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Afternoon jazzyjim, I'm sure that Graham Clarke learned lessons from that previous experience. Also from his recent Proactive interview, he again mentioned having OCP as a potential customer on the project doorstep with an annual MOP requirement in excess of our PFS outlined yearly production level. If the current review settles on initial 50% of PFS throughput, we would aim to produce ~ 350ktpa MOP, of which we would need to retain 25% ( 88ktpa )for SOP manufacture, leaving around 260ktpa for external sale, easily within OCP offtake capability. IMO, with them as a strategic investor, Debt Financing would not be an issue. An early announcement of an OCP involvement, should re-rate the SP, making any other Equity raises easier and less painful to existing shareholders. Overall I personally remain very optimistic on the prospects here, and continue to add as my meagre Chemical Engineers pension will allow, as I don't see transfer to AIM as a problem.
@RedRoy Having also suffered the SXX debacle I do not underestimate the difficulty in a small MC company obtaining huge debt/equity finance. The finance gurus there gambled on an all or nothing situation and spent what cash they had as they were confident the deal would come off. It didn't and the rest is history, well SXX certainly is. Maybe they have learned some lessons from that and are positioning themselves to raise more from placings if the financing cannot be finalized in the next few months. Probably a sensible position to take - I wish SXX had done the same
Afternoon all,
My take on this is that it complements the recently detailed staged approach to production and more importantly "income". It's worth remembering that GC witnessed the failed attempts to raise above MCAP levels of debt finance at Sirius Minerals, with resultant Company failure and sell out. Having looked at the "phase 1" proposal, I guesstimate we will need somewhere in the region of U$ 300M to construct the initial mine,MOP & Salt Plants plus add -ons. If 2/3 Debt Financing ($~210M) can be achieved with a further $40M Offtake& Royalty pre-payments, that would leave approx., $50M to be raised via Equity/Strategic Partners& Retail sources. These estimates may be way out, but I am convinced, having suffered through the sorry SXX saga myself, that GC will be determined to achieve "Financing" close, as painless as possible, and get us into a Revenue earning situation as soon as possible, even if that means selling de-icing salt while Phase 1 is commissioned. I eagerly await the results of the ongoing Review and Financing discussions.
Good post Testpack. Personally not concerned about the move to AIM one bit. The board have their reasons there is nothing sinister about it.
If it brings move coverage great, if it reduces some costs great, GC will want to spend the £5.5 million very wisely as it is to be used to put the company in the best possible place to conclude the financing deal.
The phased development plan is also designed to reduce costs and possibly also dilution, of course there will be dilution to raise funds to build the mine but dilution of a much bigger company should be no concern at all to existing long term shareholders. The board I believe have also said they remain very confident of a debt arrangement for up to 70% of the amount required. On that point I wouldn't wish to have anyone else but Hayden involved in working on that part of a financing deal.
Time will tell of course, but I would think that the increasing potash price, mining permits etc are all factors that will boost the company's hand in negotiations. GC is undoubtedly a big asset now and fair play to Hayden for recognising he needed someone of GC's operational ilk last year.
I think there is a lot to be very positive about given the progress made and recent announcements.
So the move to AIM is a good one then or will it carry a negative feeling?
If it looked like the finance was going to be agreed in the next few months as planned then I am sure there would be no move to AIM needed. Looks like they can't get funding at this stage at least and will be needing to raise some funds on AIM market. It was always a big ask for a small 40 mill MC company to secure over 200 mill in debt and over 100 mill in equity investment.
Just spooned through a thick soup of legalese. So it's mostly about making is cheaper & easier to dilute for the purpose of raising funds. I suppose that's better than making it more expensive & difficult to dilute for the purpose of raising funds. So be it.
GLA
I think the issue here is AIM has a reputation for confetti production over SP appreciation but as Testpack has pointed out, being on AIM has it's benefits surrounding raising finance and being less costly than the main market and if being on AIM makes it easier/more attractive for the BOD to use something like Primary Bid for us retail investors to join in any raises in the future then I'm happy.
Just sat here waiting for tomorrow so I can have funds released from my share dealing account and into an ISA earmarked for EML first and foremost. Still have my sights set on divis personally.
Also I too am guilty of not reading the appendices. Can save yourself a question or two if you do however.
That's a good point Testpack.
There are plenty of reasons given in the appendix, I admit myself I have a habit of stopping reading the messages sometimes before appendices, in fact as soon as a I see the standard list of directors etc.
I'm repeating what you said btw on the slim chance that some people have you filtered.
Appendix 2) not 20 . oops
It appears that posters who are questioning the companies motives for the move to AIM, did not bother to read the appendices, this is an extract from Appendix20, which should answer questions.
'As part of the same corporate strategy, the Board has carefully considered whether the continued admission of its Ordinary Shares to listing on the standard segment of the Official List and to trading of its Ordinary Shares on the Main Market is in the best interests of Shareholders. As a result of its consideration, the Board is proposing that the Company should move to AIM for, the following reasons:
• AIM will offer greater flexibility with regard to corporate transactions and should therefore enable the Company to agree and execute certain transactions more quickly and cost effectively than a company on the Official List. AIM will also provide the Company with continuing access to the public equity capital markets should it be appropriate to obtain equity funding in the future. Should such opportunities or initiatives arise or become relevant to the Group, they could entail significant additional complexity and larger transaction costs if the Company were to remain on the Official List;
• AIM, which is operated and regulated by the London Stock Exchange, has an established reputation with investors and analysts and is an internationally recognised market. It was launched in June 1995 as the London Stock Exchange's market specifically designed for smaller companies, with a more flexible regulatory regime. For smaller companies, such as the Company, AIM provides a more suitable market and environment that should simplify the ongoing administrative and regulatory requirements of the Company;
• companies whose shares trade on AIM are deemed to be unlisted for the purposes of certain areas of UK taxation. Following the move to AIM, individuals who hold Ordinary Shares may, be eligible for relief from inheritance tax under the business property relief provisions. The Board believes that this potential relief may be attractive for individuals who are Shareholders. Shareholders and prospective investors should however consult their own professional advisers on whether an investment in an AIM security (as defined in the AIM Rules for Companies) is suitable for them, or whether the inheritance tax benefit referred to above is available to them;
• the Directors expect that the Company would continue to appeal to specialist institutional investors following a move to AIM (such as funds investing in AIM companies that qualify for IHT Business Property Relief) and, in light of the possible tax benefits mentioned above, the Directors hope that being admitted to AIM will make the Company's Ordinary Shares more attractive to certain retail investors. Since 5 August 2013, shares traded on AIM can be held in ISAs; and
• as stamp duty is not payable on the transfer of shares that are traded on AIM and not listed on any other market, this may help increase
Slurms - Yes, agreed that some q's need answering, as some others have also suggested. Mighty was the venting of spleen after the raise so I thought there might be more push-back. Interesting times ahoy.
I think listing on aim may improve the company’s visibility - certainly from a retail investor perspective . Standard listing main market companies can sometimes go under the radar - which I suspect has happened to eml to some extent. There will be a lot of market news around listing on aim around the time when we can expect major newsflow - if nothing else, it should help drive up interest. There is nothing sinister about aim, just some of the companies that trade on it.
Theoretical question.
All my shares are wrapped in an ISA thats been running for longer than I care to remember now, so I don't pay too much attention to tax, but what would happen if there was a take over ...
Would it benefit people tax wise to be on aim due to different tax rates? Or perhaps there's this
https://www.oneadvisory.london/one-advisory-guides/why-list-on-aim#:~:text=Less%20onerous%20regulatory%20requirements%20than,both%20individual%20and%20institutional%20investors.
"There is no minimum percentage of shares that must held in public hands, as is the case with the Full List of the London Stock Exchange. However, in practice, the AIM team may require 25% of shares to be held as a free float. This is a logical requirement as otherwise a company’s stock would not have sufficient liquidity to justify its public company status."
Just thinking out loud here so feedback welcome.
"Anyone thinking of voting against?"
Not at the moment but that's subject to more answers being forthcoming about the switch. Whcih I think will come given the statement
"The Listing Rules do not require a company wishing to cancel the admission of its shares to listing on the standard segment of the Official List, to seek shareholder approval at a general meeting. Notwithstanding this, the Directors believe that as a matter of good corporate governance the Shareholders should be consulted"
At a guess, greed.
Though a buyout would be interesting.
Too many questions. It tells me they don’t want to tell us why.
We need to understand the detail, what are the future plans and why do they fit easier into AIM, could this relate to a buy out? This is a great company with a great project and people, why are they starting to mess about with fundamentals now?
May be a discounted placing ??
I’m not usually one for despondency but I’m not sure I am happy about this.
Smells like I’m going to lose out.
"The Board believes that AIM is a market and environment which is more suited to the Company's current size and strategy and will offer greater flexibility with regard to corporate transactions. Listing on AIM should therefore enable the Company to agree and execute certain transactions more efficiently and cost effectively than a company on the Official List." I'm very curious what "execute certain transactions" that cannot be done on the main market, i think we deserve an explanation at the very least.
Anyone thinking of voting against?