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Don’t think a buy back is always a panacea. Look at YCA and EMG. Both been buying or ages. There are other examples as well.
I’ve no idea why they don’t rise.
I think in saves case they could buy back and park the shares in treasury. Then if they need money they can sell them again on the back of a higher sp. e.g finance drilling after gas contracts signed.
That saves expense of placings etc.
Interesting discussion. Apologies it's been a few months since posting. I had this very conversation with Darren Gee who is CEO of Peyto during crash a few months ago. Peyto is much bigger than SAVE and trades on TSX. Talking to traders buyback shares (NCIB) provides additional liquidity for shorts. When those computers see the buyback orders they pounce and short the stocks even harder driving them down even more. In Peyto case computers make up 70% volume they simply didn't have enough cash to against this trading. It was an interesting perspective and debt paying down was a priority for his company. Appreciate this is AIM and it's far more illiquid in SAVE case. I still feel we will do well in time.
There are ways and there are ways to get a sp to move. If there is a seller take them out with a buyback( no brainer - in fact, extremely canny at these prices) even if there is no " big seller" (at rock bottom price when the company is delivering???? ha ha) announce a share buy back that will have same effect. Why not????
Off market buying though a company placement for whatever reason seems by far the favourite way for II's as a rule in my experience on AIM VS.. eg those placements at 35p and 28p ..
The key to achieving open market buying from II's is to give them the confidence to do it.. and AK may have to properly encourage this imho.. and not just do whatever easy 'mates rates' placing off market.. but the thing is II's are so big a dependency here he could easily just do whatever they first suggest..
btw: the update we just received was in no way guaranteed to be that solid.. maybe even well informed II's were somewhat worried ahead of it too.... but now they can be more at ease.. and so a new paradigm from here hopefully .. where the s/p can start coming back via whatever way or other..
Makes me think there are no previous bond holders selling big...
Nice to - yes there are many different ways of doing it , all would have a very positive response. It is strange how all of the IIs were happy to stump up to find the acquisitions ( the orig and the enhanced gas processing deal) at 35p and 28p but no one interested in buying a few million at 7p to bring down their average. Institutional investors own 67% of the co remember.
I should have explicitly included the following in my afore post : the fear that II's generally seem to have in buying in the open market for AIM names is that as soon as they stop buying , liquidity dries up again and the s/p is easily 'brought' back down.. a multi month share buyback scheme, even of moderate size, kicking in off the back of any buying exercise they might undertake would allay such a fear a lot imho
How about AK showing how canny a true Scot can be by indicating to his II's base in the presentation round off the back of this good solid update that the company would of course see an appropriately sized share buyback exercise as a good value enhancing idea from later in 2020, finances permitting.... and the II's therefore have further confidence here and so add in the open market ahead of any possible buyback scheme, and this s/p goes back into the teens and AK then does a small size slow burn buyback exercise - eg USD 4 or 5m over 6 months - to help this share at least sit very comfortably in a more respectable 13p to 19p range ?!
Agreed.As I posted months ago, a modest or even not so modest , share buy back at these levels is an absolute no brainer.
Much better value and VALUE ENHANCING than a divi or even more acquisitions at this stage.
AK has proven he is a competent and shrewd operator. I cannot believe he is not planning or already initiated a share buy back.
We know we are prioritising debt repayment and already achieving this but a few million can ALWAYS found for such a pretty amazing opportunity to buy back shares at a quarterishv(28p) and a fifth (35p)of the placing prices for the acquisitions!
In fact AK may well have set plans in place for MMS to accumulate for a purchase in one go. It deals with any bondholders that need to sell ( at a 75% discount???) and is extremely value enhancing all around.
I may be no financial wizard myself, but I would be borrowing the odd 5 or 10 million from one of the many facilities we seem to have all over the place. What better use?? The opportunity won't present itself forever. (AK - as u may gather I already thinking u r doing a good job but grab this now!):-)
NtoM- Assuming you are correct that we are in closed period until audited accounts are published, there is a danger that the half year accounts closed period will overlap the delayed annual accounts closed period. There is also the possibility that the BOD are in possession of price sensitive information. All of which could unfortunately delay executive buying.
But the first thing i want too see is executives aside from AK building out decent holdings here.. great if AK adds more too of course.
My guess is as the audit of last years accounts is not yet complete that they may be in restricted/closed period still ? But as soon as audited accounts for 2019 are published then buying from executives should happen, please !
And if cash accumulation continues in current decent vein a $5 to $10 m share buyback later in year would absolutely be extremely helpful here too.. as, of course, would any new or existing II buying IN THE OPEN MARKET ( and I hope management are lobbying II's hard to buy IN THE OPEN MARKET off the back of the good solid update they've just RNS'd)
Meaningful buying from wherever would do wonders for an illiquid share such as this imho.
Agree strongly with the point about limited free float. That’s exactly my point here. There’s often a very wide spread, few trades, no buying pressure to speak of and a bit of selling which has us at this joke SP. A commitment to put £10m into buying shares would put a rocket up it as the supply of those shares would be limited - especially if an ongoing commitment rather than a one off.
On paper Savannah looks great but there’s a stand off in the market that has suppressed the SP. The returns for long suffering shareholders of a reasonably modest buy back in the context of FCF would be significant here.
No matter what no stock consolidation. That would definitely be worse. Cannot see why they would do it anyway.
After all this pain and swaet not really making life changing money in Energy (though deep value play per my view but has repriced and post pandemic will be interesting to see where the dust settles - ONE BIG THING GOING FOR OIL IS OPEC!!!)
Greta Thurnberg and the woke snowflakes with this misplaced climate garbage rot in hell.... have needlessly screwed our sector. Read about German and New York state actual costs of windpower (initial don't include decommissioning, maintenance etc) - all window dressing garbage..... we need to make fossil fuel more efficient.... priority should be to feed the world not burn money going green as the dumb as f*** AOC bartender turned legislator has got the media brainwashing on behalf of the left.... along with the mental ****** that is Greta....
Thank you Tier - to think I could have invested more in TXP than average down in this gutter dog of a share :(
And on top of the SAVE I had the bad misfortune of holding on to Hurricane when I could have sold for 100% profit - also could have exited SAVE post averaging down with a minor profit on its run to 28p after the long delayed 7 transaction close...doesn't pay to hold these AIM shares for long...... TXP has been the exception and saved my portfolio thanks to my buy at 13p and then averaging up at low 20s - along with Rockrose but there again after having bought 500p could have sold at 2000p - now stuck with the lowball takeover offer... just think we will probably be taken out at 10-12p in SAVE given the derisory offer that RRE agreed too...
That was in response to luck’s posts.
You’re speaking sense. No matter what management will do very well out of this, tons of share option and huge salaries. So will the latecomers @7p. But for those who supported the company right from start, completely hard done by, no rewards whatsoever for being loyal.
I ‘think’ they will agree. :))
To quote Michael Winner “calm down dear”
Absolutely has to be buyback - I don't wish to give the government any of dividend in tax gains when I have suffered such severe capital loss on the garbage share that is SAVE with the clueless 3rd gutter management at the helm...
As I see it a buyback allows existing shareholders the chance to sell out without trashing the SP. And as we know there is one (or likely more) large shareholders who want out.
On the other hand, a dividend gives a reason for existing shareholders to stay put and new ones to buy-in (those wanting income).
AK himself says in the last AR that O&G investors are nowadays looking for income.
I doubt there are 130m share available in free float anyway, II hold approx 700m, members on here must hold between 30-50m, they would have to come from the bond holder and no one knows if he is dumping or not because info on holding thresholds for this share are sketchy to say the least.
Any and every purchase has to be RNSd next working day as a ‘transaction in own shares’ RNS. So no it’s not Save buying.
At the AGM a month ago AK said that with the share price at 7p a buy back makes more sense than a dividend but he also said that there were no immediate plans to do so and would only review the distribution policy after the end of this year. He stressed the primary focus in 2020 was to maintain corporate liquidity to enable the company to enact its business plan. He also referenced this decision to conversations he's had with the II's. I doubt anything has changed that quickly.
Agadem, I'm no expert either (and don't purport to speak for everyone!l) but as the resolution was passed at the AGM they could have instructed Mirabaud to perform a buy back, but the resolution does state they have no intention to do so (in which case, why ask for the authority to do so??)
'Resolution 11 – To approve the purchase of the Company’s own shares
This resolution would, if passed, authorise the Company to make market purchases of up to 149,361,621 of its own ordinary shares, representing 14.99% of the current issued share capital of the Company. This resolution specifies the minimum and maximum prices at which the ordinary shares may be bought under this authority. This authority will expire at the conclusion of the Company’s next annual general meeting. It is the intention of the Directors to seek to renew this authority every year.
The Directors have no present intention to exercise the authority granted by this resolution, but the authority provides the flexibility
to allow them to do so in future. The Directors would not exercise the authority unless they believed that the expected effect would promote the success of the Company for the benefit of its shareholders as a whole. Any shares purchased would be effected by a purchase in the market and may either be cancelled or held as treasury shares, which may then be cancelled, sold for cash or used to meet the Company’s obligations under any employee share scheme
I’m not sure whether they’re aloud to as am no expert on AIM rules. But there seems to be a big seller at around 7 to 8p. And over recent weeks we’ve seen a lot of buys going through between 150 & 500k. Could it be SAVE doing the buying?
If they did throw £10m at it, it would reduce us from 1bn to 870m...