Cobus Loots, CEO of Pan African Resources, on delivering sector-leading returns for shareholders. Watch the video here.
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Hi Mr P, So assuming DCP get an offer they find acceptable, does that mean we continue as shareholders of the business?
Got a reply from the Practitioner, expecting offers by end of this week. Let's see what kind of offers we get (if any) as long as it's enough to enable restart of operations. I would be happy to see it through for next 24 months if normal trading resumes.
HI tozerk, I have asked the question to gauge if they have received any offers as the BRP suggested end of April. Might get an answer tomorrow, otherwise will call her. No guarantees mate, but not writing this off just yet.
Hi Mr P, Seriously, do you really think there's going to be a rescue package at this stage? Cheers
Hi Dar, That article was from South Africa jurisdiction, but I take your point. http://www.mondaq.com/southafrica/x/278364/Corporate+Commercial+Law/Can+a+business+rescue+practitioner+issue+shares Waiting for a few answers from the new BR practitioner.
http://www.proactiveinvestors.co.uk/columns/sp-angel/27655/today-s-market-view-birimian-bluerock-diamonds-plc-diamondcorp-plc-bluejay-mining-plc-kodal-minerals-metminco-ortac-resources-ltd-solgold-plc-27655.html " DiamondCorp (LON:DCP) Suspended – Bond holders and AMCU union blamed for DiamondCorp administration • DiamondCorp reported its ‘notice of intention to appoint administrators’ at midday on Friday. • The company’s debt restructuring appears to have been frustrated by the lack of agreement with South African bond holders. • Protracted discussions with the AMCU union are also blamed. • The company is not able to settle a £1m equity fund raise as announced in early April and we suspect the group is now days away from formal administration. • The failure to reach agreement has caused all employees to be retrenched and that funding agreed with the International Development Corporation ‘IDC’ of South Africa is now no longer available. Conclusion: It will be interesting to see if the bond holders settle at the 11th hour. The moral of the situation is that it is better for companies to raise straight equity and not to seek more exotic forms of finance which make restructuring all the more challenging in stressed situations. "
CRB- agree with a lot of your comments and thanks for the Monevator blog tip. Of all the shares I own(ed), this was by far the most grown up and genuinely informative board I read and occasionally contributed to. I have had my fingers burnt for the 1st time with this investment and it certainly delays my retirement by a year or two! However, no use crying over spilt milk- onwards and upwards! My learnings etched into my computer desk: 1) don't invest in AIM 2) don't invest in Africa 3) don't invest in a company, however tempting it looks, that is essentially a 1-trick pony. One mine, one act of God (i.e. Flood) and a one way ticket to receivership. Very sad. GLA.
Hello all, The original posting on this subject by misterpositive was " Can A Business Rescue Practitioner Issue Shares?" I don't know about South Africa, but in the UK the short answer is no................... I have had many years experience of this topic - many year I was a creit manager, so if you are "offered" shares by a BR then please say no. Almost certainly a scam...,. Be wary. ATB DAR-
I would have thought the larger share holders would have got together and insisted on a RIGHTS ISSUE. The BRP has had no regard for the share holders why were they appointed?
I'm inclined to agree. There doesn't appear on the face of it to have been sufficient effort (or desire) to get this mine back up and running. As people have said, in the grand scheme of things the money require to kickstart isn't actually that significant when compared to the amount that has been ploughed in during the earlier stages. We had the makings of a potentially very lucrative asset here and to me it stinks of something going on behind the scenes (as in another buyer / investor has pressured somebody into not restarting so they pick up the mine for cheap). Pure speculation on my part in what is a very very disappointing end. I mentally wrote this investment off some time back and so wasn't entirely surprised by the recent RNS. I'd already decided that I shall never go anywhere near AIM again and this reaffirms my thoughts. But, you live and you learn. My investments now (right or wrong) consist of 95% funds and that's the way it's going to stay for the foreseeable. As an aside I can highly recommend the Monevator blog if anybody is interested in the slowly slowly approach to investing. I'll be keeping an eye out on this until the final curtain is drawn but I wish you all well and hope that this hasn't affected people to severely. It's been a great board with some excellent posters and on the whole has been good reading with some very mature conversations (unlike the vast majority of the rest of the boards on LSE).
Well shareholders have not been kept in the loop. This looks suspiciously like someone is picking up the pieces for peanuts?
Mr P, not my field so unable to add constructively, but thanks for your (& others) work. The frustration remains that, without response from BRP, shareholders are seemingly out in the cold with only hopium...
http://www.mondaq.com/southafrica/x/278364/Corporate+Commercial+Law/Can+a+business+rescue+practitioner+issue+shares South Africa: Can A Business Rescue Practitioner Issue Shares? Few extracts below... It must be remembered that in terms of the Companies Act, shareholders are included in the definition of an "affected person" and therefore have the right to be notified of important and relevant events and to participate in court proceedings and business rescue proceedings as allowed by section 146. The duty of the business rescue practitioner is to prepare a business rescue plan for consideration by affected persons and possible adoption at a meeting convened in terms of section 150(1) of the Act. At such meeting the business rescue practitioner must introduce the plan for consideration by creditors and, if applicable, by the shareholders. The practitioner must invite discussion on the plan and conduct a vote on the plan. If voting on the plan takes place and the plan is supported by more than 75% in value of all creditors who voted, and at least 50% in value of independent creditors who voted, and no rights of shareholders of any class were altered, than the plan is regarded as finally adopted. If the plan provides for the issue of any authorised shares of the company, the practitioner may determine the consideration for these shares and in accordance with the plan, issue any authorised securities of the company, in terms of section 152(6)(a) of the Act. It must be remembered that section 140(1)(a) confers upon the business rescue practitioner full management control of the company in substitution for the board and pre-existing management during the company's business rescue proceedings. In terms of section 140(3)(b), the business rescue practitioner also has the responsibilities, duties and liabilities of a director of the company, as set out in section 75 to 77 of the Act. Accordingly the business rescue practitioner assumes full management control and the total control of the board of directors. This will in itself allow him to issue the relevant authorised but unissued shares to the investor and he would not need the consent or cooperation of the board of directors to do so. The business rescue plan will still nonetheless have to be passed on a majority of more than 75% of the voting interest, of which 50% will have to be independent creditors as envisaged in terms of section 152(2) of the Act. Accordingly it is only the creditors who will, in terms of section 145 of the Act, be entitled to vote in respect of the issuing of the shares, which issuing of shares will have to be canvassed in the business rescue plan. P.S....some very interesting points above....Thoughts welcome.
PL and the BOD decided on BR, didn't they? What has he done for shareholders? It will reopen and he will be there, bu just different name.
Agree, we have about 10 more business days. I will try and contact PL again, have not received any response to my email yet. Also called him last week but he was out. Will catch up with the BR Practitioner tomorrow also as was waiting for some response this week on any potential offers from one of the strategic investors (one is supposed to be International i think). Did not expect an RNS on 28 April, even though it's an "intention" to appoint administrators as a 5 day advance notice. BRP did however fwd my email to Paul for his thoughts on the 'Rights Issue'. Think PL thoughts in the current scenario could be (my guess) : * what if 'Rights Issue' is not taken up in full? and * whether PL can get someone to underwrite the Rights Issue? Immediate requirement to restart Lace operations is only USD $3m which is not that big. May be (as a requirement to exit BR), the BRP has to publish details of the source of funds for the $30m - $40m that will be needed to get to the Block caving operations, which is where more lucrative and higher value diamonds are located. Don't know how much the strategic investor is willing to invest, whether it's one party or a syndicate of investors etc. without knowing any deal specifics. DCP should take a leaf out of Lonmin's books who did a huge 'Rights Issue' for survival and restart of operations. They are slowly but surely making progress towards ramp up now. SA Credit rating downgrade & Govt drama has not helped the situation I must say and can put off foreign investors. Not sure whether Business Rescue was the right decision in the end as it seems to put lot of restrictions on what the company can / cannot do during the BR. An open outright 'Rights Issue' should have been better instead of putting Lace in BR. Having said that I am not 100% familiar with the rules & governance of the 'Business Rescue' specifics....it's something new for me. ATB
My dear Valency, My partner and I have a large holding in DCP, and are not despairing yet. We are silent watchers of this BB and would like to thank you for your posts and erudite views. Mr P, Daisan and dear Jaf, we have a few more days before the new beginning or the tragic end. Do not be too hard in your judgement of Paul, he has tried his best without the best support. South Africa is in a bad place at the moment, but not all in SA is bad. The young man Fortune Mojapelo and his Company are making amazing progress in SA, lets hope for Paul gets a second chance to do the same. Next week should reveal all. With thanks for all your views, Sheila.
Very Dodgy in my opinion.. to go into administration when there Appears to be more than 1 possible suitor, plus seemingly unexplored interest in rights issue... And I see no attempt to pursue it, or engage with shareholders in any way. Who wins? Definitely not us.
Really, do you think they'll still be trying at this stage. Not so sure myself. Something very dodgy has happened here I'm afraid.
MrP, it will surely take a miracle as the inept ANC government have all but killed investor appetite down South which seems to be the final nail. Considering it's fully developed and assets outweigh debt, some local operator may pick it up for a pitance & frankly can't see foreign investment showing interest in the current climate.
Feeling pretty sad after reading the 28 Apr RNS... still trying to recover form it. So we got 10 days now as absolute max for some 'White Knight' bid to emerge...or.....some alternative funding proposal to come through..........not relying on it though personally. RNS.... "In accordance with statutory requirements, the notice of intention to appoint administrators will expire 5 business days after today following which an appointment of administrators can take place within a further 5 business days thereafter if the financial status of the Company has not changed." ...RNS quote in last line..."if the financial status of the Company has not changed"... Is the company still hoping for a last minute 'Strategic Investor' to step in ?.......speculation may be... From what I remember, during my conversation with BRP, there are a few 'Strategic Investors' who want the mine for sure, one of them being same who offered to Buy-out DCP late last year. Could there be any 'Foul Play' here?...may be they want Lace Diamond mine, but via auction or during the liquidation at a significant discount to fair value ?.........who knows... Look forward to next week for a surprise deal Or some kind of miracle to happen, otherwise sadly it will be end of road by mid-May.
carvegyber, I am (was?) a long term holder here - supported them for years as I could see that it was a potential gem (pun intended). Unfortunately, the potential remains unfulfilled for now.
@bitnz, yep. It's an absolute f-ing joke. No sense of decency whatsoever. Best to all, it was a rollercoaster, so frustrating it ended with such a pathetic whimper. Think, collectively, that this thread would have done a better job of operating Lace than the the DCP management. So annoyed
to date no progress has been made by the BRP. Excellent work by PL and that D Terbal..... guy. What were they trying to do ... reopen the business with minimal dilution or go bust. I dont believe that a $million bondholder held everything up. Why couldnt they raise any via primarybid. Loo, at LGO who raise $2 million every 2 months. once DCP reopens PL wil surely still be there. I pray to Almighty god that whoever and if they did steal this from us rot in hell and all money become useless and live a life of misery...
Fortunately this is my first experience with the worst case scenario, but what interests me is the boards seemingly absolute disregard for shareholders. Am I incorrect in perceiving that communication since the flood has been perfunctory, at best, and zero response to proposals for alt funding options?
Very sad day. Do shareholders retain any residual rights over the licences to the mine or do these lapse with the company? No doubt the interested parties will reappear and take the progress we had funded to date. From my experience small cap mining in dodgy countries is a nightmare.