In Energy, Financial competency, Temasek on 13/09/2012 at 7:18 am
This investment has been problematic for Temasek http://atans1.wordpress.com/?s=Chesapeake
The shares closed at US$19.89. Temasek owns bonds that are convertible at US$27 (issued when stock was around 23-25).
It has many problems but the most pressing problem it spends more than it makes. It expects to spend roughly US$14bn on capital expenditure, acquisitions, interest, dividends and taxes this year, against about US$3bn in operating cash flow.
So it has to sell. This year, the company has reached agreements to sell US$11.6 bn worth of properties (including the ones reported below). It is aiming to raise a total of about US$13 bn to US$14 bn. S’poreans can only hope it succeeds.
The Chesapeake Energy Corporation said on Wednesday that it had agreed to a series of asset sales (US$6.9bn) as part of an effort to reduce its considerable debt burden.