Sapan Gai, CCO at Sovereign Metals, discusses their superior graphite test results. Watch the video here.
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They had been in discussions with a range of potential sources of finance in the U.K, N.Z, Asia & the US over the last few months, which effectively ended with the Redemption Notice demanding immediate repayment.
An update will be forthcoming as the situation becomes clearer, particularly as regards the future intentions of INL Investments.
CC, thanks for clarifying on the "ceased trading" item and also the social media post.
Hope something good comes of all this, for those with a stake. People don't deserve to be shafted in such a fashion.
Lost count of the numbers of times I’ve read that since Friday evening but without any details from the company it’s difficult to piece together
Dave82 don't worry my friend, will put your mind at rest later.
I have been here before and not saying two situations are alike, but the last one was worse than this but we knew more detail. This one surprisingly is not yet details are few and far between.
Is this paragraph from July 17th 2023 hold any clues especially the first stipulation?
The Subscription Agreement also contains certain covenants in favour of WHI in respect of (i) the Company incurring financial indebtedness in excess of £50,000 without the prior written consent of WHI, excluding the 2025 Convertible Loan Notes, (ii) amalgamation, demerger, merger or corporate reconstruction of the Company, excluding a change of control or other acquisition of interests in the Company by WHI or third parties, without the prior written consent of WHI, (iii) issuing shares or share capital (or any instrument convertible into shares or share capital) to any person, other than pursuant to options or warrants which are outstanding at the First Completion or pursuant to a bona fide employee share or share option scheme, without the prior written consent of WHI, other than in respect of repaying all or any amounts due under the 2025 Convertible Loan Notes, (iv) the appointment of new Directors of the Company without the prior written consent of WHI, other than to replace an existing Director, (v) any substantial change to the general nature or scope of its business as carried out on at the date of First Completion and (vi) entry into a material acquisition or corporate joint venture transaction, excluding for the avoidance of doubt the acquisition of trading stock in the ordinary course of business and distribution or equivalent commercial agreements in the ordinary course of business, without the prior written consent of WHI.
Countingcards- it sounds like you still have some hope of a resolution to the benefit of shareholders?
I should of added that they are technically insolvent and their assets may have fallen below the required £700lk requirement for the LSE threshold, given the current actions by INL.
Mr M
If I can just clear up one thing. I have it on good authority that they have not ceased trading, but have ceased share trading. The tweet that went out was a mistake in that it was already in the automated system and that now will be amended in future. As for why they are in administration, maybe for temporary safety, although not kidding anyone, you really want to try and avoid this avenue, but by the actions of INL it may have been forced for now.
Interesting that the "large supportive shareholders" were happy to throw their equity down the drain for the sake of a few million quid in funding? So close to East Imperial approaching cashflow breakeven?
Even on their social media, they have made no comments in relation to them ceasing trading and that they are going to appointing administrators?
IMO, may now assume this is a behind the scenes agreement between the new soon to be owners WHI and TB. Both parties will both know what they are doing is morally and ethically wrong.
It's clear this has been pushed into difficulty to get the Company on the cheap. Simple as that.
Fiduciary duty stands for absolutely nothing. The UK markets are a pariah.
I will forward the emails later today guys. From the contact I and others have had it transpires that funding negotiations stopped the minute the redemption was called in. The question is why, and how soon is the redemption payable.
Hello All
I have a vested interest in pursuing this and an explanation of how since March everything ticking along and then a bombshell of dept redemption. Absolutely no details of what led to this fiasco. I’m working hard behind the scenes to try and get answers as are others.
Something underhanded has happened to shaft us and I will not rest Mr Burt until we have some answers.
Can you also share with me please
Barryscott8765@gmail.com
Dan1605 - if you don’t mind also sharing with me at djzfraser at hotmail dot com that would be appreciated
I bet the old FD has some stories to tell, he resigned in Feb so not too long ago. There's some ambiguity around that funding RNS on Thursday, why bother releasing that.
Yeah CC, as I say, something not feeling quite right here...
I saw the announcement of a new customer in the US on X, shortly after they indicated they had ceased trading. Is that a marketing gaff by a junior member of staff I wonder?
This feels like a right AIM con job... and this one has a main listing!
Just sent over mate
Dan if you could send onto bould12345 and its hot with a mail and com. Just in case its blocked here. Appreciated.
I have been in touch with Tony Burt who replied only yesterday stating he would inform the market of the developments and asked for questions. Considering what has been released today this looks like complete BS. He did not come across as a guy who had just lost his business, in fact quite the opposite. The whole thing is stitch up but unfortunately for Burt he's left a trail in his wake. I don't think he ever intended to leave the market, I would good money on INL offering the cash required for full control of the business and old Tone just couldn't resist. Happy to share the emails with anybody who wants them but I would be following this up.
MrMagorium
You are raising exactly some of the points I have been asking today. The same video should be investigated as he clearly stated break even by the end of the year or before. Loan notes being called within the year, and no reason given as to why? No indication of any issues with INL in the video.
Either he is talking BS about large supportive shareholders, one of which is Aviva with around 8-9%. I have been onto Allenby but not getting any reply yet. You can understand a slow death and one could argue this is what has been happening here, and all the signs were there etc, but a sudden one especially with a company who already partner's and without much explanation is not adding up.
BS8765, agreed. 4.42pm announcement of potential suspension then pre market Monday closed down completely. This is severe and if the CLN redemption has created an insolvent situation then you would be trying to use time to see if there were backers. Either they have backers who do not want TB at the helm and that then means BODs are not fulfilling their responsibilities to shareholders. Yet I also have to say that 4 mins after suspension this morning they were tweeting about a new win in the USA! This is why I question "ceased trading" as in the shares? or ceased as in completely as a going concern.
I know might say forget it and move on. I reminded myself this morning of the similar situation 10 years ago, and there shouts of "its bust" "you have lost everything " and yet it came back 13 times the suspension price. Not saying anything like that here but this does not add up.
Something is going on here IMO...Just watched his March video again.
How can a company which is just about to become cash flow break even, run out of money and then announce administration, with loan notes called in less than one year from when they were issued.
On companies house, I see they had a subdivision of shares approved earlier in the year, so they can raise below a penny if in dire straits... and if you watch his last video, he mentions 'large supportive shareholders' who are interested in further debt finance... what was the Enterprise Value here 5 mil? And debt (+ accrued interest) 2.4mil. So just shy of 50% gearing and they wanted more debt ! That sounds dodgey for a start!
If I had a substantial amount in this, I would be asking big big questions...
Very suspicious
RNS late Thursday
RNS end of play Friday
Suspended Monday and into administration
This Process takes a lot longer than 2 days
Awaiting an RNS where it reveals TB has an interest in the new company that now owns the East Imperial assets.
A business called 'ITS' followed the same sort of scenario a year ago, however they sold the assets off to a new business at a substantial discount to NAV.
One of the substantial shareholders of the new business was the existing CEO of the PLC. And now they are even trying to get listed again! Wonder what chumps will end up carrying the bag there!
Sad to see this go under, here in the Bermele days but sold not long after the re- admission. The progress of sales were too slow and I recall the Bod at loggerheads. ATB
Hey CC, just to echo your point a business that has ceased trading is usually more forthcoming than what EISB appear to be.
They haven't updated social media to this effect yet, but given they have customers and suppliers who could of course suffer from this fallout, maybe they are doing the necessities behind closed doors?
IMO - when the death spiral finance was issued last year, that was the point people should have had alarm bells ringing. The fact they raised in Jan circa 350k, from some party, makes you wonder what that party was being told. It was at 1.1p also...
They have also undertaken a subdivision to raise below 1p PAR. So raising equity to repay the debt was surely an option?
This stinks unfortunately, but it is legal. I've seen it happen so many times. It's why the LSE/AIM will become a pariah IMO.
Countingcards, it is over. The company has gone bust (ceased trading) because on a monthly basis it spends more than it earns in revenue. This has been the case with this company for the past decade since it was founded. Burt never managed to come up with a viable business plan and was too stubborn to change. Since listing in 2021 he spent £9m of investors money. The company said after the January fundraise that the £300k it has raised would keep it gong until April. Well we are in April now and the company as it warned has once again run out of money. It is a shame because it has a super product. Unfortunately, the quality of the product was not matched by similar quality among the top management of the company.
This was put out 2 hours ago on twitter which is slightly confusing if the company has ceased trading. Should they still be tweeting?
East Imperial - Premium Tonic Waters & Mixers
@East_Imperial
·
2h
We're delighted to announce that #EastImperial is now served at Understory, San Diego. A revolutionary luxury lounge bar at the heart of the Del Mar Sky Deck. #EISB #AsServedAt
No one shareholder is in possession of all the facts. What we do now see is that there is the possibility that TB and INL had planned this from last year, because as of Friday afternoon we have no idea why all of a sudden they call in the CLN . If Burt only a month ago was saying we are close to break even and especially by Q4 2024, and they were getting business in the USA, albeit we not sure at what levels those deal were really worth then the Chinese would have been aware of this, so why pull the rug now? Has their been a default? If not then why take the entire company down if the Chinese were always after the Singapore arm of the business. That is clear as it was stated in the CLN notes. TB shares will go over to them as well, and which means he stays in the game in some capacity.
No one likes losing money and its best to remain positive for other things, but the speed this has been conducted at does raise questions. I personally have to believe that no attempts were ever made to find other sources of debr financing and that this was the route carefully planned from last year. What else are we to think?