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A MILA after hours RNS this evening: they are negotiating some "extremely exciting opportunities" to RTO!
And they have been pursuing a new strategy, looking beyond the resources sector: this will almost certainly include the tech sector!!
31/10/2019 17:00 UKREG Mila Resources PLC Final Results
" ... Highlights
-- Ongoing appraisal of investment targets in regions with strong valuation or cash-flow growth potential
-- Mutually terminated a proposed reverse takeover of Capital Metals Limited
-- Broadening of investment horizons
-- Strong balance sheet position with cash balance at the end of the period
Chairman's Statement
Dear Shareholder
We have pleasure in presenting the financial statements for the year ended 30 June 2019.
Following Mila's re-listing and broadening of its horizons we remain open minded about which industries we might invest in while retaining our key criteria for delivering excellent value for our shareholders. The mutually terminated proposed reverse takeover of Capital Metals Limited, while disappointing, has driven our new strategy which we hope will lead to a swift replacement. The reduction of investment routes for smaller businesses following the continued uncertainty over Brexit has driven some extremely exciting opportunities towards Mila. Negotiations are already well underway on these projects and we hope that at least one of these opportunities can be Mila's first acquisition.
We formed the Company to undertake an acquisition of a controlling interest in a company or business (an "Acquisition"). Any Acquisition is expected to constitute a reverse takeover transaction and consideration for the Acquisition may be in part or in whole in the form of share-based consideration or funded from the Company's existing cash resources or the raising of additional funds.
I look forward to reporting our progress to you over the next period. ... "
https://uk.advfn.com/stock-market/london/mila-resources-MILA/share-news/Mila-Resources-PLC-Final-Results/81040036
It was a change of investment strategy to focus on technology that triggered YOLO's quadrupling this month to about 10p:
2nd Oct 2019 7:00 am RNS Placing and Investment Strategy
" ... Investment Strategy
The board of directors has conducted a review of the Company's investment strategy. One outcome of that review is that the board has decided that, in the light of the current market conditions and pipeline opportunities, within the scope of its current investment strategy it should give particular focus to technology opportunities in the fields of big data, machine learning, telematics and the internet of things (IoT). ..."
https://www.lse.co.uk/rns/YOLO/placing-and-investment-strategy-isux13td1iyxled.html
Similarly, it was MMO's switch to technology that triggered its rapid multibagging :
tomboyb 9 Feb '16 - 08:23 - 619 of 627
"In case anyone has missed it - MMO moving to fintech area"
https://uk.advfn.com/cmn/fbb/thread.php3?id=33556304&from=605
Within a year MMO had more than 20-bagged.
I would prefer a situation like MILA, where the shell is spending more to arrange an RTO, than a shell like AUCT which seems to be just sitting on its cash, and nothing seems to be happening.
This following phrase from Thursday's RNS suggests that we could well get something by the end of the current half year, i.e. by 31st. December 2019:
" ... I look forward to reporting our progress to you over the next period. ... "
They've been seriously working on this since the last potential RTO was aborted in March, so as we're now in November enough time has elapsed for something to be announced imminently.
Here are some other key phrases from Thursday's RNS:
• "extremely exciting opportunities"
• "at least one of these opportunities"
• "a swift replacement"
The phrase "extremely exciting opportunities" is clearly very bullish, especially from a company that is not known for its hyperbole.
The phrase "at least one of these opportunities" means that multiple acquisitions are potentially on the cards, and also increases the chances that there will at least be something.
And the phrase "a swift replacement" indicates that we shouldn't have to wait long.
A non-resource and domestic RTO should be relatively quicker, cheaper, and simpler to arrange.
Whereas foreign acquisitions obviously increase costs, and resource acquisitions tend to have more complicated due diligence, and risk of abortion.
In addition, two other potential barriers to an RTO don't apply in MILA's case:-
• It's a 'new', 'clean' shell, as opposed to a 'dirty' shell that previously housed another business, which can have left some toxic baggage.
• It's very lowly-valued, including re. cash, so there is no problem of shell overvaluation putting off interested parties.
"The reduction of investment routes for smaller businesses following the continued uncertainty over Brexit has driven some extremely exciting opportunities towards Mila."
That phrase from Thursday's RNS highlights a paradox of shells.
A period of stockmarket jitters can effectively close down the IPO route for many companies for a while, effectively increasing the opportunities for a good shell ... and that shell's potential valuation.
It sounds like that is happening here, and that there could well be competing businesses vying for MILA's attentions.
Such competition would mean that MILA could take the pick (or picks) of the bunch, and also negotiate a better deal.
I would think-hope that an RTO here would be priced in the 3p to 4p range, and it could potentially be more in the right circumstances.
And of course after the RTO the expanded company will in effect be like a new issue, and as with any good new issue could itself do extremely well going forward ... including a potential big initial premium to the issue price.
The "extremely exciting opportunities" to RTO that are being negotiated means that there could be a lot of upside here.
Here are two tech stocks that were extremely exciting opportunities (both became thousand-baggers):
1. In hardware: "Intel went public in 1971 with an IPO value of only $8 million".
https://blog.themistrading.com/2011/10/david-weild-how-to-revive-small-cap-ipos/
At its peak market capitalisation, in 2000, its market cap. was about $500 billion.
2. In software: Microsoft went public in 1986 with a market capitalisation of about $500 million. At its peak share price near the turn of the following decade, its market cap. was well over $500 billion.
Crazy when you think a hundred bag here would "only" be £54m mcap
More buys than sells gotta start making it difficult to buy again
So, are we all planning on taking up our open offer?
What do you mean?
If you read the agm list of resolutions, it includes authorisation to raise *only* by way of a rights issue /open offer £500k
It's extremely encouraging to see them only want to raise this way.
Still no Rns yet. Should have one today.
Didn’t know an open offer was announced? What are the terms
Sorry, to avoid confusion, they haven't announced it. But seeing as I'd say it's virtually guaranteed all resolutions will pass there will be a rights issue very soon I'd imagine, as they will need it (potentially) for an rto. Just waiting them to rns the agm results. Probably Friday.
Well if they give some idea of the target, perversely the price might go up after a possible rights issue. I doubt a director would buy £10K worth if excellent news was not imminent!
I'd say the price should go up, but not because of azn indication of the company. This company would then have the best part of £900k to rto. They don't need that much, which (Imo) would imply a much bigger rto is the target.
Bear in mind for a normal company you'd think yeah they'll just flip it for fees. But here the free float is so small very few people will flip
Also, if they do give any indication of the deal then this would be massively over subscribed
I read it as a cap of 50 million shares. They say nominal value of 500k and nominal value of the shares is 1p. So they either raise up to 500k at 1p or perhaps up to a million at 2p and so on.
If there is going to be a rights issue in Jan, as I suspect, people really should be buying in now to maximise their potential offering on the issue. Plus to get in before the cut off date.
How has one normally got to take up the rights? Surprised no mention of AGM resolutions passed
How long I meant to take up rights
From experience of other shares it's normally around 3 weeks to a month I believe.
Thx for reply.Surprised no mention of passing of resolutions at AGM
Madhatter:
If there is a rights issue/open offer are they likely to suspend the shares immediately on announcement? Last time they announced an RTO they were suspended more than 6 months
No, I've yet to see a share that suspends on an rights/open offer
That’s my opinion too.