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In my view, the ONLY option for UK based shareholders is to vote against this deal and at the same time for a newco CEO. Someone who is prepared to try and get the best value for UK based shareholders by selling off both plants for c$200m.
The curtains are already closed. The only thing left to decide is how much is left for debt and equity holders.
Craig is also aligned with SPR, lets make no mistake about that.
Next step will be for SPR to purchase Vametco for $100m and they, together with Orion will vote for it. Orion will call in their debt and shareholders will get nothing.
SPR have only participated in the placings in order to have enough votes to try and get this sale through. Anyone who thinks otherwise is just being blindsided.
Believe me I hope you are right.. but we are not party to those discussions and agendas.
Wakey? as in westgate and kirkgate
If that was the case then why participate in recent placings and make significant loans? Their interests are surely best served by the company recovering from here and them maximising their investment and returns. In an administration they wouldn’t necessarily get the assets if someone made a higher bid.
Maybe they are just init to acquire the assests for next to nothing?
2 big ifs - if the company gets the funding (as set out in the last RNS) and if the vanadium price rises (as is many analyst expectations- albeit not necessarily aligned on timescale) then the SP could multi bag from here IMO. Investing at current SP of around 0.5p means worst case it goes into administration and you lose your money, but the potential upside may be significantly more than x 2. It’s a punt using money you can afford to lose based on a risk reward analysis. It seems the company is currently priced to fail, but will SPR, Orion et al really allow it to sink if they believe the vanadium price is more likely to increase than not over the next 12 months?
They burn cash either way, don't think downing tools and going into administration would just freeze things as they are. They owe interest on $105m of debt, staff at the plants will need to be kept on a retainer or otherwise the whole operation would take too much time and money to ramp back up again, the long overdue creditors would need to be paid, some modest maintenance work would need to be undertaken etc etc
Then there's this: ''Additionally, the Company is in discussions with Orion pursuant to which Orion has indicated, on a non-binding basis, that it will, subject to certain conditions (including completion of the Vanchem Disposal), provide further funding to the Group by matching the additional funds paid by SPR on a $ for $ basis up to a maximum of US$10 million. Further details are set out on paragraph 5 of this letter.''
Their major creditors ^^^ don't seem to think just eroding away in administration is the best chance of ever seeing their capital either.
If they limp on 'operating', they are still losing money on every V/kg they produce.
The question that some seem to be asking or at least want explained by Craig is 'how does administration compare with this deal?' - Craig has stated/ implied numerous times in IMCs that administration would in most cases by the worst case scenario but has never specifically answered the above question.
That is totally wrong, at least when you compare what BMN looks like without it and what it looks like with it
Scenario 1 - no deal agreed. BMN is out of cash now and likely have halted operations already, especially as many creditors have balances that are 'long overdue' at Vanchem.
Scenario 2 - Deal. As part of the agreement $3m was received as an advance on May 3rd, a further $5m will be received at the end of May and a further $5m-$8m will be loaned as an advance to Vanchem to pay long overdue creditors and therefore keep the plant in operation - loans that BMN won't have to payback as part of this deal.
i think most would agree that there's a tangible difference between not operating and operating, even if the latter will lead to the former in time, minus 50% Vanchem, if V doesn't recover.
What seems to have been missed by those that think that there is no option but to accept this shoddy deal is that it does not add any upfront cash to the original 50% deal. Thus it does nothing to shore up the company, but gives away another 50% of Vanchem on the hope that SPR will pay out, when it has not even done so properly over the last 6 months.
As things stand it looks like V in US is still at/around the 12 month lows but in Europe and China it's off the bottom and showing signs of potentially heading towards $30/kgV.
'On V prices. We are getting close to the 360 day 0%, which is where we want to be. When, if, this turns green, hopefully within the next couple of months, Vametco can start making us money again.'
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All the 360 day chart is doing is comparing against the same point exactly one year bfeore. In 2023 V peaked in late March then fell sharply to a new lower level through May to August and then fell again to a new lower level in September and then again in December. So as the year goes on that 360 day chart will highly likely show some up as green but it will eventually this year be comparing not against a time when V was $40/kgV (March), not $32/kgV (May through August) but when it was $25/kgV.
So
I don’t think there’s any option but to accept and even then theres no guarantee but without it then it’s over bar any pickings left over
@pb940.
Accept it, or else.
With SPR, Acacia, Orion and the directors holdings, that equates to over 630 million votes. Over 25%,
Kamran Sattars 75 million holding, and questions, will be insignificant. Although i do agree with his stance.
Unfortunately Vanchem has to go, to keep the lights on. It is spelt out on more than one occasion in the RNS.
How odd that Orion have agreed to restructure their loan, as part of the Vanchem disposal. And, if i've read this correctly, provide a further $10 million. I stand to be corrected on this.
On V prices. We are getting close to the 360 day 0%, which is where we want to be. When, if, this turns green, hopefully within the next couple of months, Vametco can start making us money again.
Fingers crossed. But if SPR, Orion and Acacia see a future profit for vanadium, through Vanchem, then i will have to take some sort of positive from that.
Fortune our master "dealmaker" is behind SPR entity, what a master stroke by him.This company is bankrupt but have bought few more months.
I only have 100k of shares now, sold out previously at a loss. I just wondered how many of us would have remained invested if the company had remained a producer for steel only, rather than what turned out to be a pipe dream the battery side of the business.
It also struck me as strange that with the share price tanking no other business saw enough value in the company to put in an offer.
With regard to spr I do wonder whether we have just been played in order for them to profit on the cheap.
The directors themselves have not exactly demonstrated confidence in the company with their share purchases.
Alas the future of the company would still appear to be extremely fragile. From my own viewpoint I would rather suffer the further loss than see spr take control of vanchem.
I understand that the majority of lth’s will think otherwise.
Whatever you decide I wish you all better rewards in the future.
Regards
Aisee
No not in a nutshell, Vametco isn't being sold. I assume you mean Vanchem the few times you wrote Vametco in your post?
But yeah agree otherwise. It was the same in December, a credible plan for the next twelve months to turn around the company but backed into such a tight spot that anything not going their way would cause major distress - the cost of SPR delaying payment, Acacia withholding funds and vanadium price sinking lower shrunk that cash runway to just four months.
This deal seems the only option but medium term survival is far from guaranteed.
See pb940's link
Vanchem to be sold to SPR for $35.6m (min) -> $40.6m (max).
Having already received $11.4m a further $9.5m would be delivered over the coming months. If a Vametco sale agreed then over the following 3 years a further $15m -> $20m would be disbursed.
Based on unaudited management accounts for 2023 Vanchem's loss for 2023 was $32.2m (VametCo not diclosed).
Following a Vametco sale (and provided Orion agreed an expected ADDITIONAL $10m of loans) BMN would have $8m of cash reserves and $90m of debt.
The company have told the insolvency people that if all the above came to pass and "assuming unconstrained production and an average selling price of US$30/kgV the Company would have sufficient working capital to sustain operations" they can limp on.
The insolvency advice is that any deviation from execution or expectations and it is probably curtains.
Impressive Bunch
https://www.bushveldminerals.com/about/shareholders/
I can't see that circular with responsss on the link on the website, or anywhere else for that matter...maybe it'll get uploaded shortly.
Does anyone know what was invested by BMN in Vanchem, just to turn the knife on how cheap this is being disposed and the shell of a company being left with the debt mountain