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Let's not forget end of February is also the deadline for conditions attached to the GSA with ONEE, including authorisations, pipeline interconnection agreement, funding, Phase 2 FID, and commencement of works. One would have to guess there isn't a snowball's chance in hell of that happening and we will see an extension, but the distraction of Angus can hardly be helping. Meanwhile, what has happened to Phase *1* FID?
We may want news but Sound aren't going to give a running commentary while a possible deal is taking place. I doubt we will hear anything until its concluded one way or another.
Communication is key right now and the lack of it is worrying. There are too many question marks hanging over SOU for my liking.
The deadline is 15 February, so we’ll know whether the Sound bid is proceeding by then.
Is it another useless “box of sand full of gas” we’re buying ?? ...just as we thought things were headed in the right direction FFS... how about some communication GL, one thing you lack unfortunately!!
"A reminder of what this is all about."
thank you for that, it all sounds very positive on the surface, but there's a little voice in the back of my head that's saying "house of cards" and has the feeling of someone trying to offload something before it blows up in their faces
Sadly, Angus’s 1 October revised Competent Person’s Report has been overtaken by events, as its March 2020 predecessor was. It reported that the Directors of Angus were expecting first gas by end-February. The CPR’s author predicted mid-March. Now the Directors predict 20-30 April, with the proviso that it may be later. They can’t predict when certain key components of the plant will arrive. There are, as discussed before, time constraints in terms of loan interest and capital payments, due probably in June, and hedge contracts beginning in July. Failure to meet the terms of any of these may result in the company’s assets being taken over by its Lenders.
I agree with ps200306, that there doesn’t appear to be any clear rationale for a bid by Sound for Angus, and that something else is going on. They’re both over-borrowed and short of cash. The risks in Angus appear more immediate than those in Sound. They need a placing, really.
A reminder of what this is all about.
https://www.energy-pedia.com/news/united-kingdom/angus-energy-announces-revised-saltfleetby-cpr-and-an-update-on-the-brockham-licence-184632
I think we're all equally in the dark.
Anybody have a clue as to what is going on as it is above my pay grade !!
ddboy
Maybe the outstanding tax & saying we stop until sorted ?
Also we have this for new revenue…. Just hope all works out for the loyal share owners gla
Whatever emergency may be brewing here, I can’t see how bidding for Angus will resolve it.
The Sound share price was at 1.3p at the end of November. The rise since then is better than the performance of Angus shares since this bid speculation started.
Speaking of pump and dump, I also can't understand why SOU aren't taking the same approach. If they are so desperate for cash as to be considering a potential basket case like ANGS, why didn't they announce Phase 1 FID, watch the share price bounce and do a raise on the back of it. (Phase 1 FID doesn't actually add anything to the value of SOU, but enough punters here seem excited enough about it that you might get a temporary SP uplift). This is what makes me worry that there is some emergency brewing at SOU that we haven't been told about.
smithfields: this is what I’ve been trying to suggest. An offer by Sound for Angus doesn’t make sense at all for either party, does it? Even the rationale for it offered by the Sound management is exceptionally feeble. Perhaps the Sound management is unaware of the precariousness of Angus’s financial position. If so, a few days in the data room should clear this up. And Gneiss should be able to give them some advice on this! The best explanation I can offer for Angus taking the action they have in inviting bids is that Angus may need more money than their advisers suggested they could raise with their share price at 0.65p. They’ve got the share price up by 50% or so as a result of the 6 January announcement. There may therefore be a placing just round the corner. What experienced participants in the AIM often refer to as a pump and dump; though It’s not clear to me that this is allowed for a company which has put up the for sale sign.
The above is largely speculation on my part. The bottom line, however, is that the bid doesn’t appear to offer anything useful to either party and would presumably result in a number of Directors losing their positions. So there must be some other explanation for it all.
Surely, in view of the need for cash by ANGS they would be better off pulling the plug on this deal and go for a share issue....problem solved.
It’s all in shares though. Not 1.5p. It’s already worth just 1.32p. The overhang of Sound shares if this offer is accepted in the hands of Angus investors, many of whom are expecting “several bags” from their investment (inexplicable, I know, but that’s what enables the insiders on the AIM to make such a good living) will probably cause quite a big fall in the share price of the combined company - down to the 1.3p level that seems to have prevailed for a while until all this kicked off, I should think. But it’s not going to happen, is it?
What ever the outcome of the proposed sale of ANGS...the 'at least six' bidders will have to exceed the very generous SOU offer..
If I were interested in buying Angus or its assets, I wouldn’t wait until the Lenders have taken it over. The price will be a high one at that stage and they have deep pockets. Sound will either have to take a punt soon and assume Angus has got its sums right (for the first time ever) or they can wait, in which case they won't have the financial means to bid for it. In any case, the Lenders will be involved, since their charge on Angus’s and SEL’s assets give them protection against asset sales and they could probably demand immediate repayment of their loan. I think it’s the Lenders who have the whip hand here. I think Angus are in a very weak position. It must be clear to everyone that they no longer have any confidence in the quality of the asset and/or their ability to get it finished in time. Why else would they be selling an asset whose value they estimate at a multiple of even their current share price, so close to first gas?
'.. Angus has no cash and if it hasn’t got £4.4mm or so by end-June at the latest (they haven’t told us the precise timings of these payments) its assets may be taken over by its Lenders'
I'd say the 'ball' is in SOU's court.....the longer the deal remains unresolved reduces ANGS 'leverage'....there's no rush. The current deal is with ANGS....Should this lapse..SOU may get a better deal with the 'lenders'.
smithfields: yes, I understand the term “synergy”. I can’t see any here though. The only things they have in common are an interest in gas and inadequate financial resources. In addition, if the Angus Directors should perceive that they will be surplus to requirements in the event of a successful bid from Sound, they’re hardly likely to recommend it, are they? The whole point of these small AIM resource companies is to keep their Directors in the manner to which they’ve become accustomed for as long as possible.
Well, according to their offer, Sound are bidding to create a “platform”. Perhaps that’s similar to “synergy”. What they actually need is something that will add cash/cash flow. Angus has no cash and if it hasn’t got £4.4mm or so by end-June at the latest (they haven’t told us the precise timings of these payments) its assets may be taken over by its Lenders. The latest update to progress at Saltfleetby has put back completion of the project another two months, to the end of April, subject to parts being delivered in time. After that, National Grid and the HSE will have to examine and approve it all and the gas flow will have to be steady at the required pressure and tested thoroughly by NG before Angus can sell it. They still need planning permission for the changes to the original plans, and the outstanding EA and HSE approvals for which they’ve been waiting for a very long time. So you can add another month or so to the new schedule before they'll earn anything. And they still won’t have started on the sidetrack whose forecast production (even though all 9 previous attempts at a sidetrack failed from the well they were obliged to choose) will be required by September, to meet the hedge terms. Production from the two existing wells for a month is unlikely, even at current prices, to meet the payments on the Debenture. After that, if the Debenture holders allow them to continue, the hedges apply from 1 July. It’s hardly a sure-thing cash flow machine, is it? Add to all this the fact that the Angus management has never made good on any assurance or forecast. Not once. I don’t think the Sound management will proceed with its bid, but we’ll know by 15 February.
Synergy is the concept that the combined value and performance of two companies will be greater than the sum of the separate individual parts. Synergy is a term that is most commonly used in the context of mergers and acquisitions (M&A). Synergy, or the potential financial benefit achieved through the combining of companies, is often a driving force behind a merger.
Although the share deal offered may seem a bit high , however, one has to ask if cost saving can be attained through releasing six ANGS directors.?
smithfields: some, at least, of the five firms in the Angus data room may not be quoted companies. Angus has not disclosed whether it has done any due diligence on theses firms or on their ability to proceed with a bid. You’ll only find out who they are if they announce their intention to bid. That seems fair, surely?
Do you think the Sound share price will rise, or fall, in the event that they decide not to continue with their bid?
The annoying point here is that Sound is only one of six companies to be named as a contender for ANGS.....as a consequence has had a detrimental effect on the company's SP......the other un-named five have not been subjected to these market forces and are 'getting away with it', leaving their respective SP's intact.
If I wanted a part of Angus then I would buy my share at market price. .....but I don’t