With many, many thanks to the CEO’s from Zephyr Energy, Power Metal Resources, Scirocco Energy and SpectrumX who entertained and informed us at last night’s investor event. To see their video presentations view here.
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GFD - absolutely no hostility on my part, we are all on the same team!
I’m merely pointing out that there is no relevance to an old dormant company, as someone suggested this may have been set up for a reason connected with the sale.
If EUA wanted to transfer assets they could easily set up a Clean new company within 24 hours at a cost off about 100 quid.
GFD……..” can you show me a company which has become an AIM Rule 15 company which continues to hold a major asset? I was merely demonstrating how the Rule could be circumvented such that, e.g. WK and our Urals assets need not be sold in the event that MT, flanks and (possibly) Nyud are sold for in excess of 75% of the current MCap”
As I have said a sale of either MT or WK would fall under rule 15.
Why would the company want to avoid rule 15, what is the potential benefit?
Under rule 15 following the completion of a transaction the company have to provide the market with an update in regards it’s investment policy.
Rule 15 really means very little and I personally think it has zero relevance or impact to the company,, other than the transaction quality’s as one.
osf - I'm not looking for a fight, so I'm not trying to peck your head at all. I merely asked you two questions, neither of which you have answered.
Do I mean a Rule 15 cash shell? No - that's what the Rule itself calls a company which has become one to which Rule 15 applies. I've never suggested that a purchase would be made - I see us using the Rosgeo JV to effect a merger with whomsoever buys MT, flanks and (possibly) Nyud once the sale has been concluded and the Special Dividend has been distributed.
Maybe this discussion has run its course. Whether it's the weather or something else, peeps seem to be getting a little fractious. I'm going to leave it now. I'm happy that I've addressed the issue and if peeps don't like my solution, that's their choice. We'll all just have to wait and see what transpires. But remember, in the corporate world, there are no insuperables.
Well GFD, that is nicely put together. My though, you do like the sound of your own voice old son. Hope you are right and it happened sooner rather than later.
Gfd, there is nothing in what I posted you can peck my head over, so please dont try.
I didnt state which asset(s) would be sold to get over 75% current MCAP, only that that is what the consideration test requires. And as it only needs one of the 5 tests to apply, then given the last balance sheet was cash rich following the placement, that is the most logical.
By Rule 15 company, do you mean cash shell? If so the rules state they have to make an investment, purchase or rot, within a set period of time (6 months, I believe, though may be longer), and with Rosgeo JVx8 or 9 waiting in the wings, and dividends promised if and once the sale is successful, I'm not worried about their ability to do that.
James, why so hostile? My mention of the dormant company was simply to demonstrate how the legacy company, EUA#3 (East), could continue into the future as Eurasia Mining plc, using the Limited company as an interim vehicle. To call it a 'red herring' suggests that I've made it up for some nefarious purpose.
osf - can you show me a company which has become an AIM Rule 15 company which continues to hold a major asset? I was merely demonstrating how the Rule could be circumvented such that, e.g. WK and our Urals assets need not be sold in the event that MT, flanks and (possibly) Nyud are sold for in excess of 75% of the current MCap.
WK and the rest of the Urals assets have to be worth more than 25% of the current MCap of the Co, wouldn't you agree?
Not much to contribute here, but just to say to MrYFronts the company did state that the proposal they have chosen would trigger Rule 15, in their shareholder q&a response:
"Our RNS of 12 May 2021 stated the Company had received a proposal for the potential acquisition of substantially all of the Company's assets, and that the transaction would make the Company subject to AIM rule 15 (any disposal which exceeds 75% in any of the class tests is deemed to be a disposal resulting in a "fundamental change of business")..."
Whilst technically their rns of 12 May was not as specific as they stated here, and did indeed leave room for questioning which proposal was the one that brought Rule 15 into play, I think from this it seems clear they arent trying to avoid it..?
I personally dont see Rule 15 as that bad, certainly not something to be spending god knows what on legal fees to try and get around it.
It's been pointed out that it's likely to be the consideration test that applies, which means sale proceeds receivable from disposal, exceeds 75% of the total company MCAP at close of business the day prior to announcement. I think we are all hoping whatever ends up being sold goes for far more than that. But that is the yardstick IMO.
This company “Eurasia Mining (UK) limited is a red herring.
It is a legacy company 100% owned by EUA plc and has never traded. It was originally set up to hold a couple of investments, one of which was sold years ago, the other written off in 2015.
The only item left in that company balance sheet is a debt due from the plc in the amount of £199k.
IMO the only reason it still exists is that the Company secretary has not completed the housekeeping it for tax reasons. In order to strike the company off the register the debt would need to be written off in both that company and the plc holding company.
This would be neutral on consolidation for accounting purposes but the tax treatment may vary between companies as they were gains realised on disposal of third part investments. Therefore it may not be tax advantageous to write of the balances.
Guy's It's the Lords Day Today
Eat Bread and wine
Be Kind To Each Other .
Eurasia Mining Limited, has been a dormant company for many years, so my thinking is why form a company and leave it dormant, maybe it is another piece of the jigsaw puzzle which is about to be put in place.
GFD you are absolutely astounding. You have managed to change the actual meaning of bifurcation to suit yourself.
It has no relevance whatsoever and the same for the Gordian knot.
As for binning me , you are such a narcissist its impossible.
Sorry - our posts crossed James. To answer your question, go back to the basics of why we have all been scratching our heads as to how we could achieve the disposal(s) without triggering the provisions of AIM Rule 15 in relation to what remains. We have touched upon this before and I asked whether anyone could quote or cite an example of an AIM Rule 15 company which continued trading (e.g. in the Urals) but no one came forward with any examples. So it was merely a case of arriving at an AIM Rule 15 company with the absolute minimum of assets (the Rosgeo JV) whilst maximising shareholder value when, as things stand, the value of the parts exceeds the value of the whole.
Sorry - just an afterthought on the Tax side of the structure that I have suggested. Bifurcation does not give rise to any tax liability. And, on a sale of the assets by EUA#2 (Kola - MT, flanks and, possibly, Nyud) the tax implications are no different, under my scenario, than they would be were the Co, itself, now to sell those assets.
In any event, there's more than one way of skinning the cat when it comes to the disposal of assets since this can be achieved simply by issuing shares in the holding Company (parent) to effectively shift ownership from the 'seller' to the 'buyer' and the issuance of shares and a change in control (ownership) done in that way does not have any tax implications so far as I can see.
Good post GFD a lot to think about. Someone pass it on to Keith!
GFD I agree that as an 80% shareholder we control those assets in The MT subsidiary. Therefore as you suggest we can effectively do as we choose with those assets, for example “disposing” of them into another subsidiary.
Thinking some more on this, it’s possible that this disposal could be done without cash involved and merely an inter company transaction used to move the assets into the Newco. However the structure of the Shareholding of the Newco would need to replicate the existing structure of the MT subsidiary. Therefore what would be the point of doing this if this is to be disposed of to a third party, as EUA can merely dispose of the asset from its current structure?
Hi James. Tax issues apart, since I know nothing about them, I'm not seeing the difficulty which you apprehend. It's not uncommon for subsidiary companies to have multiple shareholders (as, indeed, does EUA itself) but those companies are our assets by virtue of our being the majority shareholder. It would be a strange state of affairs if a subsidiary could dictate to the parent and yet more odd if a minority shareholder could dictate to the majority shareholder - a bit like the tail wagging the dog?
Eurasia Mining (UK) Limited is indeed a dormant Co but it has been maintained, on the Register, as such and has not been struck off. Value must have been seen in keeping it alive, at some expense, and I see it as a convenient vehicle in achieving, albeit on a transitional basis, what I have proposed.
MrYFronts has posted, I see, but he is conflating 'transactions' with the proposal. The proposal is complex and involves a series of transactions, in the way that I've described how it could be structured, and it may well result in an AIM Rule 15 company - indeed, it's inevitable if all that the Co has left is the Rosgeo JV.
Complicated, it is but it's a demonstration of how things might be done which addresses the issues with which we have been struggling. At the end of the day, we do indeed have three great teams of lawyers on the case and I'm confident that it will all be done in the best possible way to maximise shareholder value.
I think that we are close. It's for that reason that I have further increased my holding again, on Friday.
Wonder if we can have a blue and positive week ahead. When can the tide and sentiment turn. ??? GLA.
GFD - my point is I don’t believe EUA can just spin out the assets in the MT subsidiary in a s h a r e for s h a r e exchange.
EUA do not own all the shares, so I think the subsidiary would need to buy back that minority interest first before it can be spun out, which causes its own set of issues. Also a movement of assets could trigger a big capital gains tax liability in EUA , as a transfer for tax purposes would usually need to be accounted for at market value of assets. It all sounds pretty complicated, but I guess that’s why we have the best M&A and legal advisors on board :-)
@Ian - “It does seem a very likely scenario when you consider GFD has found Eurasia Mining plc is registered at Companies House.“
Of course it is registered at Companies House - It is a UK listed company and this is the company you own shares in!
If you mean Eurasia Mining (UK) Limited, this is a company that was incorporated in 1995, is now effectively a shell and has basically been dormant for the last 15 years, so not sure of any relevance.
Thanks for all of the positive comments and feedback. James, I'm slightly bemused. Our subsidiaries are what they are and the mere fact that there are others with whom we share stakes in those companies doesn't alter our ability to deal with them since, apart from anything else, we are the majority holder. Were that not the case, we wouldn't be the parent company and nor would we be able to deal with them as our own, albeit shared, assets.
cj - my lengthy post was not a response to your barbed question. It was mere coincidence that you had posted that while I had been busy composing my post, with dinner and the Times crossword intervening. Mein host gets slightly agitated if I spend too much time on my phone. Anyway, I have tried being civil towards you and you have thrown it back in my face. For that reason, you've earned your place in my Green Bin.
Funny you should say that :-)
All the best, mate!
Better take your toolbox Ian ;-)
Good morning all,
Just looked in and seen a lovey post from GoodFlyingDuck who has put forward a great hypothesis with the way this could play out, with our limited information!
It does seem a very likely scenario when you consider GFD has found Eurasia Mining plc is registered at Companies House.
GFD is one of the good guys and has backed up his theory with evidence to support it!
Thank you GFD and enjoy the rest of your weekend :-)
Becky and I are just off to her parents as we have been invited round for Sunday lunch!
Have a lovely day everyone and roll on next week, this stock is getting very exciting and with everything, the BOD do, only adds to the intrinsic value!
One day the share price will reflect this, good luck all.
Thank you again GFD
All the best
As we currently don't know for certain what is happening regarding a sale then anything is supposition.
We have several proposals for acquisitions of certain assets of the company and a proposal from a credible party for the potential acquisition of substantially all of the company's assets and this is the one they are going after.
One of the potential transitions proposed is one to which AIM Rule 15 would likely apply.
But does this relate to the one they are going after or one of the other proposals.
Good point. The mind boggles at the amount of legal fees involved.