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My comments on fishbones assertions.
1...Confusion over shareholdings and consequences...
This will have negligible consequences for financial performance because all such discussions / confusion/regulatory attention etc. all take place in the 'cloud' far away from the ground where all business transactions and performance take place..
I would further assert that this wrangling at a sharehder level is a 'perverse benefit' to the current board and senior management , now that the culprits and their footsoldiers have been removed...my experience as an FD is that you run a successful business in spite of sharehders interference rather than because of it , so let them fight it out amongst themselves , and allow directors and senior management to run the business themselves , which based on the previous 5 years accounts, they have been doing very well..
2...Work seemingly over valued....this is a possibility and is born out by the seemingly high debtors figure which equates to 90 days worth of sales, which it has to be said are quite high, they are, however, not unusual for the Gulf States where there tends to be a cultural norm of late payment of invoices..
3...Inflated assets and cash balances...assets values and cash balances are inversely related...if you have paid more for your assets than you should have , then you will have less cash left over..so how can cash be overstated , .besides cash varies on a daily basis by as much as $1 million so you can't assert anything whatsoever from the levels of cash reported .
4...Zero corporate governance ...repeat of point 1
5...FCA intervention ...repeat of point 1
6...Frantic selling/margin calls... This has everything to do with banks selling shares held as collateral to repay personal debts of the removed directors ..this is normal business practice...as soon as a bank thinks it is in danger of not having its loans repaid , it will sell all collateralised assets to reduce the bank's potential loss ..if they get less for these collateralised assets, than the outstanding balance on the loan then they will simply chase Shetty et Al for the reduced remainder of the loan ..which is what is happening ; hence, the current arguments over share ownership to meet their own personal debts.. I don't think it has anything to do with control of the business..
My concern remains over the amount of corporate debts and their ability to refinance/ roll over their existing loans and enter into new ones to fund future growth...this is where the current shenanigans might have an effect...
The final point which Banana didn't mention was M.W's assertion that it wasn't declaring ALL balance sheet debt ...this refers to lease liabilities which are classified as debt ..this isn't really debt as such because it is matched off against 'right of use assets' shown under fixed assets....IFRS requirements now require both the cumulative cost of renting these assets which are the lease liabilities, with an equiva
Very good post adzy.
That's exactly why I'm invested here. Retail shorts are fixated on sell side. Ignoring the institutional buys; damn good iis, not punters. They've seen the value.
This was destined to go sub 500, but ii buys have kept it up. Follow the money!
Kabaa - it says in the most recent RNS:
“ Ordinary Shares have subsequently been sold by UAB as enforcement of security”
Enforcement of security is a margin call.
Again, this could be true, but the story we’ve been told is that the insiders sold because of margin calls given they were greedy and levered to the tilt... so it was forced liquidation rather than voluntary... capital group, one of the largest and most sophisticated money managers would/should have done their due diligence before taking those shares up... ofcourse they could just be lying to us and the real reason could be that they are just dying to get out because they just realised their fraud has been exposed by MW... both options can be true right now.
I do draw some comfort that Bellevue, clermont and Wellington (all dedicated health care specialists) have a sizeable stake in here.
I would just say aswell that related third party transactions are not that uncommon in emerging markets. Depends on the extent these have been inflated.
Adzky Do you have any evidence that it was a margin call?
Add the £375m share sale done last month at a massive discount at the time.
By several directors and the biggest shareholders.
That is frantic and not a good sign of things to come.
Especially when there is hugely delayed reporting of it, mixed in with plastic takeover talks.
Telegraph article sheds more light on related party transactions inside nmc (purchasing from companies who shetty owns etc)
I'd say there's a reason they were so eager to get out despite the market dropping 70-80% very quickly and it's probably because the shares are worth much much less than what they sold them for. I.e. 0 or close to....
To be 100% accurate though, it was the banks “frantically” selling shetty/butti’s shares to meet margin calls (with or without his knowledge)
I’d say as it was rocketing downwards and Shetty sold c£70m+ shares at discount I’d say that was fairly frantic and not made up? (See my use of a question mark there?
Agree that the smart shorts made hay, but you think 8.5 is rock bottom, not by a long shot?
(who does not know how much of the business he owns oh and has been frantically selling what he does?)
Why do you use that word 'frantically'? Where did that come from? You're not, by any chance, just making it up, are you?
The trouble is, when I read something like that, it makes me want to disregard the rest.
But then, what we are all meant to be doing on these boards anyway is putting a question mark on what anyone says, on principle!
LM
Yeah ok smart guy. The smart short was at £25. Not near 800p.
I’m I loving the optimism on the board. You would think Nmc was a gem of a company - results coming, £16 a share, yadder yadder - so its own senior shareholders don’t know how many shares they have, work seemingly overvalued, inflated assets, zero corporate governance, an FCA enquiry along with one paid for by the ex major shareholder (who does not know how much of the business he owns oh and has been frantically selling what he does?) - this is a FTSE 100 company (sorry was) that is in a dire state at present. If, and that’s a big if, someone buys it, it will be at rock bottom. Sorry if I’m deramping, and yes I’m short now, but seriously it is a crock of ****