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So who decided to sell today? We have some funny investors for sure....Good volumes though
@AA - was there an investor call with the presentation?
@candlestick - the fund raise is out there only since two weeks. They published their earnings prior to this, without a presentation or call for investors or guidance other than their utilization rate which is not of much use for the average investor. And they come out and raise equity at steep discount (3p) to what was already discounted price (6 or 7p). The communication from the board/management at this company has been a failure, especially considering that the vice chairman is a cofounder of an investment bank. The discount to what is considered a fair value will not happen till they communicate properly
Bought my initial punt here last week and added second tranche today.....not expecting quick fix here, it's all about at least a year from now and hopefully the company will use the placing funds wisely to sort out theirs balance sheet and to resume growth.
GLA
This is unfortunately misguided.
Competent investors ask for and generally get the most up to date figures in order to make a decision.
[See other fundraisings]
When stand up companies raise capital, they provide true and fair views. ie up to date figures.
GMS have the Q1 figures to end March and could have used them. Unaudited, true but so where the final results.
It is the decision not to include the Q1 figures in the fundraising docs that is one of the more obvious problems.
The management's intentions and the lack of independent directors allows this.
Not sure why this a failing.
Makes sense to include only end of year numbers as they’re in the public domain. Are there more recent numbers already RNSd that they’ve ignored?
Similarly, the fund raise is out there. That’s why it can be referred to.
Interesting now
But they have used the calender end 2020 figures, not the current figures and added the fund raise details.
E class vessels were going for 9% more this year than last year and nearly all of that increased revenue drops to the bottom line.
This is a serious failure of governance, not to present up to date figures, especially when there has been such a significant turn around in the business.
Thanks, well spotted.
Anybody else spot the investor presentation uploaded today? (on capital raise section of website)
Idk the company at all though had alert set for bellow 3.05p and it got triggered today. Hence small lot of £250 taken as a punt and lets see where it goes after :)
It was Aberforth on behalf of the Wellcome Trust, a charity. They have ignored the investment merits, in favour of other considerations, shirking their fiduciary obligations.
The reporting schedule is.......not to report if its Seafox related parties. Saw Aberforth ditch their shares and report it. Never disclosed who bought on those big volume last week.
what's the point of the offer if the offer price is the same?
Strange price action, but small volumes.
Thinking of the big vol last week. What is the reporting schedule for significant holders ?
About to breach the 3p mark
I love the healthy debates here.....encouraging. The concern on the minorities being shafted is real - there is nothing to give us comfort that the board is acting in the interests of EVERYONE - each one of them is selected and appointed by Seafox, including the so called independent, and their allegiance lies with Seafox. And this is the biggest risk today, not operations.
@sirimcbonus - thanks for highlighting the points - fully agree
@AA2020 - ok with the capital raise, just not ok with the terms. Valuing it at 3p, when its trading at 7p, is just shafting the minority . This is a company they tried to buy some shares at 18p in 2019, and buy all at 10p in 2020, and bought a nice chunk at 22p only 12months ago. The amount raised is GBP 20m, and are we to believe that the board that negotiated an annual saving of $25m in interest cost can not raise new capital without giving new investors/underwriters a steep discount? Are we to believe that they could not convince institutional investors that the pre-money valuation is GBP 25m when things are looking bright? I would prefer for the VOTE to FAIL, warrants get issued, and EVERYONE gets diluted. OR push for liquidation and sell the assets - that would need special resolution which needs 75% vote (but correct me if I am wrong). I would also VOTE against re-electing the board - they have done a lousy job.
The timing of the issue - 9 june announcement, with date of record of 7 june - ensuring noone buys it to block the deal. And a 25 june general meeting to approve it when the capital raise closes on 23 june - that is some f**ed up timeline....isnt there regulation surrounding these? FCA sleeping at the wheel, as usual, till the boys from UAE rip off shareholders (remember NMC and Finablr?)
140m shares traded on 9 and 10 june combined - that is 40% of current shares in circulation - who are the new incoming shareholders? How did the board line up institutional investors to cover the open offer by 5PM on the 9th of June, the day it was announced?
BOTTOMLINE: SF wants maximum dilution so as to have fragmented ownership.The board is comprised of SF allies - in effect they control the company. I am scratching my head too as to why they haven't bought out the company if it was that great. Makes me extremely nervous. My thesis is that they wanted to make a bid at 10p, which would not have passed. 20p bid would have gotten approvals, but thats perhaps too much for SF - honestly it isn't. Will they make a new bid at 15p (7p post raise)? Time will tell. Will it get approved? Absolutely!
In my mind, what is done is done. The capital raise will obviously all go ahead. Looking forward, the big risk as I see it is SF and friends swoop in and bid for the company at a low ball price, like last time. Albeit this time, at somewhere between 5-7p. Even at 10p it would significantly undervalue the equity. I therefore have been scratching my head as to WHY the new Board are talking a big game around all the improvements and turn-around initiatives (cost cuts, higher vessel utilisatations, higher day rates, significant interest savings, etc.). I mean, that's all wonderful stuff, but it doesn't do them any favours IF the grand plan all along is to launch the next bid at a low ball price. Additionally, while they may get over 50% of the votes with any low ball bid, they would be a far cry from the 90% required for a squeeze out and de-listing.
Like the 2 previous bids at higher prices ?
You are catching on...
@ sirimcbbonus "and when they do, who is there to mop these up ? Seafox of course."
Seafox can't mop any more up - they are already at 29.99% without triggering a bid.
@ sirimcbbonus - agree with all the points re: corporate gov issues.
Re: the "unnecessarily low price" - it had to be at a discount to prevailing share price. And given the microcap nature and other uncertainty around the company, I suspect it required a heavy discount in order to get it done. Could it have gotten through at 4 or 5p instead? Probably.
What I dont like about the raise is
1/ The lack of notice on the terms of the raise.
2/ The lack of clear up to date guidance ...where are the Q1 figures ?
3/ The unnecessarily low price. How do I know it is unnecessarily depressed ? Seafox bought more shares last year and this at a prices well above the current sp. and in the teeth of the oil price collapse , tried to bid for GMS ie. they found the company attractive even last year. Subsequently, we know the vessels are in higher demand and earning more, so why the lower price for the offer shares.
I have subscribed in full and applied for excess, but the board's actions have been designed to worry and rush shareholders, who will therefore be less inclined to subscribe for their shares...and when they do, who is there to mop these up ?
Seafox of course.
A failure of corporate governance, but I see end 2022 net debt $280m and a $100m op profit supporting a share price of around 21p [x5 operating profits] and the banks waiving the obligation to raise the $50m, due to cash generation.
If x 6 valuation 28p...gearing works both ways!
And if shareholders vote against the capital raise and the capital raise therefore does not succeed, warrants are issued and/or the company is back to square one with the banks. It's clear they need to get a capital raise done. What exactly do you dislike? The idea of the capital raise or the terms on which it is being offered?
@sean Yes, not sure how many agree with our view. Also not sure if SF and friends have 50% of the votes since I dont see Horizon subscribing to the issue, although this could be to make it look like they are not acting in concert.
Sean Trading in UK and happy to wait for a while. It would be wrong to specify here as I wouldn’t want to be accused of a cross ramp nut rainbow is indeed one of 4 I’ve taken a position in.
@4 Corners I would voting against the capital raise , but think ing it gets 44% agreed, chance of against succeed is really small, you don't expect all of 55% shareholders interpret the situation as same as you and me.