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Mole, I notice the annual franchise tax report is due May 15. The Comptroller is required by law to forfeit a company's right to transact business in Texas if the company has not filed a franchise tax report or paid a franchise tax required under Chapter 171. The law also requires the Comptroller to give at least 45 days after the notice of pending forfeiture is mailed before the actual forfeiture. Any franchise tax deficiencies must be cured during that period to avoid the forfeiture of the right to transact business in Texas. If the corporate privileges are forfeited, the entity will be denied the right to sue or defend itself in a Texas court and each director or officer will be liable for the debt of the entity. See Texas Tax Code 171.255.
https://comptroller.texas.gov/taxes/franchise/coas-instructions.php
Earlier in the year I looked up the status of all 5 Texas entities and they were all active. I'm not exactly sure when this was but the file I copied it to was created on 26/05/2020. Assuming the tax was due on the 15th May and the 45 day notice was given, FRUS's Right to Transact Business in Texas may have been forfeited since the beginning of July.
Mole, I would be very surprised if the BoD were unaware of the forfeited status of FRUS but nothing can be taken for granted. However, FRUS can be reinstated as laid out here: https://comptroller.texas.gov/taxes/franchise/reinstate-terminate.php and there must be a good reason why the BoD has maintained FRH and paid its Texas franchise tax.
Welloiled someone better email Bryce and tell him to sort that out as well given that is where the assets were last spotted.
It would be funny if it wasn't so serious. I doubt its cat and mouse game - more likely a consequence of losing your Cayman legal representation, Chief Counsel and Company Secretary (Levan) and your admin staff.
Cheers Mole for the info. With respect to FRUS's Right to Transact Business in Texas being forfeited, it refers to "File missing reports, information reports and/or payments" which links to https://comptroller.texas.gov/taxes/franchise/. It looks to me that FRUS, together with FRC, FRI and FRU have not paid their Texas franchise tax.
Thanks again, Mole. It seems like FRR and their lawyers are trying force a debt for equity deal by taking Hope and Outrider to the brink of either mutually assured destruction or death by bankruptcy through legal fees. Not sure how we are paying our lawyers (or retaining them given that we haven't paid some of the previous ones !)
They control 100% of votes through new holding parent company FYI. No need for shareholder approval as before
Zen - yes but its not that straight forward they would REDOMICILE BY WAY OF MERGER and as I've said before for that they need a shareholder vote. It one of the few areas where they would need to come back to us. They can shun assets about but not beyond the control of the group company we own. However, if the company is staying put there is no need to move it.
I'm now interested again in what making FRR US which is wholly owned by FRC status of Forfeit means given that was the last location of the block 12 asset they tried to move.
At some point here either the company or a liquidator will tell us what is going on. I think i've been consistent since 2018 on this the company have to either beat Outrider, pay them off or accommodate them in a debt for equity restructure. If Outrider can't prise the asset away the later is what will happen and the other court actions will all be folded as a result of the mediated settlement. As I keep saying this is where we were in 2016, 2017 and 2018. If Outrider can prise the asset away we are left ruined.
Thanks Mole. Important then, for our sakes, that the four Cayman entities still exist. More three-dimensional chess moves from Zaza, Steve and their lawyers: first seemingly acknowledging the imminent disappearance of the companies and the creation of a new Georgian legal entity; now acknowledging their continuation in the Caymans as legal entities. Totally baffling. Just waiting for the next move to baffle us further.
The bit you want I think is:
2. THE COMPANY AND ITS SUBSIDIARIES
2.1 The Company was incorporated under the Cayman Islands Companies Law, as an exempted company with limited liability on 17 May 2011 and is registered in the Cayman Islands with number 256380. The principal legislation under which the Company operates is the Cayman Islands Companies Law.
2.2 The Company’s registered office is located at the offices of Walkers Corporate Services Limited, Walker House, 87 Mary Street, George Town, Grand Cayman KY1-9005, Cayman Islands (telephone:+1 345 949 0100). Upon Admission, the Group’s principal places of business will be located at 3040 Post Oak Boulevard, Suite 1100 Houston, Texas 77056, United States (telephone: + 1 713 585 3200); and 12 Paliashvili Street, Tbilisi 0179, Georgia (telephone
+ 995 322 25 24 12).
2.3 As at the date of this document, the Company has no subsidiaries. Upon the Merger becoming effective (prior to Admission), Frontera Cayman will replace Frontera Delaware as the ultimate holding company of the Group, which comprises the following subsidiaries, all of which (save as disclosed below) will be wholly owned either directly or indirectly by Frontera Cayman and over which Frontera Cayman will be able to exercise 100 per cent. voting control:
Name Country Principal activity shares held
Frontera Resources Holdings, LLC Delaware, USA Issuer of the 2016 Notes 100 per cent.
Frontera International Corporation Cayman Islands 100 per cent.
Frontera Resources Caucasus Cayman Islands 100 per cent.
Corporation
Frontera Resources Georgia Cayman Islands 100 per cent.
Corporation
Frontera Eastern Georgia Limited(1) Georgia Group operating company 50 per cent.
(1) The state owned national oil company, Georgian Oil and Gas Company owns the remaining 50 per cent. of the shares in Frontera Eastern Georgia Limited, a pass-through entity that exists for operational and execution purposes only and
operates on a no profit/no loss basis. Details of the profit sharing arrangements in respect of Block 12 are set out in
paragraph 1.6 of Part VI of this document.
Can this be reversed so that the Delaware company reverts to being the parent company ?
The Cayman company was 'established for the purpose of merging with, and into, Frontera Resources
Corporation, a Delaware corporation (“Frontera Delaware”)' but then the Cayman company became the parent company. Which company has seniority ? Clear as mud as always.
Find the strand hanson aim admission document from 2011 on web (I keep a local copy in my reference docs):
"Frontera Resources Corporation, a Cayman Islands exempted company (“Frontera Cayman”), is a newly
incorporated company that was established for the purpose of merging with, and into, Frontera Resources
Corporation, a Delaware corporation (“Frontera Delaware”).
As at the date of this document, Frontera Delaware is the parent company of the Group, which is involved
in independent oil and gas exploration, development and production. Upon the Merger becoming effective,
Frontera Cayman will become the parent company of the Group. Details of the corporate structure of the
Group as at Admission, following the Merger having become effective, are set out in Part VII of this
document."
"Frontera Delaware is, and following the Merger Frontera Cayman will be, a holding company that carries
out its activities through its subsidiaries. The Group’s interest in Block 12 is held through its wholly owned
subsidiary Frontera Resources Georgia Corporation (“Frontera Georgia”). Operations in Block 12 are
conducted through an operating company, Frontera Eastern Georgia Limited (the “Operating Company”),
which is jointly owned by Frontera Georgia and the Georgian state-owned national oil company, Georgian
Oil and Gas Corporation (“GOGC”). The Group has its principal offices in Houston, Texas, United States
and Tbilisi, Georgia. Core operations of the Group are currently in the country of Georgia, where the Group
has operated since 1997."
Welloiled there is more in the appendix - the "merger and recapitalisation" like that is how I expect them to do it in reverse if we leave Cayman.
Mole, do you know when FRC Cayman was incorporated? My reason for asking is that FRC Delaware was identified in the 2005 placing prospectus at the head of the group structure: FRC Delaware > FIC Cayman > FCC Cayman > FRGC Cayman > 50% Operating Company Georgia. I assume the assets and shares were transferred to FRC Cayman from FRC Delaware at some point after 2005 when FRC Cayman was incorporated but I haven't been able to find any RNS with the information. I do not know if FRC Delaware is active, as I mentioned in my previous post today, but what if it is?
Thanks ODR
If true that is a small relief. Much as I'm interested in Welloiled theory I don't think they can easily move the company like that without a redomicile of the company and that needs shareholder approval. Presumably either they have paid the fees or the strike off has been blocked for some technical reason or objection. Makes sense as to do so now makes no sense at all if you are still proceeding with litigation and have creditors left right and centre.
The bumpy off road excursion goes on.
Was this another act of brinksmanship, then ? Or is there a delay in reporting the striking off ? More confusion and uncertainty for all of us.
Apparently the four entities that were to be struck off in the Cayman's have not been.
I'm not going to be able to sign back on here today but wanted to share this massively reassuring news before I went.