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Stealthj89, I've been looking over the posts and noticed your question.
It's a long term play, the additional £100m from the Verne sale is based on performance targets for 2026. I'm guessing these will be measured against the 2026 accounts which will at best take 6 months. So I think the earliest end of the wind down is June 2027.
A long-term hold for private Investors a sell for wealth managers and institutionals.
One for the bottom drawer, it could turn out to be very profitable but a painful journey with the share price spiking when insiders get wind of asset sale prices.
Also this AI trend is going to lead to huge demand for data centres...the price they are selling Verne for is probably on the low side but I think with data storage prices going up surely the earn out is quite achievable
Don't really see why it's dropped from 28p now
To answer my own question - probably!!
Regards Chard_Nick
To come out from behind the sofa?
Hopefully, we'll do well out of this one!!
Good luck to all LTHs
I cannot understand why the directors did not defer any decision on the strategic review until after the Verne sale had completed. Surely, this would then have created greater clarity about the future options for the company and aided their decision making? I think it was premature to announce a managed wind down at this stage with the Verne sale still up in the air. I just don't think this board of directors is up to the job. In a few weeks, we will get a trading update, an "independent" valuation of the assets and the full annual results. These documents will tell a tale. Meantime, I cannot believe this company's market cap is around 150 million today! If I had bigger pockets and could afford to wait, I would certainly be loading up at the current price. Someone is going to make a killing on this company, but not the small shareholder methinks! AIMO
I can't wait to read an update from 'The Oak Bloke'. Another of his picks crashed and burnt. What will he say this time?
Bad numbers and bankrupt numbers are not the same thing. I see value here and am prepared to take the risk, and I expect a reward if the risk taken lands in my favour.
At the end of the day, the consultation extension is a few months, and the Icelandic concern the weight of investment of Ardian France SA in Iceland if I have read correctly.
My bet is that 3 months won't make much difference to DGI9 given revenues, and that approval will follow.
Thereafter, looking at the Arqiva transaction, £300 million went towards equity with the rest VLNs that in principle earn a return for DGI9 has holders.
We will see.
Temp le if you are expecting bad numbers why are you still invested?
"a suspension now." There I agree ... should have been suspended after the announcement of the wind down until clarity prevailed. Too late now.
Needs an RNS now surely
Looks that way, my concern is genuinely a suspension now.
"If DGI9 cannot relinquish the other assets, it's curtains."
Posted 6 month revenues were of the order of £24 million after taking away management fees. The issue is that current revenues do not pay the 6p dividend intended plus interest from the RCF.
As yet we don't know what revenues have been June-Dec 2023 nor do we know the future investment cash demand of current businesses. Someone will know be leaking that information .. and it likely will not be pretty. But these are currently unknowns to the wider market.
If DGI9 cannot relinquish the other assets, it's curtains.
"My maths at the moment, sell Aqua Comms for £150m and Elio for £30m + £50m cash."
I can work out the sums .... now read the background text ...
"As such, while D9 will continue to consider and be open to all options for Arqiva which are value-accretive to shareholders, the Board has decided to defer a sale process for D9's stake in Arqiva for the time being. The Board will continue to explore various options including capital markets alternatives."
Arqiva will more than likely list on LSE in the near future ... that process was delayed in 2017 because of Brexit uncertainty.
Whether DGI9 survives long enough is a different matter.
It all adds up to a really poor outcome for something that started with so much promise- America does tech. London does not do tech- full stop
50p?!
My maths at the moment, sell Aqua Comms for £150m and Elio for £30m + £50m cash.
- RCF £35m (post Verne sale)
- 10% selling fees
= £207m (+25% from today)
Give Arqiva away to someone in the street for free and set fire to the rest of the assets.
I'm joking but seriously, we're priced astonishingly low now.
I want 50p a share. That's my target - so I'd vote against a takeover.
Wow, this has no brakes, surely ANY asset management company can step in now and pick up "£800m" worth of assets for about £200-£250m? Who would vote against it now?
"The Board intends to immediately commence sale preparations for the Company's wholly-owned assets ahead of launching competitive processes later this year. "
The board are not in a hurry to sell assets .... but bear in mind as assets are sold, management fees relative to income will increase so head count needs to reduce proportionally.
Surely the holdings are still providing cash flow and once Verne is sold and the debt is repaid the trust is in a good place?
No need to sell at any price to wind up fast as the cash flow will be significantly improved.
30p is my breakeven. I’m confident we can make that but the only issue is how long a wind up will take.
In principle yes the blocking of Verne sale means a change in strategy … but the cash return on assets is currently 6% rather than the predicted 10% … there is no dividend … so that’s a cash saving … if the company is winding down it can reduce head count, making further savings … and no profit warning as yet so either the directors are in breach of their duties that is entirely possible … or things can bumble on to get past the current hurdles as interest rates fall.
I suppose the reasoning behind this, the bear point is if the Verne sale is blocked then that is problematic.
"Hardly seems a rational response but there you go."
Agreed.
NAV in September was around £850 million plus £350 million loans makes around £1200 million in assets. Verne is being sold at around 75% of NAV but there is an earn out of a further £100 million that we can ignore for now.
So £1200 million x 0.75 minus £350 million RCF gives a sale value of £550 million and a valuation of around 63p a share.
There will be other costs of course ... with the question being whether cash flow can keep DGI9 alive in the meantime.
Cash I assume is still coming in from the assets held so I fail to see with dividend suspended why the income can't keep the company alive until the first sale comes through as the hurdle to worry about.
Comments?