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GDR by chance?
DX Group can, dropped to below 18p last week will be 40p, (after they sort out the mess of their corporate governance internal investigation), with what appears to be, excellent profit turnaround figures, already back to near 25p in a week - keep watching.
at these levels, why would you not invest.... this can easily get back to 14/15p on proposed scheme news and the sanctioning of court. What other share can give you 60/70% return in 3 months?
Because if (big if!) SOA agreed, that means a line is put under past issues and the FCA accepts the new lending practices are responsible. Looking forward, the business becomes attractive to lenders and investors again.
Not sure that means anything though, assuming funds aren’t ring fenced… fundraising cash comes in and settles liabilities of the business and/or is used to lend. All part of the same pot.
Re the payout percentage - I think that based on the current loan book and the fact that a rights issue might be required that getting to £100m equity feels about right.
That would mean total payout of (say) £200m, which compares favourably to the pre-problems market cap of >£1bn. I get that the business will be less profitable going forward after it’s wings are clipped, but 50% payout ratio just doesn’t seem that harmful as long as the business can start lending and producing some pretty fat margins going forward
Thanks Hereshopin. I think the institutional placing was the bit I missed. Can they do that at a discount to share price without offering to existing investors first? ie wouldn’t the institutions just be underwriting the risk that the entire rights issue isn’t taken up by private investors?
thanks for the great advice :) never thought of that
not a question to ruffle your feathers , all i wanted to know was what pot do Amigo normally play with , to get an idea what funding they require, be it RI or RI + LOANS , or whatever
to buy / sell was not a question raised
Investor6:
Price only rises if the agreed compensation leads to positive equity in the business. Most recent balance sheet shows negative £117m of equity, so (broadly) the same amount of compensation claims need to be written off to get to £nil equity value. Agreed no RI until there’s certainty both on SOA2 and ability to lend going forward. But we have no ability to forecast what the SOA agreement will look like, so there’s no way of predicting what happens to share price other than hope value.
I was surprised that share price did what it did following the RNS. Yes, there’s a whole load of risk here, but isn’t the real point that the board are talking about a rights issue which means they have a degree of confidence that an agreement will be found that leaves the business solvent?
If compensation pays our 50p in the pound, that leaves us with around £50m of equity. If there’s half as much lending when the agreement is reached than before the issue started (at which point there was around £200m of equity in the business) then that would mean a capital raise of £50m required to get to a corresponding amount of equity to loan book as before.
To me, this seems like a reasonable outcome for all concerned.
if the RI is 1 year away
what money are they going to lend out ?
is that not what the RI is for to get money to lend
ok may just be me , not the best knowledge on RI hence me reaching out
i looked at its simply that there are 475 mil share holders at market value of 8 p (market cap 38mil)
anything over 38 mil is double your holding value
and they will need 100s of millions to be raised
thanks for help
Please listen to the webcast and read article in the FT.
Firstly, the rights issues in 1 year away it is NOT before FCA decision.
What will happen after the FCA decides SOA2 is ok (price will rise)
What happens if the FCA allow lending (price will rise again) before the Court decision
After that, What will happen when court agrees with FCA (price will rise again).
Rights issue is a year away.
Note that they made £2 million profit even when not lending!!!!
You will never see these shares at 8p or less NEVER. In a year their dividend may be 12p or more.
Your are all missing something - Yep
You don’t need the cash. You can just sell your rights if you don’t have it. Your stake in the business will be lower but you’ll get the same cash for your rights as the discount. So all is well (assuming all the rights are taken up…)
yes i get that , but again a holder with a market value of today with say 50K shares (£4000) will need to find £10500
i know the ratio will be split etc
but its asking a lot from shareholders, not everyone has that powder ready
its a question to try and ascertain how much cash they require to start again
IE if you have 50000 shares at 8p = £4000
How could they ask for 100 mil (EXAMPLE )
to get that they would need 21p > so for your 4000 shares £10500 RI
I cant see how this is going to happen, unless the share price rockets
RI is a no go
i may be wrong but this is what i have come too for my understanding
RI is normally less than your current value held
Not sure what’s changed - surely we are the same now as before. If equity is negative due to compensation payouts then the business goes bust as nobody would subscribe for rights. If equity positive then any rights issue proceeds go to funding new lending. What difference does the share price at the point of rights issue make? Issue needs to be at discount to market price - fine - and the price set/number of new shares just determines how incentivised existing shareholders are to take up their rights.
What am I missing? We are the same as before the RNS, albeit now knowing we may be 4 months from resolution if all this
Price under 10p after schemes approved?? nah…..
currently 475mil at 8p = 38mil
i cant see that they can ask for more that the 8p ???
this would need very large pockets , if most have bought in at this price
i just cant see how they can get a successful RI
worrying
i am not de ramping - i am invested
100 mil was just an example
I think the BOD will want a lot more than £100 m to be raised from the RI. What happens if the price stays under 10p ? Everyone assumes the price is going to go flying up on the news of a SOA but at what costs. This is a seat of the pants share now. Very high risk equals high reward.
Hi Quick question on the future RI, for some AMIGO long term knowledge
How much money do we anticipate Amigo will require from the RI
With 475 mil shares in circulation , would be nice to have a rough idea how much per share we are looking at forking out
as i see it if they want 100 mil , with 475 mil out there > will be 21p per share we own
any ideas how much they will be looking for to start up again?
Thanks