Firering Strategic Minerals: From explorer to producer. Watch the video here.
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From what I gather the Board have not proposed a rights issue because they would be significantly diluted unless they could cough up a lot of the cash themselves. With the exception of MC I don't think the Board or their relatives are in a position to pledge that kind of money to retain their current positions. Instead ELB will continue on with AVG as a non-exec I believe if the deal succeeds. How to gather enough votes and engage enough people invested here that this deal is bad for them? Without knowing address or telephone numbers of smaller pi's we only have the chat sites and social media. Possibly a share magazine could sponsor an article on such a move but we would likely need to pay a fee for that and hope the writers are not AVG shareholders. The cash on hand was less than I expected but the results have a few glimmers of hope. We had £1.2m cash end of March and net assets improved since the half year point. We are more than 3 months into the new year and it might be useful for all if we had an update soon rather than leaving it until October when they will announce an Interim trading update. I do expect the cash position to have risen but we are in the dark until the company inform us. Or if the deal fails and a refinancing takes place, HAYT may then inform holders that they have paid a sum of cash to the bank - this would suggest cash on hand has increased substantially as they would not otherwise be in a position to reduce their cash (vital for the companies day to day business). All those trade receivables mounting up, expect some of those are being dealt with in the first half. Also the fact the order book is at a record £49m suggests we are in a good position to turn much of that into cash short term. A refinancing of debt would have solved this and still can if the company can prove they are actually turning a net profit now. If things are tight and despite cash on hand rising it doesn't enable the company to repay the short term borrowings, I would favour a rights issue to reduce the debt and provide the company enough room to trade it's way out of danger. We still need favourable refinancing terms though. GL
Hi Shareminator On the cash issue, you may be right about the need for recapitalisation and directors resisting dilution, but I’ve always seen it more positively, and think revenues and settled debt/overdraft facilities are achievable and will suffice, and enable continuation of the dividend even. The difference in monthly payments between servicing £22m of debt and a more conservative pile cannot be more than a few £10ks. That is entirely manageable, surely, until revenues pick up, which they should be doing by now anyway. But I agree it’s becoming more difficult to form a view, the longer this radio silence goes on. I’m not sure how many PIs there are but I think everyone posting on this BB is voting against the deal. That might represent the general view. Hopefully other PIs are informed and perhaps read the BBs even they don’t post. There seems to be little or no commentary on the deal out there in the press, for sure. It would be good to see some. Richard Sneller’s direct phone number is on his disclosure forms. He owns 6%+. He’s maybe a nominee/trustee for a third party (he’s a fund manager by profession), but what’s his view I wonder? I’m still hopeful the deal will be kicked into touch. It really makes no sense, unless the debt burden cannot be refinanced on reasonable terms imo. That question is price sensitive info, and as we are being told that RBS is supportive and we have not heard refinancing is impossible (we’d know by now if it was imo), I would assume we can refinance, and the only reason for delay is heel dragging by the BoD pending the vote on merger. On balance the other business pointers are also clearly positive. The nuclear sector is rightly becoming very significant, and the opportunities there are vast. China and India alone represent a huge burgeoning market, even if one were to take Japan USA Korea and Europe out of the equation. The BoD seem to have donned their tin hats and retreated to their bunker, presumably to tough it out till the vote. But the deal might fall through, HAYT is still a business, and they should come out and deliver on their ongoing duties to shareholders and stakeholders in the meantime. They’re surely legally bound do this despite a pending merger, and even if they’re pulling in different directions on the deal, or not wanting to be diluted etc. They should get on with the refinancing and/or other fund-raising, keep the order and other news coming, and agree and announce the dividend policy. I think they’re playing a bit fast and loose atm tbh imo. Regards