Raymarine shares...again...is it the end??

[starboard]

The board of Raymarine (the "Board") announces that it is entering |
| into exclusive discussions with a single party over the possible |
| sale of the business and assets of Raymarine and that it is no |
| longer in discussions with Garmin Ltd. It is envisaged that the |
| proposed transaction will be structured by means of a sale of |
| Raymarine Holdings Limited, a wholly-owned subsidiary of Raymarine, |
| and that, subject to certain limitations, the whole of Raymarine's |
| bank debt will be repaid on closing. Raymarine's other creditors |
| (including employees and suppliers) will continue to be paid in the |
| normal course. Further to the Company's announcements of 12 June |
| 2009 and 17 August 2009 and its interim management statement on 19 |
| November 2009, it is not anticipated that there will be any value |
| remaining for ordinary shareholders. |
| The proposed transaction will be subject, amongst other things, to |
| the potential buyer completing satisfactory due diligence and to the |
| agreement of definitive documentation. Accordingly, the Board notes |
| that there can be no certainty that the proposed transaction will be |
| completed. In light of this, Raymarine and its banking syndicate |
| are in constructive discussions in relation to an extension to the |
| Raymarine group's current banking facilities which expire on 31 |
| March 2010. |
| As a result of the proposed transaction structure, the Board |
| confirms that it is no longer in discussions with any parties |
| regarding a potential offer for the Company under the City Code on |
| Takeovers and Mergers. |
| A further announcement will be made in due course. |
+----------------------------------------------------------------------+

 

[libertyman]

For shareholders - yes it looks that way but the the management have been warning of this for some time now. Looks like they have some brave soul prepared to take on £100M of debt in which case well done them! There is still the potential for all this to come undone during due diligence in which case I would think the banks will pull the plug and then it may be a bun-fight to see who picks up the rights to the (very considerable) installed base from the admistrator.

 

[VO5]

The board of Raymarine (the "Board") announces that it is entering |
| into exclusive discussions with a single party over the possible |
| sale of the business and assets of Raymarine and that it is no |
| longer in discussions with Garmin Ltd. It is envisaged that the |
| proposed transaction will be structured by means of a sale of |
| Raymarine Holdings Limited, a wholly-owned subsidiary of Raymarine, |
| and that, subject to certain limitations, the whole of Raymarine's |
| bank debt will be repaid on closing. Raymarine's other creditors |
| (including employees and suppliers) will continue to be paid in the |
| normal course. Further to the Company's announcements of 12 June |
| 2009 and 17 August 2009 and its interim management statement on 19 |
| November 2009, it is not anticipated that there will be any value |
| remaining for ordinary shareholders. |
| The proposed transaction will be subject, amongst other things, to |
| the potential buyer completing satisfactory due diligence and to the |
| agreement of definitive documentation. Accordingly, the Board notes |
| that there can be no certainty that the proposed transaction will be |
| completed. In light of this, Raymarine and its banking syndicate |
| are in constructive discussions in relation to an extension to the |
| Raymarine group's current banking facilities which expire on 31 |
| March 2010. |
| As a result of the proposed transaction structure, the Board |
| confirms that it is no longer in discussions with any parties |
| regarding a potential offer for the Company under the City Code on |
| Takeovers and Mergers. |
| A further announcement will be made in due course. |
+----------------------------------------------------------------------+

It means, "in code", that the value (or rather, the price in the market) of the shares, (as I warned in previous posts on the other thread) will go to Zero.
You cannot say you were not warned in advance of the event.

 

[BlueSkyNick]

You cannot say you were not warned in advance of the event.

Nobody seems to be saying that, so you can't say "I told you so."

 

[tcm]

hm, i think the bank will be having a cold bath tho - and surely not getting the whole flippin £100m?

 

[Twister_Ken]

So, someone is interesting in buying Raymarine, for the price of its bank and trade debt. Is that right?

And, presumably, keeping it going as is, or in another form, but debt-free?

 

[Seven Spades]

I have always resented the way that Raymarine closed early on Fridays, it was just the wrong attitude.

 

[Cerddinen]

This causes some issues for owners of boats equipped with Raymarine gear. My autopilot computer failed last season. Raymarine repaired it but advised not to use it until the linear drive was checked (excessive power demand from the drive can blow the computer). The drive is now with the Raymarine service department. Question: what do I do if it needs replacement? Is it better to scrap the system and go with new throughout or continue with slightly doubtful components that might soon be irreplaceable and non-repairable? Add to that the fact that my C70 is also showing symptoms of failure.

 

[wotayottie]

The sad answer is to move on. Buying more Raymarine kit now would be like buying a land Rover or Jaguar - good money after bad.

There are plenty of alternatves from foreign companies..

 

[Twister_Ken]

I wonder whether they'll even be at LIBS?

 

[savageseadog]

I think it very unlikely that someone is prepared to stump up £100m for it. Putting it another way, if the bank were to call in the receivers would the company realise that amount?

 

[toad_oftoadhall]

So, someone is interesting in buying Raymarine, for the price of its bank and trade debt. Is that right?

And, presumably, keeping it going as is, or in another form, but debt-free?

Spot on. (Of course the new owners may be financing it with 'new' debt, but I'd think less than 100 mill!) Assuming the whole thing goes ahead, for everyone except the shareholders no dramatic change.

I actually think the buyer's getting a good deal as long as the recession lifts over the next year or two - I'd imagine the (hopefully) last months of a recession would be exactly the right time to buy this kind of discretionary spend business. I could be wrong but I think businesses are offer valued at 4x annual profits and I'm pretty sure in good times Raymarine makes 25 mill profit so a number close to 100 mill might be possible - we'll have to wait and see if and when the deal goes through.

On a personal note I've made some cash out of Raymarine stock in the last two years - thanks Raymarine!

 

[Kurrawong_Kid]

The sad answer is to move on. Buying more Raymarine kit now would be like buying a land Rover or Jaguar - good money after bad.

There are plenty of alternatves from foreign companies..

I would if I had the money! Both superb pieces of kit and Tata have put the money in without any Government interference.

 

[Norman_E]

hm, i think the bank will be having a cold bath tho - and surely not getting the whole flippin £100m?

That depends on the terms of the bank's security. If the bank(s) have an all monies debenture including fixed charges over all the physical assets and floating charges over all the other assets including the intellectual property, a buyer may well have to take over the debt in full, especially as the intellectual property is what they really need to acquire. (i.e. all the designs and patents)

 

[emandvee44]

Raymarine Shares

Seen the price this morning?! and I have just ordered a new plotter - hope they make the sale of the co. before the bank loan is called in.

Michael.

 

[Twister_Ken]

I'm putting off buying anything Raymarine until we see the direction of the crumbled cookie. Too much of a risk to buy now and then find there's no support in a year or two.

 

[lw395]

At 1.61p it's almost tempting to buy a few shares, but I suspect it's next stop zero.
Even in the good times they only made a peak of £27m profit so I don't see them ever servicing the debt.

A bad year at the boat show will see them ditched by the major boatbuilders, as new boat buyers will expect warranty support on the systems.


A sorry business.

Delete another potential employer for us engineers? Or will someone buy parts of the business and carry out some engineering development?
I suspect it's more likely that someone will just buy up existing designs and sell them cheaper without the debt to support.

 

[BelleSerene]

They're still slated as a sponsor of the RTI race 2010!

 

[Danny Jo]

I think it very unlikely that someone is prepared to stump up £100m for it. Putting it another way, if the bank were to call in the receivers would the company realise that amount?

Once the likely value of a company has fallen below that of its debt, the "purchasing" procedure has more to do with negotiating with the principal creditors (regarding a "price" for the debt) than with the company. If the creditors are prepared to negotiate it is because they recognize that they will get more from the "sale" of the debt (albeit at a discount) than they would in the event of bankruptcy after the receivers have had their cut.

So, perhaps, if you want to pick up a nice tidy but debt-crippled company you can (1) gamble on no-one else being interested, sit on your hands, await its bankruptcy and make an offer to the receivers (disadvantage: bankruptcy tends to be bad for the company's image, and you may want to trade on the company's name) or (2) make an offer to the banks for the debt (disadvantages: you are likely to have to pay a bit more, and you may have to negotiate with multiple creditors). You will hardly need to point out to them the financial advantage they gain by cutting out the middle men, aka receivers.

Gossip, no doubt totally unfounded, is that negotiations have in the past been somewhat, um, complicated by the reluctance of some of the creditors to talk to each other.

 

[Twister_Ken]

Or, for not much money at all, you could buy a majority shareholding, sack the BoD, appoint a ringer Chairman/CEO, sell the IP, stock, tooling and other assets you wanted to Newco at a fire sale price, recruit key employees to Newco, then declare Raymarine insolvent.