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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
Agneissearner, is 100% correct.
I think everyone should vote in favour of the resolution to return cash. If shareholders do not vote in favour of the resolution, that cash (and what little is left) will be squandered on other odd wild ventures and lets not forget. management pay.
Obviously the management now will almost certainly come up with a circular to vote against the resolution. One has to now suspect their motives. Certainly the motives on this management has never been in the interest of the shareholders.
It is time to get the money out (while it is still there), wind down the company and end the gravy train This management has completely failed the shareholder. For God sake, all shareholder should vote IN FAVOUR, of the resolution. Do not be tricked by the SCIR board who will come up with more nonsense with other great plans. Forget it. VOTE IN FAVOUR.
Agreed.
Actually borders on the verge of incompetence without saying it.
As you will have seen in the RNS dated 6 February 2024 Forest Nominees Limited who hold the shares on behalf of G.P. (Jersey) Limited who own 8.77% of the entire share capital requested that the company convenes a general meeting to vote on a resolution to return cash to shareholders.
The Board have advised shareholders to take no action at this time and that they are going to produce a circular containing an update on the board’s review of the strategic options and voting recommendations.
I am going to vote in favour of the resolution as the Board have so far consistently failed to increase shareholder value and monies have been wasted on the One Dyas aborted deal as well as the EAG/GGL acquisition so the cash from the Ruvuma disposal will be frittered away by the Board so the best option is for the cash to be returned to shareholders in the most tax efficient manner.
The 30 June 2023 accounts shows a loan of £1,522,000 to EAG Ltd and we are going to get back just £702k with a further contingent payment of up to £150k so even we receive the full £150k we will make a loss of £670k plus the associated selling costs so the total loss is in the region of £700k.
The £700k represents a loss of 46% of the loan of £1,522,000.
The Board spent 80k on solicitors fees and 100k on diligence costs for the EAG/GGL acquisition which completed on 25 August 2021 and shareholders approved the disposal on 10 January 2024.
The £700k loss increases to £880k when you factor in the £180k of costs relating to the acquisition.
In a period of just 28 months we have gone from what was to be an exciting new strategy into a complete failure and questions have to be asked about how good the due diligence was to say EAG/GGL turned out to be such a disaster.
AGE
Https://youtu.be/lISiW7wcIVc?si=ZisZco7_UF1RL-Ii
We will find out the secrets at the meeting are
SOUND - BUY BUY BUY
Bit surprised some micro raider hasn't bought these guys up. A few quid in the bank and a healthy Accounts Receivable, even if it takes some time to fill. Could be bought for a song. IMO it's a sign of an unhealthy AIM.
A trade of over 2.6 million just went through.
Wasn't it supposed to be warm winds emanating from the Sahara.
More like warm wind emanating from a cows a***.
I do not agree the Bod, have worked very hard filling there own pockets and after all they did change the name of the company which made a great deal of difference to the share price.
Given the constantly falling sp the options would have expired worthless.
Instead they blame the long suffering shareholders cancel the options and take another £450k out of the company.
They are even taking the money backdated to 2020.
What an incentive for doing almost nothing these last four years.
In the process of divesting of assets, Scirocco management has said a number of times that it will listen to the various and competing calls for what to do next. As it repeats above, all options are open to the company and the fact that Forest Nominees have blown the whistle to go into extra time makes a result possible although not necessarily imminent.
These guys have really had the shareholders tug them off.
Mustn't forget the millions for horse Hill and for helium one sales monies received.
Nearly forgot the £1 for reef.
Should have missed out the last four words on your second paragraph.
How many investors have lost countless thousands here.
So, this looks like it’s going pear shaped, hitting the wall, the end of the road, fail after fail after fail, share price has been run into the ground, (same as UKOG) SCIR, have done absolutely JOT. And still these CEO’s are talking the kings shilling, what an absolute load of crap this AIM is.
Reward for failure.
This/was an Investment Company, with basically one significant asset that they have achieved a low ball, and conditional offer for. Their salaries for what should really be part-time jobs are utterly ridiculous.
They should hang their heads in shame.
Glad this whole sorry saga is coming to an end....
Notice how the payment is perfectly timed.
So 500k gone from the shareholders funds already.
TR will have a good retirement.
Loss of office payments probably still to come.
I think the BOD should be sacked before they can take any more money out. The have presided over a massive share price slide and taken money out of the company without any input daylight robbery.
So you can have your cake and eat it.
KN-1 is not worth much and had little in the way of reserves. There was hope that the acquisition of new 3D over the area would potentially show how to get most from the licence but the dispute between ORCA and AGS most likely mean this wont happen as this would have been a freebie to AEX / SCIR. But both would need funds for new drills or remedial work.