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Rastuss - there would be dilution in an RTO as well. Whatever happens next there is going to be dilution. The point is that the value of the asset that is put into the company should increase the share price enough to outweigh the cost of the dilution - not necessarily instantly but over time.
Also, what is the alternative? CHAL remains here with no income and no substantial assets? It would have to raise money anyway just to keep the lights on.
MarketGunslinger: so, a placing is imminent? I think most shareholders would prefer a RTO.
Alan2017: I think you’re right about Angus. What’s your theory as to why the Earl of Lucan and Mr. Tidswell-Pretorius have joined the Challenger Acq. Board? Is there some family link between the latter and the estimable Mr. Manclark? I don’t understand the latter’s involvement here otherwise. The two do share an address in Edinburgh with a law firm there.
There are a number of ways that this could be done:
The company would do a raising at a fixed price (but hopefully one that is higher than where it is today). It would be done wholly to a selection of private investors who would be made inside (ie aware of what the asset that was being vended in was). They would look at what they think that the asset could be worth in the future and make their investment (at a premium) based on this. The reason that they would buy in a placing as a premium instead of on-market is so that they could buy shares in significant quantities.
The company would pay for the asset in a mixture of cash (from the placing) and also shares (at the placing price). The seller of the asset would agree to this as they would be in receipt of some instant cash and also share that would likely go up in value.
They could farm-into a project where they agree to take, say, 50% of the asset in exchange for paying for all of an oil drill (if it was an oil project) and giving the owner a free-carry (where they do not have to invest any more money) through to production. The company would still need to raise money but the share price should increase once they show that they have a potentially valuable asset and they can raise capital at a premium to the current share price in the way described above.
In the first instance the seller of the asset is able to generate revenue by receiving cash and being able to sell shares on the stock market. In the second instance, they know that they are going to be funded through to production without it costing them any further money.
There are a number of other options as well but these are the first that spring to mind. The bottom line is that whatever happens the company will need to raise capital by issuing shares. If they have a very good asset then they may be able to issue these shares at a premium of the current price but failing that they may have to issue at a discount. Either way, they will raise the capital based on the fact that the value of the company with the asset in it will be far greater than it is today.
MarketGunslinger: vended=sold. How would Challenger pay for any asset that Mr. Tidswell-Pretorius might want to “vend” it? The company has total assets of £44,000 and borrowings of £2 million. It’s the strangest balance sheet I’ve ever seen. Its outgoings must be tiny to allow its directors to describe it as a going concern.
barentpeter - I don't think that this will be a takeover by a private company. It is far more likely (99.99% IMO) to see an asset vended into the company at the behest of Tidswell-Pretorius.
That is what I am have invested for anyway as Tidswell-Pretorius has been very successful at doing this in the past - and making early investors an awful lot of money along the way.
Yep. Always a bounce here. Full listing so no threat to delist. Lots of private companies must want to list and raise cash and this is cheap basically.
0.1p is clearly the magic number if you want to be in the game with the same risk-profile as Tidswell-Pretorius, but like I said the other day even 0.2p will be a multibagger over the next 12 months if Tidswell-Pretorius can do the same thing with assets here as he did with Horse Hill for UKOG and Angus.
This is an important paragraph.
- at 0.1p.
“ The Convertible Notes 2021 are unlisted, unsecured, transferable and must be redeemed by the Company on 19 May 2021, at the Company's option in cash or in Ordinary Shares at 0.1p per Ordinary Share.”
And why I think around 0.1p is a fair punt, gives a bit of protection from if they wanted to play the consolidate and then issue more shares game as the conversion price would adjust to the equivalent of today’s 0.1p. (They will issue shares but 0.1p should be the base.)
Without that paragraph I would have said no until they converted in to stock and used their price as a gauge on where I would buy, if at all.
MarketGunslinger,itisagame: thanks for the background. There’s something going on, it seems, with Mr. Tidswell-Pretorius’s appointment to the Board here. Even if it’s just to provide him and the Earl of Lucan with a ringside seat for any RTO negotiations, which could be of use at some stage with Angus. The two companies are linked in any case, through at least one large shareholder.
Re British aristocrats, no, no class war, just observing the record of the Earl of Clanwilliam, at NMC in particular, where he’s taken substantial director’s fees and presided, as chairman of their audit committee, over the most outstanding stock market scandal to hit London for many years. I’m sure he’s good company but I’d prefer a competent person to a clubable one on the nominations and audit committees of a company in which I was invested. I don’t know much about the Earl of Lucan or why he brought Clanwilliam to Angus Energy.
I agree with you on the spread - it is very frustrating but I have just put it down to a cost of doing business and have been acquiring regardless. I have not burnt all my powder yet and will definitely pick up more if the price drops, but at the same time I do not want to miss out if it spikes. To be honest, I think that anything below 0.2 will be a multibagger over the next 12 months - though I have also been buying at the best prices I can.
curiosity is getting the better of me here.
tids sales were partly not his fault, his holding was held as security and sold by usa200 (or whatever their name was) because the value of his stock dropped they sold to cover the margin requirement which tanked the stock.
i say partly his fault because he was the one who put the stock in to that facility, the placings and multiple failures to meet of Vonks publicly made targets and over egged expectations of "Star wars" results from the worked over wells.
Ive decided i will probably take a small speculative punt here eventually, but i want to pay around 0.1p and not the 30 % spread, i want to make the money from my trade, i dont want to just over pay for the pipers (mms).
Rastuss - I would respectfully disagree with you.
Tidswell-Pretorius is the man who discovered the Horse Hill asset and set up HHDL which UKOG first bought 7.5% of for £450,000 in December 2013 when their share price was 0.9p (market cap £7 million). Less than four years later UKOG had purchased a total of 49.9% of HHDL for an additional £4.8 million and they had a share price of 8.9p (market cap £317 million). This does not happen as you put it “by plain luck”. Tidswell-Pretorius clearly knows what he is doing.
Tidswell-Pretorius was also part of the team who took Angus from an IPO listing of 6p (market cap £15 million) to a high of 36p (market cap £85 million) in just under a year. Once again this was not an accident.
So, if you had invested in UKOG when they first bought into Tidswell-Pretorius’s Horse Hill project when their share price was 0.9p then you could have made up to ten times your money if you had sold out any time in the next four years. Likewise, with Angus, if you had bought for 6p in the IPO you could have got out for up to 6 times your money in just under a year. All of this was due to Tidswell-Pretoius and the projects that he provided to both companies.
I am not denying for a second that things went south dramatically for both UKOG and Angus after September 2017. I am also not excusing Tidswell-Pretorius for any role he played in this – though at that time you have to remember that Angus was being 100% controlled by Paul Vonk. But I am saying that Tidswell-Pretorius made a massive contribution to tow separate companies peaking at a combined market cap of over £400 million.
The point is, he knows what he is doing and investing into projects that he is involved with at an early stage is a proven way to make money. Of course you can’t hold on forever – this is AIM and what goes up almost always comes back down again but if you make over 5 times your initial investment and do not take out some profit then, quite frankly you got massively greedy and any loss is your own fault.
I have no idea what Tidswell-Pretorius is like as a person and I could not care less that his “chums” (as you put in in a slightly class-war kind of way) happen to be members of the British aristocracy. All I care about is the likelihood of him making me money via Challenger.
With the Challenger share price at this level and Tidswell-Pretorius’ track record of massive early stage success in raising the market cap and share price of companies that are involved in his projects then I think that over the next year this could be a five to ten bagger based on his involvement alone. This is why I have invested. If you think that everything that Tidswell-Pretorius does is lousy then nobody is forcing you to invest here – you can stick with Angus. However, I know where I would rather be…
I’m less impressed. He’s of questionable judgment. He was sacked from the Board at Angus for failing to reveal he’d quietly offloaded a large part of his shareholding. He’s still in a senior role there and is arguably in control still. The Earl of Lucan is his chum. The current Chairman of Angus, the Earl of Clanwilliam, is Lucan’s chum. Clanwilliam is on the audit committee of their Board and is chairman of two other Board committees. He was chairman of the audit committee at NMC (I assume everyone knows what transpired there. If not, I recommend looking it up). His involvement in one or two Russian companies has raised adverse comment. He’s a bon vivant and a dilettante. Mr. Tidswell-Pretorius’ role in Horse Hill could well be plain luck. I would take no comfort from his role in the movement of his previous companies’ market capitalisation. Angus is worth about £5mm. now. I’d take no comfort, either, in the fact that he’s lost a fortune. How can you interpret these as factors in his favour?
Tidswell-Pretorius was ousted from the Angus board in 2018 by the then CEO Paul Vonk. He got his revenge by threatening an EGM to get rid of Vonk and forcing him to resign before George Lucan arrived as CEO. He is still a major (4.49%) shareholder in Angus but has nothing to do with running the company from an executive position. As itsagame has pointed out Tidswell did also lose millions in Angus from the top to where it is now.
One final thing that is worth noting about Tidswell is that he is the man who was originally behind UKOG’s Horse Hill. He acquired 65% of Horse Hill from their then owners Magellan Energy when Angus was a private company and was also in charge of the first drill that proved the oil was there. The Angus share of HH was all sold off when Paul Vonk was CEO – maybe this was one of the reasons that the two of them fell out so badly?
In short, two things to remember about Tidswell-Pretorius
1. He “discovered” Horse Hill – which at one stage drove UKOG’s share price to 8.9p and it’s market cap to £317 million.
2. He was involved in Angus when their share price was driven up from their IPO of 6p to a high of 35p and a market cap of £85 million.
Anyway, my point is that Tidswell does have a track record of discovering major assets and getting company share prices and market caps to increase massively. He would not have joined the board at Challenger unless he thought that he could work some magic here too. That’s why I am in.
Investors in AIM companies must be more naive than I thought if they will be willing to stump up enough money to repay the debt in this. Or for any other purpose, really.
Re Mr. Tidswell-Pretorius, wasn’t he ousted from the Angus Board last year by the Earl of Lucan? He still works there, as a non- board director of something or other. That followed closely on the earl’s ousting as MD of Mr. Vonk and the appointment of the amusing Earl of Clanwilliam as Chairman. Are Pretorius and Lucan in cahoots here?
Or mass placings, consolidations and more placings.
No it’s not worth it as a stand alone listing to someone who just wants a listing, that is unless they can renegotiate the debts or if the debts are held in a subsidiary that they can liquidate that removes the liabilities from the plc.
But if they are doing this working with the debt holders to enable the company to raise capital from shareholders to repay the debt holders then it makes sense from the debt holders point of view.
They both have extracted more in wages from shareholders at angus then what the company has generated, if they can generate a return from something here with out extracting cash from new shareholders (ie financing against a revenue generating asset) here I would be amazed and I would love to see it for once over the normal style of death spiral financing.
In Tids defence he did lose millions in angus.
Itisagame: I’m still struggling with the cost of buying this, to someone who just wants an AIM listing. It’s not worth it, is it?
Re lordships, that may be true of Game of Thrones or bs “lordships of the manor”. However, the 8th Earl of Lucan and his friend and colleague the 7-fingered 8th Earl of Clanwilliam are bona fide members of the aristocracy. Not that that makes any difference.
Wow, some coherent discussion on the CHAL board. I genuinely had double check that I hadn't opened a different board by accident.
He will be a director of the new company and will be creating himself a new income stream, new company, new remuneration levels, new credit lines, ready to extract.
You can’t raise capital outside the stock market that you don’t need to ever repay back, but if you can “invest” $100k in a shell, put yourself in a paid role and then extract millions over years if you can keep the idea of a return going.
Use the “lord” for The idea of “ A Lannister Always Pays His Debts” and it goes along way.
PS a lordship can be purchased by anyone and costs £24.95. And If you use the title you are a certified bell***.
It’s not what chal was, it’s what the listing can be used as a vehicle for...
Yes, I can see this, though it seems to me recently that every time there’s a sell it’s at a 10% discount to the previously published buy price and vice versa. I don’t understand people’s confidence in the 8th Earl of Lucan. How has he earned this? Am I reading the latest accounts right in terms of directors’ salaries and emoluments? A total of £33,000. Why is he here? There must be something behind it.
People are not necessarily gullible most just timed their trade wrong, a small few have made good money from trading chal, this has always been a speculative stock and a lot of people get caught out by buying on the spiked days that a few use to sell, many people only buy this because it can rise 50%+ in a day on little or no news, deep down they know it can drop the same way on a couple of trades but where the fun in acknowledging ?
Been as It looked like this was going bust before tid and luc arrived, i think There is Now a chance for a longer term future for the listing, everyone who purchased in the past 18 months up to ~0.2p could probably recoup their cash and possibly profit if they traded on the next few spikes or during the rule 15 period, but long term they can’t magic cash from nowhere, it will eventually be raised from shareholders one way or another.
Itisagame: thanks for this! It all hangs on the suspension of disbelief on the part of shareholders, it seems to me, who are screwed whatever happens. Are people really so gullible? How did people who are prepared to watch this or any other possible scenario play out acquire the money to buy shares in this in the first place?
I’m not a mind reader but I’ll give fortune telling a go and I will guess how the story plays out, as follows:
They flip an asset in to chal, by tid and luc taking a director roll, they convert the $100k debt to force the approval at a Gm with around a ~25% holding that they will have plus stock the other directors hold.
Then some of the old debts get converted to stock and maybe partly refinanced, they might knock a bit of debt off to make an rns look good, knowing they can make it back later / plus some extra cash is raised to finance the RTO period, say £200-£500k. Converted stock is sold off by the big debt holders in to a ramped up speculative share price, they are happy they recovered some cash and with them paid back tid and luc can borrow new funds from them on new terms with more fees.
Tid and luc don’t care about the $100k, they get it back in wages, fees, perks, kick backs one way or another, they might have even been fronted the cash by the RTO target.
Asset will probably be a US oil play to utilise chals US losses, plenty of Texas and Permian assets going bust, or urgently need refinancing, or are being taken over by debt holders who now wanting to off load them, so they can be taken over with low upfront cost, (ie the uk based £1 saltfleetby deal at angus) but lots of longer term costs or repayments needed, it moves liabilities from one book to another.
RTO completes, stock at some point gets consolidated, re raises capital, might have a bit of a future but all old holders are diluted out of the equation.
Possible The big debt might not be converted and is instead repaid by a fund raise instead But that’s capital heavy and conversions are easy to flip, and every party here is skint.
if not all converted early its converted down the line, but in the end lots of cash will be extracted from the stock market to pay for it all.
This has all been foretold in my crystal balls, they are wrong a lot of the time, but more often by luck they sometimes speak some truth.
If it goes Sub 0.1p, it could be worth a quick dabble on the idea that conversions will happen at 0.1p but who knows.
Ps I’ve Still not purchased any, still watching and waiting, and hope for it to be entertaining atleast.