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Anyone would think that they needed the price to be in the right place to close the fund raise with the appearance of success, despite most of the stock being left with the underwriters...
an 18% increase in the price of GLIF
What is something you don't see every day?
..
Looks like the answer was a firm no, another refinancing, no doubt more promises of jam tomorrow...
One assumes enough is being made to pay off /satisfy the bonds due to enable dividends very,very soon.
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I can't see how the bond gets refinanced, unless all holders agree to kick the can down the road, but that shouldn't be a cue to start paying dividends, given that the funds just aren't there to repaying the company's debts.
Soon would be nice.
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We fully intend to recommence the dividend program but only at such time as the Company is in a strong enough position to make such payments. We are mindful of the Bond repayment in June 2021 and no dividend would be paid before this Bond is successfully refinanced or repaid.
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Good week or two ahead.
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They are meant to be bought back. Or rolled over. Until bought back as is s being done..gl
With no realistic way of refinancing the Zero Dividend Preference Shares and with the likelihood of bad debts building in the portfolio with everything that is going on in the world, this business must be technically insolvent.
Actual spread is 2.71 to 2.74
50% Spread is too much to buy or sell GLIF.
Company becomes principal funder of a range of early stage companies, company ceases to fund said businesses following a change in management, but refuses to sell positions regarding bids as too low, platforms one by one go out of business.
Today's profit warning should not come as a surprise; the core problem for GLI is its cost of capital. Having destroyed its share price and investor base with it over the past three and a half years, the cost of equity is now way too high to contemplate providing support for its invested companies from its own resources and thus one by one they fail.
The "growth" side of the business is the lending of monies at a similar rate that the company borrows, increasing debt in the business, and thus risk, with a return way below its weighted cost of capital (see above comment on the equity).
Net result is a downward spiral of value destruction, whilst the management strives to recognise "profit", regardless of whether the return is in excess of the cost of capital (thus actually delivering value to shareholders) or below the cost of capital (and thus destructive to shareholder value).
Avoid like the plague.
Todays announcement, at 16.52 on a Friday afternoon (timing of which tells you the news is unlikely to be shareholder friendly) removes any remaining chance that management's remuneration will ever be reined in.
Firstly, after a sizeable shareholder revolt (27% of free float voted against the remuneration report) the Board has introduced what, on the face of it looks like investor protection - they will only pay bonuses based on "profits" in future. Two problems with this:
1) The statement admits, de facto, that the Board has destroyed shareholder value by allowing the management to pillage the business for years, but is not seeking any repayment, despite the fact that they have ample grounds to do so; and
2) There is no definition of "profit" in the announcement. Certainly management will not expect to be paid against statutory profit (unless they engineer upward valuations of investments) and will instead come up with convoluted adjusted profit numbers to justify future bonuses that will be beyond criticism since they are based on "profits".
The second huge problem in the announcement is that the largest shareholder, Somerston, now has a representative on the Board. He is unable, as he is only one vote on the Board, to exert the same degree of influence as he could as a shareholder, given his 26.6% stake. He will also be bound by Board decisions and cannot dissent in any way whilst on the Board. In other words, the management just neutered the only voice who could possibly bring the situation under control.
It's a shocking mess and management have played their hand brilliantly. They are now free to continue to reward themselves the remaining value of the business, whilst the shares continue to plummet and there is nothing anyone can do about the situation.
How Liberum, as Nomad, can continue to sit by and watch such wanton distraction of shareholder value and utter disregard for corporate governance is extraordinary. That they did not insist on a definition of "profits" in the announcement would suggest that they are failing in their duties under the AIM rules.
As predicted, huge bonuses despite continuing to destroy shareholder value. Really does beggar belief.
http://www.p2pfinancenews.co.uk/2019/04/17/gli-bosses-received-over-750k-in-bonuses-despite-2018-loss/
Judging by today's announcement of "share purchases", it looks like its bonus time at GLI again.
The share price shown for the "purchases" is substantially above what the shares were trading at today, post the horrific profits warning, and thus the only explanation can be an off-market transaction, and traditionally the management seem to pay themselves annual bonuses half in shares and half in cash.
So, after once again destroying huge amounts of shareholder value, the management are paid bonuses whilst the share price continues to plummet.
I assume that the management strategy is to run the company into the ground until the zero dividend preference shares are up for redemption in December and then offer to buy Sancus out for next to nothing. With no other offers on the table, the Board will have to accept and it will be game over.
Spotted the RNS feed for GLIF. I used to hold GLIF back in the day of 50p+ share price and dividends too. When the new board came onboard, it was noticeable, how quickly things plummeted despite they words of confidence being spouted........Although I sold out at a loss, I am so glad I no longer hold GLIF, as it reads as if things have become extremely dire since.
Once again the company is making an announcement about The Credit Junction, way after the investee company put out a press release. Last time the GLI Finance announcement was five days after The Credit Junction release, this time the GLI Finance announcement is six days after The Credit Junction issued a press release https://www.thecreditjunction.com/century
My previous comments still apply
- Suggests the company is not on top of what is going on within their investee companies, and/or there are poor relations between the two and is not coordination.
- Parroting press release almost a week after announcement seems a bit desperate.
- Any announcement must be made by an AIM-quoted company without delay. It's in the AIM rules. Therefore there are two possible conclusions:
- The announcement is not material, in which case why issue a full RNS?
- The announcement is material, in which case delay is a breach of the AIM rules.
- In either case the NOMAD has some explaining to do.
Five days after The Credit Junction announced a new credit facility (https://www.thecreditjunction.com/midcap), GLI Finance puts out an RNS announcement to try to talk up the significance of the announcement. This suggests firstly that they are desperate for anything that resembles good news (this is hardly material to their business as a whole) and secondly that, despite their seat on the Board of The Credit Junction, they were not up to speed with what was going on, or would have put out an announcement in conjunction with their investee company if it was really important. Something a week old hardly deserves an RNS announcement - very surprised the Nomad signed off on this type of sad attempt at talking up the stock. All in all demonstrates very poor corporate governance, which pretty much sums up the sad situation shareholders are burdened with.
The company seems to be turning its back on trying to move expensive debt off balance sheet, bringing it back on with a whopping �50m facility. Having spent the previous year divesting itself of on-balance sheet lending it's back in the business. No interest rate given for the facility, so assumption must be that it is at least as expensive as previous off-balance sheet funding, thus no better return to equity holders but more risk.
...shambles
2.22m shares of the 2.87m shares were not purchases - they were bonuses(!), presumably for the excellent performance of the company's shares over the past year, paid in shares at the current deflated price (due to the excellent job of the management). The only actual purchase was the 650,000 shares bought by Aaron le Cornu at 8.25p, an investment of just over �50k. Given that bonuses in this company have historically been paid partly in stock and partly in cash, it may well be he reinvested part of his cash bonus. Certainly it looks slightly as if it was not an arms length transaction, as the "Place of the transactions" is shown as "Outside a trading venue". As always, there is no explanation offered by the company and the only thing that is certain is that the Directors have taken a little more money out of other shareholders' pockets. Plus ca change with this one.
Have bought over �300k in Dec and Jan probably that might be why?