The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
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If there was a chance of this, surely it would have been in the best interest of Faron to suspend trading until a resolution was agreed. Management has handled this shockingly
Rob can you put that In layman's terms please. Would that mean a possible take over by IPF at very little?
Do you mean they would get new shares with about the same price you can buy today?
Did IPF subscribe for any shares in relation to their agreement.
"The subscription price per share on the basis of these Warrants will equal the 30-day volume-weighted average price of an ordinary share of Faron on the Nasdaq Helsinki First North exchange immediately preceding the drawdown date of the respective tranche. The number of shares to be subscribed for under the Warrants will be calculated by dividing 10.0% of each tranche amount by the strike price defined above, subject to standard adjustments."
This couldn't be something as callous as what I'm thinking...if this part of the agreement is utilised in the coming weeks that would surely be a massive wtf
You still here Sax. I feel like I need some reassuring words right now as underwater
"Faron said. It said its total cash and cash equivalents stands at around EUR4.3 million, which it said was enough to cover the company's financing needs until the beginning of April."
So what's the issue?
Actually the situation only needs that Faron and IPF get a reasonable resolution, some positive news from clinical studies, FDA, e.g.. Big stakeholders buying shares with modest volumes and rising prices. Then RI with a nice ratio including free shares or alternatively news about partnering or M&A. Would that be too much asked?
It may well be that they had mutual understanding until “something got delayed and it blew up in their faces”. Unfortunate situation where the risk profile got too high and IPF had to act. It can still be that both parties can agree on a new deal to continue. It’s in the nature of IPF’s business to try to get higher gains with higher risk.
The other reality can be that covenants are covenants and somebody fully legitimately turned the lights off. None is gaining here and the damage is a reality.
We are aimlessly in a situation where sudden opportunities for benefit open up for some, down-righting the “obligation” to act with a new playbook
The management have made a serious mistake that I think we all will live to regret. I expected a fund raise but in a more controlled manner. If they now do a Rights Issue to raise £10 million we will all have to contribute 15% monetary value of our current number of shares so there is no dilution. Further fund raise will also be much harder in the future as the share price will languish at a much lower lower levels. This combined with a loss of confidence and trust in the board will impact the company for many years to come. If this is the full story then heads should roll.
ATB
SBT
The IPF facility was 30m and the first drawing was 10m. We are not talking about £1.5m or £6m.
I think Faron was progressing something that got delayed and it blew up in their faces.
Shoddy corporate governance and disregard of shareholder interests.
We were promised a Zero added to the end of the share price. SSV does not mean losing half your investment and having to put up more money to resist dilution of your holding.
All for 1.5m there must be something else at play here.
Lesson here is Aim companies are either corrupt or incompetent,take your 10% when it happens and move on
Exactly. Who gains from this? Is it to let some bigger players or friends and family in at a lower price? Just can’t understand what the hell has happened in the last week!
Bridgedogg1
You are spot on...... It is so obvious this could have been avoided...
So WHY did they let it happen ???? Shareholders deserve answers...
GLA!
Sad thing is they could have easily raised £6m in a placing and avoided all this. Now they will probably raise £20m in a rights issue at half the price, to pay off the debt and provide funding for 2024. The mind boggles how it came to this.
Some thought correct or not
They may well agree some kind of a resolution with IPF but to get there they need to have a BATNA which belongs to basics in negotiation skills. RI is one of Faron’s alternatives in negotiations and that is why it was published, to be plausible (still they can have other alternatives too). Anything else can happen too but we begged for additional info and we got it and even more between the lines.
Buying shares now before if/when they announce RI or afterwards is of course the question? Like somebody said here, if you believe in Bex and you have money to buy shares and participate RI, then you’ll win or lose as sure as Bex is gonna win or lose. And it gets even better if they announce a nice ratio and additional free shares( not promising). If the sp would hit rock bottom before they announce RI, the question would be if RI could yield enough at all to cover the liabilities? An other plan would be needed? The best thing here in between would be any other good news!
(BATNA - a Best Alternative To a Negotiated Agreement)
IMHO..
There is no guarantee a RI will happen... Just bare that in mind..
GLA!
The RI will be at a ratio, for example for every 100 shares owned, the hold is eligible to but 20 new shares. So buying more now means that you will need to lay out more money when the RI is confirmed than if you don't top up.
Probably right issue for the qualified holders, so you need hold shares to participate in the new shares?
Already 50% down in less than a few days. Terrible decision adding another 5k here. When will the sp stop bleeding
Why are people still buyiing at the current SP,when they could,well be offered shares at a discoint in the rights issue?
IMHO...
No longer invested here, but if FARN were protecting shareholders they would
and should suspend the share! They know the SP will fall until this matter is resolved.
Who is benefitting from the fall is the question... ? Will existing shareholders be a part
of the financing solution, or will someone get a huge slice of the pie for £1 or less..
Let's face it the Board saw this coming and the time to look at solutions was before
it became a problem, not after.... !! Dilution is the most likely outcome,
shareholders need to ensure they are not excluded... GLA...
My sell just went through as a buy.
A better course of action may have been to RNS that they were attempting to get the accounts unblocked. Then once this was confirmed they could propose the RI.
Surely if they get the waiver from IPF the SP will recover and then they do the rights issue at a much higher price than it is now.
Faron Pharmaceuticals Ltd continues active negotiations to receive a waiver from IPF and to unblock the pledged bank accounts.
The AGM is set for 24th March ?
There is no dilution in percentage terms. but how will impact average cost per share.