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Let’s assume that Polo fails to find a new Nomad and is delisted from Aim. We then become shareholders of an unlisted, privately held company. The shareholdings are illiquid, but have NAV well in excess of the current share price. We might in due course be bought out by the majority shareholder; or it might be possible to dispose of the shares through auction, eg Asset Match. I see my (increasingly) modest shareholding a bit like Premium Bonds: essentially dead money but who knows there could be a tiny jackpot one day. (I hold just 100,000 shares, so whatever happens I’m not going to lose any sleep. My paper losses are water under the bridge.)
I agree with the NAV being about 9p. A penny looks mad. But if this does delist you may well see nothing. The cost of Tang and other costs is obscene in my view.
Just had a look at the NAV as of 31st March interims 'Net Asset Value per share as at 20 March 2020 was approximately 7.94 pence per share (31 December 2019: 13.18 pence per share)' suspect it would be higher now as oil was trading appx 40-50% lower then and March was showing the biggest falls pretty much across the board so all assetts would have been affected
So looking on Phronimos website (if you can call it that) see correspondence below which at the time they thought we could get 10-12p per shareholder , see the doc for full details, so they too have seen significant value here way over the share price.
'Extract below'
Return capital to shareholders via a tender offer at 12p per share
The persistently large discount of Polo’s stock price to net asset value precludes shareholders from
realizing anything remotely close to its fair value through open-market transactions. Consequently,
we believe the next logical step to protect and unlock shareholder value entails a tender offer at
12p per share. Funds for the return of capital can be sourced from a complete or partial divestment
of Polo’s successful investment in publicly listed Hibiscus Petroleum, which is currently worth
roughly two times Polo’s market value. For instance, the sale of a mere one-third of Polo’s stake in
Hibiscus at current prices would allow the company to repurchase 20% of the shares outstanding at
12p—a price that should be accretive to NAV (currently 15.5p) while simultaneously rewarding
shareholders with a buyback at a roughly 200% premium to Polo’s current stock price. We believe
there will be broad shareholder support for a significant voluntary cash tender offer or buyback.
Should the significant gap between market price and NAV persist, additional capital should be
returned to shareholders in the near term via buybacks, tenders offers, or in-specie distributions of
Hibiscus shares.
https://docs.google.com/a/phronimoscap.com/viewer?a=v&pid=sites&srcid=cGhyb25pbW9zY2FwLmNvbXx0M3N0aW4xfGd4OmQ0Yjk3MTNkMjA3MzU4ZQ
I suspect Tang pulled the plug on the January AGM when it became apparent he didn't have enough votes to remain chairman. To reconvene the AGM, he must believe that he now has enough votes to swing resolution 3 in his favour and remain chairman.
Maybe I've misunderstood, but the holding of Perfectus (owned by Polo (all shareholders) but controlled by Tang) gives Tang 10.37% voting rights paid for by us. "Perfectus is 98% owned by Polo Investments Limited, a wholly owned subsidiary of Polo, and 2% by Mettiz Capital Limited, a company controlled by the Chairman. Perfectus holds 10.37% of the issued share capital of the Company." Something doesn't feel right about that.
The acquisition of GCM shares in February looks like a knee jerk reaction by a man thinking he might be losing control. A poison pill. Moving value from something he might lose control of (Polo) to something more secure (GCM)?
I don't recall Phronimos making an offer to buy the company. I think they were pushing for a return of capital funded by a Hibiscus sale.
Ah, so that's why this board is quiet, there is more discussion on the GCM board about Polo than here :-)
Personally, for the West, I see the post covid revival being about Green initiatives and the green economy, EV's, Solar, Wind, etc. However, for Countries such as Bangladesh, it's got to be about what's cheapest, and sitting on a pile of coal, even if the price is going up, has got to be the cheapest, more securest way to go to secure their power needs over the next 10/20 years
I'm very tempted to top up (average down) at these prices, I will look at Polo's other investments, (if there are any still trading, I see a couple have gone pop) and maybe wait for the Nomad to be announced. Buying before the Nomad announcement reminds me of when I bought Woolworths all those years ago (I was a bit greener then) .. how can Woolworths go bust, but it did. A tad more caution this time, lets get the Nomad announced then I'll top up.
Well this board seems to have started coming back to life, Good to see differing opinions and thought processes and even the ccassional research. I hadn't just started buying Polo shares I have been in and out of them for years, there are some good potential assetts in here, not just GCM, at my current average i will be very surprised if I don't make money on my Polo holdings, course I could lose it all, it's AIM, well actually that can happen anywhere, My main interest here is GCM and if I didn't believe the odds were in favour of getting approval or bought out I would sell up. How will I make money on my Polo purchases ... when my Polo shares reach their target prices I will sell them. ....It's while back but weren't Phronimos offering a buy out of Polo at a good mark up which caused all the AGM furore about who could vote, isn't that the vote that is taking place at this reconvened meeting? It's a while back and I am open to being re-educated/updated.
Even if GCM comes good, how are you going to realise this value through your Polo shares? Tang can keep milking his £2M/year and never pay a Polo dividend (why would he?). If the shares are delisted you won't be able to sell to make a capital gain either. Maybe this is his plan.
If it is, then I can't see any right-minded investors financially backing GCM with this guy pulling the strings. If he screws us over why not GCM investors as well.
I saw the initial drop and post on here and put a buy in at what I thought was silly money, I was very surprised when it got taken, 1.15 got to be the lowest ever, and the value volume was paltry in the scheme f thingsI don't doubt there will be a new nomad, and though I don't entirely disagree about Tang tenure I do think his interests are aligned with mine, he, and his friends have sunk huge amounts into GCM, to us it may all seem a big gamble, but I bet he doesn't see it that way, and I'm betting he has know all along he had a good chance of getting GCM past the post, he is in a mix of similar minded cultures and I'm pretty sure knows just how to navigate those waters, so despite the few negative posts on here i am bullish, and grateful, and have no opinion for anyone else.