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I thought I understood some of it but perhaps I didn't.
In any case, we can only wait and see what happens.
I am not sure of anything iWantThatOne, who can be with any RNS issued by this company?
I take new equity to include the issuing of new shares to existing shareholders. This can only be done at or above the Nominal Share Price (25p).
The term Issue Price does not appear later in the RNS. It only seems to apply to dealing with debt and outstanding payments. Neither is it at any time explained.
My GUESS is that suppliers and borrowers are being offered to settle the debt with new shares at a notional issue price of say 10p.
Eg: with the share price at 2p assuming AST owed you £100,000.
You would expect to receive payment of 100,000 x50 = 5M shares.
Eg: with a notional Issue Price of 10p assuming AST owed you £100,000.
You would only receive payment of 100,000 x10 = 1M shares.
All these payments would be made in 25p shares.
Assuming the supplier immediately sold his Issue Price shares for 2p (their trading value),
he would receive £20,000. An 80% haircut on the £100,000 owed by the company.
Are you sure about the CLN, Kenj? My interpretation of the RNS was that the debt swaps and new equity would all be at the same issue price. Let’s say 5p (I don’t know). So £61m+ equity at 5p would be 1.22bn+ new shares. And 6.4m of CLN would be swapped for equity at 5p less 20%, ie 4p, ie 160m new shares. I’ve ignored consolidation / subdivision here for clarity.
I think that I may have made some sense of all this. Or on the other hand, I may be completely wrong!
"Shares in lieu of fees
In addition, subject to obtaining the necessary shareholder approvals and reaching agreement with the various counterparties summarised below, the Company intends to satisfy amounts owed to various parties as follows through the issue of new Ordinary Shares at the Issue Price:"
Suppliers bills and adviser fees, plus some director remuneration is to be paid by the issue of new shares at the "Issue Price". But what is this? The issue price is not stated in this long winded RNS. It is also interesting that all this is discussed before they mention a subdivision of shares.
The suppliers and advisors are, I suspect, being offered payment in shares based on a yet to be negotiated price - the Issue Price. A similar, but more generous offer has been made to some lenders.
"As per the Company's announcement of 1 March 2023, various lenders who hold £6.4 million of secured convertible loan notes will have the option to convert their secured convertible loan notes into Ordinary Shares at a price that is equivalent to a 20% discount to the Issue Price."
They will be offered a poor price to settle this debt with the threat of insolvency hanging over negotiations. I'm guessing an Issue Price of somewhere between 10p - 20p. With the shares last valued only 2p, that is quite a haircut, but it is better than nothing.
I am sure that I am not the only one here confused by some of these terms, so I have looked them up, and posted the definitions below:
A SHARE CONSOLIDATION reduces the number of shares a company has in issue.
This is also referred to as a REVERSE SPLIT.
Eg: After a 1 for 10 consolidation, you would receive one new ordinary share for every ten existing ordinary shares held.
A SHARE SUBDIVISION is where shares are each subdivided into two or more new shares, thereby increasing the number of shares in issue. This is also referred to as a STOCK SPLIT.
Eg: After a 10 for 1 subdivision, you would receive ten new ordinary share for every one existing ordinary shares held.
Not sure that I follow your logic Meldrew44.
You said that "The rest of the proposed plan, including the subdivision, seems to me to depend on there being a higher share price than we currently have".
I would have thought that the subdivision is the very first thing that the company must do. They cannot issue any new shares until this is completed, as they admit in the RNS.
"In addition, the Company proposes to further undertake a sub-division as, under the Companies Act 2006, a company is prohibited from issuing new shares at a price less than the nominal value of its shares. Accordingly, in order to implement the Prospective Recapitalisation Plan, it will be necessary to reduce the nominal value of the Ordinary Shares to below the proposed Issue Price."
Afternoon all,
I've now read through the RNS and think I understand some of it. Others might think I'm being unrealistic. They might be right.
Anyway, this is what I think:
I see no contradiction between the proposed consolidation and the proposed subdivision. I think they are two separate parts of the plan. I believe that the consolidation is likely to be similar to the reverse split of 2016 so will have the effect of increasing the share price by reducing the number of shares in issue. The rest of the proposed plan, including the subdivision, seems to me to depend on there being a higher share price than we currently have.
Morning meldrew44 I thought at the time that consolidations more often than not end up down where they started sp wise and they did. The rns says consolidation but then goes on to say subdivision which is the opposite.
Sharesforlife thanks for the recent info.
It will not be the first time that AVO has consolidated its share capital. They last did it, with some success, on 1/7/2016 when they did a reverse split of 1 for 25 existing shares. Each share immediately increased in value by 25 times
If they repeated the exercise, using the same consolidation figures, they would end up with 21,702,955 shares worth about 48p each instead of the current 542,573,869 shares worth 1.925p each. The value of each shareholder's holding would remain unchanged. I guess that the increase in the value of each share might have an impact on how the the rest of the proposals in the RNS might be interpreted.
The New alleged Investor is a rich Industrial family FACT.
I’m sure this is all seat of the pants stuff with multiple things happening simultaneously, so I’m prepared to give them a pass on this kind of stuff for once. First of all, of course, is getting the bridging finance sorted! Without that we’re stuffed.
I’m hoping one or more of the radiotherapy companies ends up being the / a major investor, because a) for what they can bring to the party and b) because the shares will be stickier than if sold to the wider market. And a full buy-out may give us a better return.
So a consolidation to sort out the convertibles and then a sub division share split to reduce the nominal value to raise equity !@#%@ I think or maybe I don't.
MasterPlan,
I suspect that you are right, but why talk about issuing shares before you talk about a share consolidation, especially when the one has to precede the other? And why have they still not said what the new nominal share price will be? They have had plenty of time to think about this. The whole RNS is disjointed and confusing, because it has been presented in the wrong order, and is full of wishful thinking rather than factual information.
And here is a prime example of their muddled thinking, and poor phrasing.
"In addition to obtaining the shareholder approvals noted above, in order to implement the Prospective Recapitalisation Plan, it will be necessary to first implement a capital reorganisation of the Company. At the date of this announcement there are 542,573,869 existing Ordinary Shares of 25 pence each in the capital of the Company in issue. The middle market share price of each Ordinary Share as at close on the date prior to suspension of trading in the Company's shares on 30 June 2023 was 1.925 pence, giving the Company a market capitalisation of £10.4 million. The Directors consider that the number of existing Ordinary Shares is not only unwieldly in volume for a company of Advanced Oncotherapy's market capitalisation, but when combined with the prevailing share price, is not conducive to an orderly market. Accordingly, the Directors believe that a consolidation of share capital will result in a more appropriate number of shares in issue for a company of Advanced Oncotherapy's size in the UK market."
So the Directors think that the number of existing Ordinary Shares is unwieldy now!
Do you think that someone should tell them that there is likely to be ten times more shares in issue after the share consolidation, and then anything up to another ten times that number after the fundraising is completed.?
It’s referring to 20% discount the new issue price which was always in the agreement but I don’t think the issue price has been decided yet.
"As per the Company's announcement of 1 March 2023, various lenders who hold £6.4 million of secured convertible loan notes will have the option to convert their secured convertible loan notes into Ordinary Shares at a price that is equivalent to a 20% discount to the Issue Price."
So lenders are being offered the chance to convert their loan notes into shares at a price of 20p per share (ten times more than the closing sp before suspension).
Shares in lieu of fees
"In addition, subject to obtaining the necessary shareholder approvals and reaching agreement with the various counterparties summarised below, the Company intends to satisfy amounts owed to various parties as follows through the issue of new Ordinary Shares at the Issue Price:
· the Company is hopeful that £0.5-£2.0 million of payables to certain suppliers will be settled in new Ordinary Shares at the Issue Price (the "Supplier Fee Shares"). Negotiations with selected suppliers are ongoing;"
And suppliers are being asked to settle their outstanding bills with the issue of new 25p shares. (At current sp of 2p, they would be getting 8p in the pound to settle the bills).
The Company is hopeful, they say. I bet they are!
I agree that it would be great if the news were better and not include so many uncertainties but it is a lot better than losing everything.
If the terms of the recapitalisation plan turn out particularly poor for existing shareholders then an offer for the company now might be a much better option, in which case the Board would be duty bound to recommend it. (Clearly they have no duty to prospective shareholders who would be thwarted if the recapitalisation didn’t go ahead) That seems to me the best situation for us existing shareholders - then the terms of the proposed recapitalisation would be adjusted (logically, at least) according to the value placed on the company by the offerer, and the Board can decide which avenue looks best.
Whilst the Prospective Recapitalisation Plan has been the Company's primary focus, the Company remains in discussions under the Formal Sale Process with strategic players in the radiotherapy sector.
Better something than nothing.....and if this is the case than it's positive news but that's just about that,I wouldn't describe it as excellent news.....
Yet,to bring the LIGHT machine into the medical world will be certainly brilliant news as a potentially revolutionary treatment for cancer, lots of hard work has spent on that system so to finally to get it work will be massive to many sufferers. This is for sure.
As for us share holders lets just hope that we may get a little rewards for our loyalty one day, but I doubt it will be much or soon enough.
GLA.
At the time loss 1100 if i held be 20000 so that was a result
It is excellent news. Quite apart from the fact that AVO should retain control of LIGHT so should be able to bring its plan of democratising proton beam therapy to fruition, it also means that our shares should retain some value, as opposed to facing the risk being valueless. We might even see the value of our shares increase over time, especially if AVO becomes the proton beam therapy's version of, say, Microsoft.
It all depends at what price they raise the new equity. I’d be astonished if it’s at the (pre-suspension) 2p or so as the Board will argue the resulting mcap would overly disadvantage existing shareholders.
Is it excellent news though ? Dilution would horrendous, did they state a price for D4E or will it be at 1p, it just means the market cap balloons and any future little rises in the share price means a huge jump in valuations.
Current Market Cap’ £10.4m.
A number of caveats on the new £110m financing but hopefully it will successfully bring LIGHT to market.
Pleased to see the Plan, need to read it properly. Good to see there is already a commitment to some equity investment, if I read it right.