The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
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There will have been some serious number crunching and they already increased the amount borrowed. The key to the finance package was the injection of cash via equity earlier in the year and the farmin by BH.
So I doubt they could borrow much more without having to put more in especially if it's just to repay effectively what they would now see as equity more than debt. It's not putting anything into the asset and Lcf\log are now unsecured.
It's tough having to endure LOG being gradually swapped out here but it is what it is. What will be interesting to see is where the shares start to go. It's not PI buying these shares.
The conversion RNS stated:
'As the completion date is in the future, the following numbers are provided as guidance. Given LOG's existing holding of 20,497,204 Ordinary Shares in IOG, it is expected that £9.4 million of the February 2016 Loan will be converted into 116,964,275 Ordinary Shares, with the remaining £1.4 million to be exchanged into the Series A Loan Notes, expected to be convertible into 17,700,000 Ordinary Shares.
Following Admission of these February 2016 Loan conversion shares at Farm-out completion, there would then be 458,297,205 Ordinary Shares in issue.'
Expected shares as above 458,297,205
Additional £1.4m converted 17,700,000
Adjusted potential new ordinary shares 475,997,205
Log shareholding today 8,097,204 (TR1)
8p loans converted 116,964,275 (see above)
Balance of 8p loans converted 17,700,000 (see above)
Log potential new shareholding 142,761,479
This new potential shareholding is 29.99% (142,761,479/475,997,205) of the potential new ordinary shares.
Maybe LOG offloaded so they can then fully convert the 8p convertible loans and not exceed a holding of 29.99%?
RNS the other day confirmed they held 20m shares before the latest conversion. They have disposed of 12m of those leaving 8m plus the large number they will be getting shortly once the notes are converted taking them back towards a 30% holding. So a good start but plenty to go yet and not surprising they are having to sell at a discount in volume.
This is not part of the orderly disposal of the notes. We need a willing counter party or two to mop up the shares and it looks like the institutions must be doing that so far.
A Position before 6.005%
B Position after 2.372%
C Movement 3.633%
D Shares in issue 341,332,750
C multiplied by D equals 12,400,619
So it looks like the one transaction of 17p today equates for the change disclosed in the TR1. Where have all the other sells (or buys) been coming from?