Eros

135

Comments

  • Is it just the search for yield pushing EROS higher or is there some fundamental data supporting the price? I was too late to bail out of this last year so have continued to hold this bond although I am now considering finding another less volatile home for the funds.
  • I suspect no, as it has been suggested some "creative accounting in the figures". ie too much value placed on film rights etc
    I purchased some when the price was lower, and like you thinking "now" might be the time to Exit!
    I may wait until a few more weeks (end of the summer)
  • I've held since issue and added more when YTM was around 30%.
    Share price has been fairly steadily increasing this year which gives me some comfort.
    I think first quarter earnings are due next week so that may give further indicators.

    Currently yielding close to 12%

    ** Don't take the fact that I hold as any kind of recommendation.**
  • Hmmm - First Quarter results were due yesterday but as far as I can see weren't published.
    Not a good sign in my book.
  • And here they are:- phx.corporate-ir.net/External.File?t=1&item=VHlwZT0yfFBhcmVudElEPTUyMzU5NTd8Q2hpbGRJRD02NDM5MDk=
  • Seems that shareholders didn't much like results (down 6% at time of writing) but bondholders quite positive (up just over 4%)
  • Good endorsement for the company - bond has ripped recently.
    Quoted 86-90 now.

    -----

    Eros International Plc Raises $30 Million From Two Existing Top 10 Shareholders
    ISLE OF MAN, United Kingdom -- September 22, 2016

    Eros International Plc (NYSE:EROS) (“Eros”), a leading global company in the Indian film entertainment industry, today announced that two existing top ten institutional shareholders of the Company have increased their holdings in Eros. The Company raised approximately $30 million through a private placement, the proceeds of which will be primarily used to fund further expansion of Eros Now, the Company’s OTT platform.
  • Excellent - bit more cover for us bondholders.
  • Never really took to this issue - but as somebody said (I think) "Never say never"

    The lack of further bad news and there having been no discussion/comments on these over the past few months has led me to review my thoughts, and I am tempted to buy a few.


    Woz
  • Dickens I think. But you could thake it to mean "anything could happen" and for me that is the case here. I've listened in to a couple of analyst's phone ins following results but they haven't made me feel any more confident. In short, I just don't trust the management.

    I bought bonds and shares when they first listed in London. Sold out of shares after they moved listing to New York and Barclays said I could no longer hold them. Have held on to bonds and actually added more when they were yielding 30% plus. Still well down overall but love the yield and take some comfort from my impression that American authorities response to corporate malfeasance is much much more robust than that in London and this might keep me safe until this bond matures.
  • I agree

    I don't have a good feeling about the management either, but , as you say, the US authorities aren't frightened or wary about rooting out any wrong doings.

    I am leaning towards getting a few now and then sitting on my hands for a while before adding

    (Incidentally, you are right, it was Dickens - I just had to Google it - Pickwick Papers)

  • http://www.nasdaq.com/article/bollywood-film-maker-eros-pitches-highyield-bonds-20170305-00103

    Doesn't make any sense to me so hope someone better qualified can give their take. Article seems to say that issue might be in the region of 4.5% to 5.5% but EROS1 YTM is over 13%. The US offering will be senior but hard to see why anyone would buy at less than half the interest already on offer.

    Bit worrying that (my presumption) the revolving credit facility is being withdrawn.
  • Laughton - don't think the article is intimating the Eros new issue pricing will be in the 4.5%-5.5% range; its just where comparable issues are trading. If NetFlix, a $61bn market cap company, is trading at 4.5%, there is no chance Eros will be able to issue at a rate anywhere close to that.

    I think if Eros manage to get this issue done, even at say 10%, it is a positive reinforcement to the retail bond holders - after the CapRe and Temasek equity raise late last year, this will be a further endorsement of the company and biz by a separate set of investors.

    Just my 2c...

  • Probably me just being cynical then.
    You must be right as ERO1 appears to be up 5% this morning.
  • For what it's worth - Eros CFO presentation at a Deutsche Bank Media & Telecom Conference yesterday:

    http://edge.media-server.com/m/p/mdhexcpg
  • Eros CEO Says Still in Talks With Investors on Dollar Bond Deal
    By Divya Patil
    (Bloomberg) -- Eros didn’t price its U.S. dollar denominated bond deal on Tuesday amid “wider pricing” expectations from investors, Group CEO and MD Jyoti Deshpande said in an email.
    Eros was marketing a Reg S offering, rated B+ by S&P, at a final guidance of 9% (the number) vs IPT 8.25% area, according to a person familiar with this offering, who is not authorized to speak publicly and asked not to be identified
    “We continue to have constructive conversations with investors and will decide way forward over the course of today and tomorrow,” she wrote
    “The average cost of our total debt is around 7% so to refinance it all at 9% wouldn’t make sense for us.”
    “This is an opportunistic benchmark bond for us and we want to build a track record in the bond markets so for a smaller size deal we are less price sensitive.”
    “If we decide to not do the bond we will revert to bank financing as we have in the past and continue to enjoy healthy relationships with our group of existing lenders.”
  • Backtracking then. Must have been a surprise to them that market expects at least 9% (I don't know why). Maybe some red faces at Deutche Bank.
    "opportunistic" - yeah, well they got that right at least.
    And it seems that my earlier presumption was wrong and that their revolving credit has not been withdrawn.
    Will be interesting to see what happens to ERO1 pricing in the event they drop or severely curtail this bond offering.
  • US$ bond issue pulled - lack of interest.
    London market doesn't like it - ERO1 down again today.
    Expect share price to drop again (possibly to a new low) when US market opens later.
  • S&P Global lowers Eros International rating to 'B-'
    Disclaimer : I don't have a position in ERO1, I sold a while ago @73ish,

    FYI


    http://www.outlookindia.com/newsscroll/sp-global-lowers-eros-international-rating-to-b/1006151


    New Delhi, Mar 13 S&P Global Ratings has lowered the rating of Eros International to 'B-' and placed the same on credit watch negative owing to high refinancing risks.

    "... Lowered to 'B-' from 'B+' its long-term corporate credit rating on Indian film production and distribution company Eros International Plc. We also lowered our issue rating on Eros' proposed notes to 'B-' from 'B+'," S&P Global Ratings said in a statement dated March 10.

    "At the same time, we put our ratings on credit watch with negative implications."

    The 'B' rating means the entity carries the capacity to meet its financial commitment though there is a heightened risk of vulnerability.

    The agency attributed its action on Eros to "the increasing refinancing risks resulting from its inability to place the proposed notes and arrange other alternative facilities". The credit watch placement reflects the possibility that the company could fail to make timely payments on its banking facilities, it added.

    "In our view, Eros' withdrawal of the notes raises the refinancing risk on its upcoming maturities while it continues to work on alternative means to refinance them. We understand from Eros that it is currently in advanced stages with its financiers to secure new facilities to refinance its maturities of about USD 95 million due March 31, 2017," it said further.

    Nevertheless, "we believe there is a risk that securing alternative finance and timely disbursement to repay the revolving credit facility may take more time, potentially beyond the due date of the facility".

    The rating agency also referred to the option for Eros to use its cash of USD 135.8 million as of December 31, 2016 to avert any potential missed payments. "However, we are not sure about the company's willingness to use most of its cash to repay the upcoming maturities in full and on a timely basis. Also, in the case of cash being applied for debt maturity, the company's ability to spend on content creation will be significantly curtailed, impeding its business position," it noted.

    "We will resolve the credit watch depending on the progress on Eros' refinancing over the next week. We will likely downgrade Eros if it is does not make significant progress over the next week and thereby further increases the risk of potential missed payments," it said.

    According to the statement, a timely payment of its March 31, 2017, maturities could result in S&P Global Ratings' affirmation or raising the rating after taking into account the company's risk management practice as well as future funding and liquidity position.
  • Anyone else still holding these?
    Trading in shares suspended today when price dropped 20% tripping circuit breaker.
    Eventually recovered and closed down 0.75% at $13.50.
    Does make you wonder though - no smoke without fire?
  • Sold mine a while ago at 72, there is some discussion on advfn ERO1 on these. I think the crunch will come when the RCF has to be refinanced. For sure there are a lot of short sellers with the knifes out for EROS, they will probably do everything they can to scare banks/investors off the refinancing. Too risky for me,
  • Results out today and shares down 23% at 10.04 having been as low as 8.7.

    Bond down a couple of points.

    Sold most of my holding which was bought at pretty much the current level as I just don't trust this company.
  • I think you're right SJD - they just don't come across as trustworthy.
    Quite big misses on revenue and profit.
    Hoping they will close above $10 as that's the level at which I told myself I would sell out of the bonds.
    Share price creeping up as I write but bonds down more with YTM close to 20%
  • Should the price go low enough, then perhaps a buying opportunity, for a limited time?
    Measured Risk
  • it's a binary bet, all or nothing.
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