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"What has the cost of borrowing got to do with the charges for arranging a placing? "
Well if you want £10m and you don't want a placing..then ..you either go and get a loan or maybe issue bonds ...
but..of course you need to compare the costs of doing each.....whatever you do..it is going to cost you ..
Avyererdowt
hi..with respect..you cant "measure" things like that just on the share price change over a couple of days....
right now..all you need to do..is decide whether the money being raised is going to be productive and bring share price enhancement on the 30p paid for them....in 6-12 months it might be 45p ..a 50% return
The money in all fairness is going to give the finances needed for companies to come and do business...it says..ok..these guys aren't going to go bankrupt tomorrow...they have working capital to use... without proper working capital they haven't got a chance ...it is like investing in tools for a carpenter..without them he is useless no matter what skills he might have
without the working capital...it is hopeless.... you need working capital to spend on a contract before any revenue comes in....and Saipem are not going to give more contracts without a better working capital set up... more contracts are "currently in advanced negotiations.".....dependent on what do you think ??
Dilution.... well..you might right now own ...say 20,000 shares ...0.024% of the company....dilution would bring that to just over 0.0125% .... our crumb is a bit smaller...BUT ..it would be a smaller crumb in a bigger,stronger company......which actually would turn out quite probably much better than a bigger crumb in a weaker, poorer company.
Depends how you see it all ..but you certainly cannot judge anything on a 2 day share price change
IMO
Pokerchips,
What has the cost of borrowing got to do with the charges for arranging a placing?
The government announced back in November 2020 that it would be giving funding of 160M to ports involved in wind farm development , any one know if this is for the owner /operator of the ports or does that include the companies that are actually doing the work for the windfarms
That's wrong though. They haven't "failed". What they did instead was generate maiden revenues and create a pipeline of billions of potential contract work. We all thought the ML was weeks away, then covid happened. So it's not just the BOD that were incorrect, unsuspecting things happened.
Who cares what German yards and the EU are doing? We have 2 of the 4 biggest docks of any shipyard in the EU. If you sell at a loss that's on you. You seem to have a number of misunderstandings about the business.
To answer two questions.
1) £700K is par for the course. Rightly or wrongly but Investment Banking is a very expensive business to run. London rules the waves and long may it continue.
2) Why would I be looking at July as my time frame. By then, we should know the outcome of the LOI which, if successful, would be transformative. If it does not happen, it would imply H and W may never be a commercial shipbuilder again, especially as German yards are calling on the EU to aid yards suffering against the highly government backed builders in the Far East. Additionally, if the ML is not agreed by then, in my opinion, it never will.
The main reason to invest was a belief that the BOD were competent. Having stated several times that the ML was only weeks away, they have by their incorrect appraisal, drained my confidence.
Yes, they have used shareholders money to buy bankrupt businesses, something a four year old could do. To justify £1m payouts, turning those worthless assets into going concerns is the real test. As yet, they have, maybe due to covid, failed. The Saipem order was already negotiated with the previous owners so not a new contract. They still have not delivered one decent contract.
So by July, I will have my answer. Either I will be selling at 12p or happy at £1....
I think a lot saw the raise coming; but not at 30p. The mid-high 30's most of us could have swallowed so this is a real disappointment that speaks more to the lack of conviction of investors despite the recent Saipem award.
The relationship with the City has to be improved the Chairman must be replaced imho with someone who has "financial operational" experience with the banks and the investors. There is little doubt about the pipeline of opportunities and to be fair to the company they have steadily increased the size of the average contracts but they are running short on the clock.
I can see other companies might consider modifying their supply chains by acquiring us whilst we struggle to grow such that they control the yard(s) for their own construction schedules and retain the margins which are likely to increase as yard capacity begins to tighten. Someone earlier mentioned 70p = £70 million - I think most shareholders would accept that offer if it came in the next few months. Its not such a large outlay for the likes of BAe but also when you look at the investment being made in wind and WDV alone it runs into the billions so why would you not want to take control over the fabrication and construction of your own projects at a fairly low outlay. Also it gives you the option to pick up the other opportunities in the sectors the Board have outlined. I will wait as I think that this lot will eventually deliver ..... or if they don't someone will step in to acquire what is a strategically valuable group of assets. And thats not including the storage project which if consented will be the biggest asset by a country mile. GLA
" the £700k costs "
how much do you think it costs to borrow £10 million for say 3 or 5 years ?
Lottie why would you not invest for longer? I have bad news for you, 18 months really isn't a long time to hold a share and watch a company develop itself. Whenever I invest in something I consider whether the company will be more profitable in 5 years than it is today, and the answer for INFA is a resounding yes. We have gone from a company trying to build a salt cavern to making maiden revenues after some very significant acquisitions of 4 marine engineering factories, tendering for contracts, planning to be a big part of the Brexit shipbuilding surge.
How anyone can be unimpressed with this is beyond me.
Lottie123,
Thank you for your insight into the complexity and cost of a rights issue.
Can you comment on the £700k costs incurred in arranging the latest placing?
I completely understand your argument for a fully fledged Rights Issue to raise the extra cash. Having been a jobber on the old Stock Exchange floor during many such issues, I can tell you they are a very complex and expensive operation. Yes, it would protect existing shareholders from dilution as they could either participate or, in the event of the shares trading at a premium to the Rights offering, sell the Rights. The shares would need to be traded, for a short period, in Cum and Ex format as well as the underlying shares. Believe me, it is awkward and costly for the company (INFA)
Once again, I agree with your frustration but this is really the only way. If you went for a deep discounted placing issue, solely for existing shareholders, the chances are it would immediately trade below that price and many would be scared off taking up the offer. This would then require a subsequent placing, invariably at a discount to the original price.
Let's all grin and bear it one more time. If nothing is forthcoming by July, my 18 month journey will come to an end, probably in loss but that is the risk we take.
On the mark once again PJT!
Poker you missed the point- I am not complaining about the fundraise I am complaining about the dilution.
Tango, I am not convinced on that- HL for example is partly retail
" Unfortunately the impact of dilutive placings like this is to expropriate (steal)that growth from ordinary shareholders with favoured shareholders and Directors allowed to buy in to that growth at a discount"
buy NOW ..in the market at 30p !!!
what on earth are you investing in a company for growth ...and then complaining because they raise money ...for...growth !!!!
Tango1, exactly! The only thing that thread will achieve is to cause further harm to the SP potentially. I would be angry if I'd been burnt but it's a risk that always comes with AIM. I was one of those who got burnt in the Avacta placing leak. THAT really stung but if I look at their SP now in relation to the £1.20 then........ Anger is not going to help anyone - PI's especially - and you are better sleeping on any decision.
Sanderling, if you look at the voting power of the II's it would not make a difference which way PI's voted DYOR.
PJT, My agenda is simply not to be continually forcibly diluted!!
Agreed PJT, anyone who has been holding as long as we have would be mad to sell out (at a loss, I might add) when things are starting to get good
Morgz, the funding will be done if we vote no- just in a more equitable way
Okay, I know I fed the thread :-) My bad!
Sanderling, I must confess that I am always very suspicious of "holders" who create an account in order to post a negative comment at an "opportunistic" moment. Why would anyone who professes to have spent six months building up a holding suddenly choose to post such a provocative header especially? I believe I already know the answer or = more importantly - your agenda. I would suggest that others here do not feed the thread.
Absolutely do not vote against. Whatever your opinion on the dilution, if you are invested why would look to actively harm the future growth prospects of the company? There is no way forward without the funding, you may as well just sell your shares if you are going to vote against.
Good Morning All, This is my first post here- I am a relatively new investor and have built up a decent holding over the past 6 months. The growth outlook for INFA is very positive in my opinion underlined by the Saipem contract and I am sure many more decent contracts to come in cruise/windfarm and defense. In addition the IM ML will hopefully come through soon
Unfortunately the impact of dilutive placings like this is to expropriate (steal)that growth from ordinary shareholders with favoured shareholders and Directors allowed to buy in to that growth at a discount. If this goes through, ordinary shareholders will never realise that future growth- it will be diluted away.... Clearly more funds will be required going forward with more dilution
Voting No here will result in a short term wobble in the price but the demand is clearly there and all shareholders should have pre emption rights ( ie not to be forcibly diluted),
This fund raise should be done as an underwritten rights issue in order to preserve value for all shareholders and imo, investors should vote against!!
with AIM ... ..The financing of the company is more important to keep an eye on than the initial chase for revenues.....