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I agree with Kenj, so we should:
1- Accept the dilution as a done deal. 2- Fight any issue of shares for any reason whatsoever in the next four years no matter how small(Including LTIP). 3 - Vote against everything, all the time . 4 - Push for a share buy-back (But not cancellation). 5 - Be visable and vocal.
KRSS, Yes, let’s do some maths!
Just how much do you calculate the Convertible Bonds would fetch, if offered for sale?
Each $200k bond can be converted to shares at $0.135 per share.
That would equal 1.48m shares for the $200m bond.
1.48m shares at today's price of 24p = £355,200.
So each $200,000 bond if exchanged for shares is worth around £355,200.
And that is at today's sp. If the sp doubles the CB value rises to $710,400.
And they also carry a guaranteed 8.25% PA interest until Jul 2024.
As I said in an earlier post any CB holder prepared to sell these bonds would have to be criminally insane.
I have asked this more than once; please explain exactly how POG might buy back these Convertible Bonds???
Kenj, Let’s do some maths, figures speak louder than words and can give clear picture. UGC owns 22.37% shares, Rest is convertible bonds, take their interest to 28.73%. UGG can maximum own 29.90% as per rules. So , I doubt POG can buyback even 100m shares, otherwise major shareholders stake will cross 30% and will become owner. So best likely scenario can be POG will buy bonds and then buyback shares. If we can do more number crunching, we can figure out, how many % exactly POG can buy back shares , so that major shareholders percentage doesn’t increase above 30%
"Buyback shares , but before that possibly convertible bonds will be purchased IMO."
KRSS,
I searched the internet to find where these bonds were being traded, and at what price. I found nothing at all for POG, for their CB's or the ordinary bonds. It is possible that I have looked in the wrong places, or used the wrong search terms, but I had previously had no difficulty finding details of the earlier bond issues.
Have I missed something, or is there no market for these bonds because none have ever been offered for sale??
It’s almost half year end, Q1 production was slight up in proportion, so if they produced 350k ounces and achieve $1600 sale price. As Pavel said and makes sense, it will be all step by step, 1) dividends 2) Buyback shares , but before that possibly convertible bonds will be purchased IMO.
UDF If you are right about the bond holders benefiting from dividend payments - I take it you mean through title to the bonds rather than any shares they may own separately. If this is the case then it is very unusual. If it is the case then I would not support dividend payments. I do not support the further dilution of another rights issue, with gold at $1700 POG should be able to generate cash to meet ongoing capital and operating costs (including Temi and the purchase of refractory ore) now that the POX hub is complete. From a small shareholders perspective the best we could hope for would be share buy backs, held in treasury for the bondholders when they convert in 2024 as you suggest below.
IMO, all major shareholders will push for dividends, but there is fine balance to capital growth, If POG decides to pay Divi’s , that will be around 1p from 2019 profit. If POG decides to pay £33m dividends, our major shareholder will be happy to receive around £10m. Second option is to buyback shares, technically IMO, POG can only buycak 100m shares, which they buyback between 25p to 40, almost similar amount if they pay Dividends. But, buying back shares will turbo the SP.If I am not wrong, they need to pay Convertible bonds, if they want to buyback 500m or more shares and cancel them.
Yes, I would also support a Rights issue,.....I would reinvest, all dividends.
BW
II think all the major shareholders where bribed with these bonds, so they didn’t object. Zero risk. The only people who lost out where the smaller shareholders. BOD should really go to prison for this, because you shouldn’t be able prejudice one class of shareholders. They are effectively shareholders who earn interest and get dividends and have final say on the actions of the company.
The effective rate of interest on these 2024 bonds is currently at this moment 264%
After Temi and some reduction in debt the best value outcome for shareholders is a share buyback and retain (not cancel) the shares for servicing the 2024 bondholders. This is less costly then a divi for the same amount as the divi is diluted to 2024 bondholders.
If the company pays a dividend the 2024 bondholders get their share of the dividend as well. It seems they have preferential terms to ordinary shareholders. Worst deal ever done by a company in history. They should stop bragging about its IMO.
I'd take the dividends. If Gold and the share price are still good the 2024 brigade will convert. As you have previously said there is no way we can be rid of them before then. If Gold and the share price are good the 2022 bonds can be rolled over at a more advantageous rate.
I might take the Scrip option if it was available, or even settle for a scrip only dividend option - as a way of rebalancing things, as you put it.
We agree, Kenj
this is probably the only way as things stand
We won't have a mountain of cash that will allow us to do both
"dividends might rebalance the interests of shareholders in relation to bondholders"
Quite the reverse Whosnext,
Paying dividends will mean that we have less money to repay the bondholders. What is needed is to get the bondholders off our back, and that can only be done by paying off these loans. The names of the bondholders have not been stated, but I would not be surprised to find some of our major shareholders also holding these bonds. A Rights Issue could help to rebalance things, but I doubt that will happen.
Rusty,
Clear !
It's as simple as that
I dare add c) to buy more refractory ore "we" will need and increase production
That the price of POG goes from 24p to 25.5p and this could be equivalent to 10 years of dividends; also the stakes are not there ... except perhaps that dividends might rebalance the interests of shareholders in relation to bondholders
Share buy back is only any use if you have plenty spare cash. We need to keep as much cash as possible to a, buy Temi in cash, and b, start accumulating to repay at least some of the bonds maturing in 2022, If we can PROVE, we are making good profits then any further bond issue should be art lower rates, unless of course they look at other ways of refinancing this, such as rights issue. I also do not think its a frugal policy to even think of dividends YET. My opinion only.
IMO, based on an ave price of gold at $1700 and a production split of 280k Third party and 450k own material, the price should be around 65p at YE 2020.
Each day that goes by completes more of this company’s turnaround and makes them more financially stable.
One further point, they are requesting questions at the POG website for the AGM. What’s in the best interest of the shareholders is a share buyback and stash for 2024. Perhaps a few of us could write in and ask this as question for the AGM.
Who thinks 50p or higher by year end? H1 profits will determine this.
It said they would discuss dividend policy. Clearly this is an indication of profits for the first half of 2020. Personally I would prefer the money to be banked to cover debts as they mature but that’s just me. If they do pay a dividend then I will reinvest it.
To see the strength of this stock in the future you need look no further than POLY down 5.48% today, CEY down 6.15% today and POG down only 2.23% today.
We are seeing higher lows and rebounds back to 26-27p. Past few days have been driven by algorithms. Personally I added near 80,000 shares over the past two weeks. Courts purchase at a touch over 23p and 25.12p. The way I see it this will continue to re rate upwards for the next year or two. Big items that will drive this include gold price, IRC sale, dividends, buybacks and debt reduction.
Only concern is board is starting to look heavy, how much are they paying themselves and why does it need so many of them when it didn’t before.
Are they talking about dividends? RNS
Mr L, after that crude comment maybe, just maybe, your dreams may come true today. Fingers crossed dude.