very different set of circumstances from 2016.

The other big loser is the state of Wyoming. Liabilities more exposed, product less competitive as a result of this decision.

[WYCO Researcher]

When you buy coal "assets" you are also getting a big liability-mine reclamation expenses.

[Midwest Corp Finance Pro]

From the Peabody Q2 10-Q. The most important paragraph in my opinion:

"There is significant risk that we will not be in compliance with the first lien leverage ratio requirement under our credit agreement in the second half of 2020 without successfully taking mitigating action. Noncompliance with the ratio covenant would constitute a default under the credit agreement, and the revolving lenders could elect to accelerate the maturity of the related indebtedness, and could potentially choose to exercise other rights and remedies under the agreement. Further, our senior secured notes and certain lease agreements contain cross-default provisions which would be activated by a default under the credit agreement, which could result in a similar acceleration of maturity under those obligations."

The second half of 2020 will be interesting to see play out. I believe it will be very mathematically difficult for them to comply by the end of the year. Potentially as early as Q3. Even if they are in compliance in Q3, all their debt could be classified as current if it becomes probable that Q4 will end in non compliance.

[ccprwq]

From the Peabody Q2 10-Q:

The Company believes it could seek to avoid noncompliance by taking certain mitigating actions, such as obtaining a waiver of the default condition, executing an amendment to the credit agreement, or completing asset sales to generate additional liquidity, but can offer no assurance as to the likelihood of success of such actions. If such actions were not successful, the Company could avoid noncompliance while maintaining operating liquidity beyond twelve months by repaying the amount currently outstanding under its revolving credit facility and replacing outstanding letters of credit with cash collateral. Such actions would avoid default on the remaining indebtedness under the credit agreement and cross-default on the senior secured notes and lease agreements as described above, but would have negative impacts to the Company’s liquidity.

With 900m cash, they can survive this time.

[WYCO Researcher]

Where is the cash??? What entities have cash and how much? There could be some intercompany transfer issues here.

[oakraid]

During the most recent conference call they noted that the North Goonyella commercial process was through phase one, and moving forward, and that they had interest from multiple counterparties. There are around 80 million tons of good metallurgical coal at the location. Do you have any idea what the value would be if they sell the location?

[Midwest Corp Finance Pro]

I haven't seen an earnings release date for Peabody for Q2. Normally they would have reported this week. Not sure what this indicates, but I'm guessing not positive. With Arch showing negative EBITDA in Q2, I would guess something similar is coming from Peabody.

[Midwest Corp Finance Pro]

A lot of good information here, but does not address the specific event that would trigger another chapter 11 filing. Their last bankruptcy filing was driven by the fact that in Q2 16 they were going break a debt covenant, so the filing was made just in advance of that.

Fast forward to today, they have a leverage covenant in their credit agreement that in all likelihood will be the trigger issue. It is calculated using trailing 12 month EBITDA, and I think they can probably get through two more quarters, but by end of 2020, they will have an issue.

If this plays out that way, you will see a delay in q4 earnings reporting and then a filing in feb/mar 2021.

[WYCO Researcher]

That could be the trigger for a US filing. You also have to look at operations in Australia and what could trigger a filing there. Plus, BTU could get a waiver on their covenants. But I think your timetable is about right.

[Midwest Corp Finance Pro]

There will not be a separate filing standalone filing in Australia. They don't have trigger events built in to that platform's obligations to my knowledge. If the broader company isn't solvent and the Aus. mines aren't making any money, you could have both sets of legal entities enter in to their respective processes. U.S. stakeholders will generally want to avoid that as most stakeholders, if they have to have a stake in the company, will want exposure to the seaborne markets with those assets, despite the poor quality (met in particular). The process is Australia provides far less recovery in general for stakeholders than the US chapter 11 process, so all stakeholders will generally view that as a last resort.

[labradoodle]

So that gives natural gas the rest of this year to recover sufficiently to hand a lifeline to BTU.

[Likrat ha-Tiferet]

@WYCO Researcher
This is an incredible article; it is a veritable manual; not one spare word; thank you. I am going to follow you like the sun. Please give us more.

[wvtradr]

They had over a $Billion in cash when they filed the first time. I was long and got hurt bad. Hard lesson learned.

[billknowsall]

In my view, the lesson is to avoid anything where Elliot holds a stake.

[Ross Rummel]

Last time I checked, Elliott own 35% of BTU.

[Ross Rummel]

From page 40 of the BTU annual report...

There may be circumstances in which the interests of a significant stockholder could be in conflict with other stakeholders’ interests.

Circumstances may arise in which the interests of a significant stockholder may be in conflict with the interests of our other stakeholders. A significant stockholder may exert substantial influence over us to cause us to take action that aligns with their interests, for example, to pursue or prevent acquisitions, divestitures or other transactions, including the issuance or repurchase of additional shares or debt, that, in its judgment, could enhance its investment in us or another company in which it invests. Such transactions may advance the interests of the significant stockholder and not necessarily those of other stakeholders, which might adversely affect us or other holders of our Common Stock or debt instruments.

A significant stockholder may also sell shares of our Common Stock into the market from time to time, and we cannot predict the effect, if any, that such future sales may have on the market price of our Common Stock.

...On February 5, 2020, Peabody and Elliott added four new members of the board.

It seems as if Elliott has loaded the board with members who may vote in Elliott's interest at the expense of all other shareholders.

Is it wrong to think that Elliott may become the sole owner of Peabody in the not too distance future?

[Ross Rummel]

*It seems as if Elliott has loaded the board with members who may vote in Elliott's interest at the expense of all other stakeholders.

[Jay14150]

@Ross Rummel Hi Ross, do you have a sense for how Elliot's presence could manifest itself at the expense of others? Would they get preferential treatment in bankruptcy?

[Ross Rummel]

The eighth circuit court ruling in the last Peabody bankruptcy gives hedge funds preferential treatment in bankruptcy, at the expense of all other stakeholders. There is no longer a "public" market for companies in bankruptcy, it's now only a market for hedge funds.

[Justy72727]

Wyco, congratulations on your gains from shorting BTU! It takes a lot of skill to find and hold a short position for a long time and come out ahead.

I guess I must have missed your previous article if you had one indicating you were short.

I find your analysis of bankrupt or near bankrupt companies over the years to be very impressive! Keep up the good work!

[WYCO Researcher]

Thanks
No prior articles about BTU short-actually this issue caused a fight with a few of my limited partners last summer/fall. (I am semi-retired but I still run 2 funds) They did not want me to write for SA -especially on companies that we were trading. (Making a ton on $ on my various shorts on PG&E -(PCG) shut them up somewhat)

[Nicklaas]

So, are we seeing a dead cat bounce today?

Your arguments, WYCO, got me thinking:
Would it not be rational to spin off the Australian assets (maybe ex the troubled Goonayella ) and may be the powder river basin assets
There are little if any operational benefits in keeping them together.

Australia is about seaborne coal both thermal and metallurgical. Both are likely sound medium term - there are still coal power plants built in Pakistan and Vietnam and others and Japan will not go near 100% to gas. The majority of steel will be made in blast furnaces, not by direct reduction / pellets / electric arc....
Either their BTU-AU finds funds to survive the price slump or they go bust.

Powder river has positive margin and unbeatable costs. It has still volume. At some point gas will be more expensive and super grids will make it cheaper - less power loss intensive to transmit over long distance. Arch may want to snap it up, should the FTC be overruled in court.

The rest of the US asset? Maybe the met. coal in Alabama has a fighting chance.
The others may be doomed, or they find a new lease of life as a captive asset for a power producer.

The available cash provides some runway and chance to re-arrange. Given their cavalier capital wasting buybacks and other mis-judgements not the likeliest scenario - but neither irrelevant.

Greetings

Nicklaas