Consolidated Energy - comment

The 30-point recovery in CONSEN bonds over the last couple of days has been a pleasant surprise, even if the quantum of the leap belies a dearth of hard facts so far. We expect a short squeeze to be a significant part of the recovery. The catalyst looks to be a settlement of litigation between the Trinidad & Tobago government and Proman over the latter’s purchase of PETL in 2009. Proman may now be able to repay the $260m it owes CONSEN, which CONSEN can then use to redeem a $227m SUN in May 2026. We were and are still sceptical that Proman will repay the loan, but we have maintained that CONSEN would be able to raise secured debt if necessary. In December, creditors had approached the company to provide the necessary liquidity (likely secured). Our view has been, and remains, that the value of the CONSEN assets exceeds its debt, and that the company should be able to bridge its liquidity gap. Facts are absent, so we can only interpret the public statements (with apologies to Friedrich Nietzsche - see your BBerg quote this morning).