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Where is the share price currently compared to your average share purchase price?
The current bid price is 0.30p and LSE shows that the market cap of SCIR is £3,150,000 however there are 900.5m shares in issue so 900.5m x 0.30p is £2,701,500
Now lets compare that to the total amount raised from issuing shares net of costs which is £35,059,000
2,701,500/35,059,000 X 100 is 7.7% so there has been a reduction in value of 92.3% of the net proceeds from issuing shares!
AGE
What is the current and past Board's record on creating shareholder value?
If you look at the cumulative P&L account below you will see that the total losses for the period 2009 to 2022 is £29,955,000
If you look at the cumulative cash flow statement you will see that a total of £37,414,000 has been raised by issuing shares and the costs for that were £2,355,000
The Board spent £1,293,000 on the abortive One Dyas deal
If you look at the document for the EAG/GGL divestment you will be able to calculate that EAG/GGL was sold at a loss of between £725k to £875k depending upon whether the £150k of contingent consideration is received or not.
In a period of just 4 years the Board paid £2,132,000 to Gneiss Energy in consultancy services which is owned by Jon Fitzpatrick and his wife.
Current and previous Board members have received a total of £5,037,000 pounds in Directors remuneration including share based payments.
My understanding of creating shareholder value is that the Board is able to generate both turnover and profits and that it rewards shareholders for taking risks in investing in the Company by paying dividends.
As the SCIR Group was not generating much in the way of turnover and it as has only ever made substantial losses then it is not possible to pay dividends to the shareholders but have they managed to increase the share price and make a profit on the sale of Ruvuma?
Well the answer to that would be a "No"!
AGE
Cumulative Directors remuneration including share based payments
2009 to
2022
Total £'000
Directors remuneration inc share based payments
Alastair Ferguson 485
Tom Reynolds 587
Donald Nicholson 244
Muir Miller 88
Doug Rycroft 50
Jon Fitzpatrick 305
Don Strang 193
Don Malling 443
Fergus Jenkins 462
Sandy Barblett 249
David Lenigas 669
Kiran Mozaria 124
Vincent Fodera 54
Neil Ritson 1,084
Total 5,037
I think the cumulative cash flow for the period 2009 to 2022 below give you a a good idea of the financial performance of the current and previous members of the SCIR Board
2009 to
2022 Cumulative
Total £'000
Cash & cash equivalents b/f 272
Cash absorbed by operations (14,094)
Proceeds from disposal of investments 5,265
Issue of shares 37,414
Share issue costs (2,355)
Income tax refund 13
Loans 1,070
Cash movement in relation to assets held for sale (2,467)
Purchase of intangible assets (17,952)
Purchase of investments (4,133)
Net payment on settlement of derivatives (1,310)
(Repayment)/proceeds of borrowings (616)
Cash settlement of shares not issued (362)
Interest/fx 5
Cash & cash equivalents c/f 750
I think the cumulative results for the period 2009 to 2022 below give you a a good idea of the financial performance of the current and previous members of the SCIR Board
2009 to Cumulative
2022
Total £'000
Revenue (1,457)
Share of profit of joint venture (40)
Exchange losses 56
No details 4,623
Audit fees 294
Prof legal & consulting 1,832
J Fitzpatrick (Gneiss) 2,132
AIM related costs including investor relations 916
One Dyas 1,293
Accounting related services 606
Travel & subsistence 188
Office and administrative 295
Other expenses 140
Impairment losses 1,384
Directors remuneration 3,549
Share based payments 1,922
Wages and salaries and other costs 1,023
Total of administrative expenses 20,253
Loss before investment activities 18,756
Operating expenses 268
Interest income (233)
Finance costs 786
Exchange losses 81
Amortisation costs 759
Impairment losses 3,332
Provision for losses on financial instruments 1,567
Other income (189)
Other gains and losses (3,384)
Sub total 2,719
Loss/(profit) continuing operations before tax 21,743
Loss discontinued operations before tax 8,225
Total Loss 29,968
Income tax (13)
Total Loss after tax 29,955
AGE
As the saying goes turkeys would not vote Christmas if they had the chose so if you were a Board member of an AIM Company you have to ask yourself would you advise shareholders to vote for a resolution that puts an end to your well paid part time job?
I must congratulate who ever created the Board's response document as it contains what appears to be compelling reasons as to why shareholders should vote against the resolution however I have been a SCIR shareholder since July 2011 and I have good accounting knowledge and I know how the AIM market actually works so I am going to vote in favour of the resolution to return cash to shareholders and I will provide you with facts so that you can decide if you want to vote in favour of the resolution or not!
I will provide you with lots of information in further posts and so as to not overload you with too much information I have summarised below why I am voting in favour and then you can read further facts and information in my later posts.
What is the Board's past record on creating shareholder value?
Where is the share price currently compared to your average share purchase price?
Have the Board spent shareholders wisely and managed to obtain the best value for money that was available?
Was the EAG/GGL a wise investment considering the Board spent £80k on legal costs and £100k on due diligence costs as it was sold at a loss of between £725k to £875k depending upon whether the £150k of contingent consideration is received or not.
How good was the due diligence to say that EAG/GGL was sold at such a large loss and that the GGL accounts for the year ended 30 September 2021 included a massive prior year adjustment as the finance leased AD plant had not been accounted for correctly?
The GGL accounts were submitted to Companies House on 18 August 2022 and SCIR announced that it would acquire GGL via EAG on 25 August 2021.
If the new strategy was such a great idea then why did the Board decide to sell EAG/GGL at a massive loss as they had spent a significant amount of money upgrading the AD plant and they had arranged a loan from AIB (UK) and they used it to repay the AD plant finance lease loan as a satisfaction of charge was registered at Companies house for GGL on 19 July 2023?
AGE
Sounds good to me. At least a lot better than anything to do with this company has sounded over the last 10 years.
If delisted, you won't see a share price rise, or be able to trade. But you should get a periodic cash return.
I would be quite happy to wait a year or so for a 200% rise rather than watch the BOD do nothing whilst draining our funds as they have done so far.
1.2p over time, if all the contingent payments come in.
So if we shut down we get 1.2p per share if I read that right???????? That would be much more than I would expect this bunch of muppets to produce. Wouldn't the best option for shareholders be to buy a load of shares at 0.4p then shut the company down and wait for the 1.2p return?????? Surely I must be wrong in that thinking????
No mention as to what the resolution is.
RNS - there is an attraction to a RTO, namely the BOD would not be in control.
Can the company delist to save cash, and we put in place a low cost caretaker BOD to simply file companies house returns and distribute cash received?
How many shares in issue?
What would we receive back, few quid and a curly wurly.
This board have been nothing short of atrocious....make sure they got hold of as little as possible now!
No date yet for the meeting I expect we will be given about one days notice then make it difficult to vote, not sure if there is going to be any vote at all.
The fundamental problem will be the receipt of the total $16 million.
Just how many years will it be before all received.
Not sure if the company will still have listing fees and directors fees and other expenses until all received. Liquidator fees will probably be based on the total assets so a few hundred thousand pounds at least.
I'm sure any remaining directors will get pay offs.
There certainly won't be $16 million being returned to shareholders.
Return the cash and minimise overheads and eventually wind down the Company.
Seems obvious to me now that the transaction was purely to generate fees and salaries. Buy high sell low. Fees pay just the same. Outrageous really.
With the BOD's track record of handling investments, I'm all for winding up and returning Ruvuma cash to shareholders. I don't trust them to invest wisely and keep costs down in the interest of shareholders.
Dear Members of the SCIR Shareholders Share Action Group,
I am a member of the Group and I wanted to seek members views on the resolution to return the Ruvuma cash to shareholders and also how you intend to vote.
Regards
AGE
It is interesting to read the 2023 AGM presentation dated 9 August 2023 as it includes a slide which contains the following information:
Investment Structure & Waterfall –a path to sustainable capital growth
The investment agreement was designed by Scirocco to provide for distribution of returns on a sale or other exit event (not relying on distribution of dividends)
• Equity proceeds for distribution take account of any thirdparty debt secured at the asset level
• Net proceeds to equity are then distributed as follows:
• First to allocate proceeds 100% to SCIR until all outstanding loans including any accrued interest are repaid
• Second to allocate proceeds 75% to SCIR, 25% to EAG Founders until SCIR received 2.0x all sums invested including any accrued interest on shareholder loans
• Third to allocate proceeds in equity proportions 50% to SCIR, 50% to EAG Founders
• This waterfall ensures Scirocco gets paid first and delivers a preferred return from any distribution
On the 10 January 2024 Shareholders approved the sale of EAG/GGL and the presentation is dated 9 August 2023 so in a period of just 5 months we have gone from a situation in which the presentation shows that the EAG/GGL model is going to deliver value to shareholders to a situation where EAG/GGL was disposed of at a loss of 880k.
If you search for Energy Acquisitions Group on Companies House you will see some submissions dated 24 July 2023 which precede the presentation date by 3 weeks for registration of charges in favour of AIB Group (UK) PLC.
The sale of EAG/GGL would have taken many months to organise and it would seem logical to conclude that these charges were put in place to facilitate the sale of EAG/GGL at a massive loss yet the presentation shows that the AD plant model is going to be profitable.
AGE
Have a look at the presentation that the Board prepared for the 2023 AGM dated 9 August 2023 and you will see that it costs £428k pa to keep an AIM listing:
As per the RNS the single proposed resolution relates to the request for the Directors to put in place a strategy to distribute cash proceeds from the sale of assets to shareholders.
The Board have had plenty of time and spent millions in consultancy fees in order create value for shareholders but so far they have failed to do so.
I will be very interested to read the Boards circular as it is quite obvious that it is in the best interests of shareholders to return the cash from Ruvuma to shareholders and then we can decide what to do with the money rather paying for the costs of having AIM listing and Directors remuneration as well as highly paid consultants.
You do not need to keep an AIM Company going and pay Directors remuneration to a CEO for what is a part time job for SCIR as well as other members of the Board.
Have a look at the presentation that the Board prepared for the 2023 AGM dated 9 August 2023 and you will see that it costs £428 pa to keep an AIM listing:
Listing Costs
£k
LSE costs 20
Nomad, Broker,
FPR & legal 218
Audit costs 55
Outsourced accounting 90
Insurances 30
AGM 15
TOTAL 428
AGE
Not sure what the resolution is? I think they are only asking what plans the BOD have to return cash. This Bod should have been sacked years ago they are only there to drain the company of cash as long as they can