Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
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I'm one of those who think that's optimistic. Personally, I think getting the issue away at 60p would be a good result. That would mean about 350m new shares to raise £210m. If the majority is raised through the firm placement, existing holders would be lucky to be offered as much as 1 for 1. Just a wild guess, I could be way out.
I think it would be better for existing holders if this was done via a rights issue, but that doesn't look like happening. It's difficult for the market to assess at the moment, not knowing the proportion of the company that will be dished out in the firm placement.
Hinkley. I have to agree with you. The share issue will be very interesting. I have no idea how it will play out. I am still optimistic as I still have shares. My best guess is a placement at 98p.
Some may say that's just pure wishful thinking but I will come back and admit I got it wrong, if it's a a discount to today's price. So long as others do the same.
Basically, I'd say it's determined by how much the investors are willing to pay.
i.e. what slice the company they want for their money.
i.e. what slice of the company they take off the ordinary investors.
Who sets the price for the 'placed' shares and the amount of shares to be issued
Guy Hands was doing a due diligence of KL. I doubt he knows anything about the wider Kier.
Share issue will be interesting.
Steve, I do not believe Guy has any interest in the Kier Group as whole. If you listen to the various interviews with him it does not fit with is portfolio at all. Also shares will be 'placed 'and only a % will be a part of the open offer.
@steve72
Nice to see a positive post. If GH having now seen the books, decides to pile in. That can only mean one thing, they’ve done their due diligence and like many others see a solid business, that once to debt issue has been resolved will prosper.
No one likes dilution, but what ever form the fund raising happens. Once complete there’s only one way this is going.
What happens if GH and his banking mates, having now seen the books, decide to pile in and buy the lions share of the placement, therefore technically taking control of the company, they have knowledge and can lead the conversation on the new shares price and the future direction
Problem is Uncle_Doug, this is not going to be a rights issue. It's going to be a placing with an open offer. At this stage there's no knowing how much of the fundraising will be through the open offer but potentially the lion's share could be in the placing, with token scraps dished out to PIs, just sufficient to claim they've meet pre-emption obligations. We'll see.
Perhaps underwriters got burnt in 2018 and they weren't willing to take on another rights issue. A rights issue would have been fairer for PIs.
Nobody seem bothered by the RCF facilty extension until 2025, SUBJECT to the lenders being happy with the equity raise, basically means to me if the equity raise is not well received, they will rein back on the RCF, the pyrimid of cards will fall
Finishing off the quoted sentence, I see they are doing this "by way of a Firm Placing and Placing and Open Offer." so as an existing holder I'm glad to see I will have the option to participate in the Open Offer.
TR < Opex - check
Revenue drop - check (well, COVID after all)
Debt increase - check
accelerating Net Loss for a second year - check
current assets < current liabilities - check (liquidity pressure)
Halving equity - check (well, it's still there at least)
pension troubles? - check
What else not to like?
I think the market is already ahead of you. By flagging the equity raise for the last 12 months the market is already pricing it in and you don't have to be great at maths to figure out what it will be, probably a 3 for 2 in the 60-70p range. If there was no raise needed this would be trading on a much higher valuation. The raise should fix the balance sheet concerns and the rights will eventually look good value as the business trades better over time, though still quite a long haul for lt.'s but worthwhile if tucking away for a few years
Can see myself buying in once price for a fundraise is known, start of a recovery imo, my only fear is that they might not be raising enough but its a start
No surprises - Equity raise to reduce debt and therefore interest payments, with already annualised cost savings of at least £115m... allowing remaining debt to be paid off quicker! SP will fall initially but will steadily rise.. Great management!! IMHO
Jeez - that's one helluva rights issue compared to its Mkt Cap. After Carillion and Interserve I wonder if they'll raise the cash. The sale of KL will offset the huge debt a bit but things looking very risky for KIE going forward.
Looks like I'll be sitting on the sidelines for a while until the storm is over. GLA
Compoundinterest-
It means significant dilution for existing shareholders.
Will see them through for a bit longer until the next time the piggy bank is empty then they will come for more or delist and change their name or something like IRV did.
"Proposed equity raise in the range of £190m to £240m, expected in the coming weeks" -
What does that mean for shareholders? I hope that does not mean wiping out shareholder value... since market cap is only around 150m... a debt for equity swap would significantly dilute this company estimating 60-80%...? Any analysis pls.