Rainbow Rare Earths Phalaborwa project shaping up to be one of the lowest cost producers globally. Watch the video here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
I've not heard back from either of my SIPP platforms yet but so far I've found the following -
https://www.thisismoney.co.uk/money/investing/article-10648215/What-happens-delisted-shares.html
"Investment platform AJ Bell confirmed it will send a message to shareholders if a company is delisted.
'This message will have a brief summary of what has happened and a link to the full statement from the company so customers are up to date with any proceedings. When we receive more information from the delisted firm, we pass this straight onto the customer, including any voting options that might be available.
'The shares will remain in the customer's portfolio online with a nil value until the delisted company comes to a final decision.'
And from Interactive Investor -
https://www.ii.co.uk/help/trading/useful-information/defunct-shares
"When a company ceases to function, its shares are delisted from the exchange they were traded on. We will notify you if any of your shares are delisted via a corporate action notification.
If the company issues share certificates because of the delisting, we will endeavour to reregister these in your name. If share certificates are not issued, or reregistration is not possible, the unlisted shares will stay on your online account."
Presumably they would be re-registered in my name as the company would not be defunct. Without a share certificate I guess it would be impossible to resell them in the future?
No word from my SIPP and fund and share account providers either. Will post anything here if I receive it. Thanks for the info Bismarck.
Some final thoughts more generally on the situation here.
I see the delisting as a sign of progress towards expanding production and significant uplift in company profitability. The very low share price was acting as an unhelpful reference point for raising further equity. A farm in from industry and possibly investment from a private equity specialist in this sector along with debt will finance initial expansion until free cashflow can finance the rest.
There is certainly dilution for existing equity holders to come but we pretty much knew this anyway. By getting rid of a public market share price that is completely disconnected from the underlying value of the asset, the dilution should be less. Rationale being that any new equity is priced on the economics of the underlying asset, which an industry investor will be well placed to assess.
So as I see it geec will drill a couple of shale gas test wells soon after delisting and if found to be economic will begin to negotiate funding for expansion of drilling across the field.
I think that we have to assume significant dilution for existing shareholders. However if we assume £300m of new equity and £200m of new debt then that should be enough new money to get to self funded growth capex. £300m of new equity issued after successfully proving commercial shale gas could be priced at 50p a share meaning 600m new shares. If we assume that the company is worth at least what is invested then £500m to £600m is a conservative value once wells are largely drilled and operational. But this gets us to £1 per share. Factor in a 50% discount for otc trade to sell and that’s 50p a share. Right now I’d take that and count myself lucky.
Of course there are lots of variables here and these assumptions are not worst case by any means - but they’re on the more conservative side.
Good to remember that this is a voluntary delisting. The company is profitable and its end markets are a structural growth situation. We’ll get diluted and we’ll have little visibility on what’s happening and it’s still going to take years to come through.
Just thoughts from me. Everyone here will have different constraints and requirements but I plan to hang on and see if some better value comes back to shareholders than what you can get in the market at the moment.
Good luck to all. It’s a very disappointing development but some reasons still for a bit of optimism.
The recent SP certainly has been completely disconnected from the asset value. Based on Stocko's numbers book value is currently 57p/share. Even with a 50% discount applied that's still significantly higher than where we have been for many months. With the planned move into shale you'd certainly expect the long term book value per share to increase, even after factoring in dilution. If the company succeeds in this then within 3 to 5 years I'd expect a divi of at least 5% of book price PS, hopefully a fair bit more.
I have my SIPP with AJB.....and as long as AJB did SIPPs.....perhaps 20 years or more!
Over the time I have been more than happy with a lot of my "delisted" shares.......some have been bankrupt and have returned zero, some have gone into liquidation and returned something....and a few have returned loads and loads through dividends, special dividends and asset sales!
Some brokers have also been chasing me to get me to sell...lol!
Overall I am quite happy.....not sure if I've made a profit or loss overall.....but I still do not let "delisting" put me off....especially when the SP bears little connection with the NAV...........I don't tend to invest more than £1,000.....and I did buy in here yesterday!
Happy to sell on a spike or hold for long term! GLA.
It's reassuring to know that you've had no issues holding your delisted shares in an AJ Bell SIPP. That's the same platform where half of mine reside.
I actually topped up with a few at 5p today which is a discount of 52p from book value.
I did ask AJ Bell what will happen to the shares in my SIPP once delisted. They have replied but they seem to think GEEC also has a "home" US listing -
"To confirm, I have contacted the relevant team and they have investigated this delisting. As this is a GDR on the LSE and it has a home listing in the US market. We are looking into switching the Sedol from this GDR to the home listing Sedol. An event for this corporate action is currently being created and will be distributed to shareholders accordingly once we have finalised how we are going to proceed with this recent corporate action news."
I'm not sure what share they can be confusing it with. No matter, I now feel confident that I can keep them there.