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Any take a guess at why CA have increased their holding in Hurricane, if Hurricane are going to the wall? Other than averaging down and hoping to bail out on a spike, I don't get it. Answer's on a post card pleased.
Perhaps another question is why have they not been continuing since Friday, that is my confusion.
Thinking about it logically the reason why Crystal Amber would look to increase their holdings are:
1) Reducing their average below that level of a distressed T/O
2) Making a potential hostile TO of their own
3) Calling a EGM and voting for a change of the BoD
4) Because they do not believe the CPR, either due to relations with the current BoD or because of internal technical analysis
The timing of the additional purchase is significant as logically one would have awaited the suggested dilution as per the kitchen sink RNS. So the fact that they have purchase 52m+ shares now believes that there will be no imminent dilution.
However if you look at the potential reasons 1 to 3 above, then my confusion comes as to why the buying has not continued into early this week. The daily trading volume has been tiny and hence the still depressed SP. Although some solidifying of the bond prices has been noticed there has been no change to shorts. Again confusing you would have thought. Unless CA have just temporarily halted their share purchase scheme you would have thought given Reasons 1 to 3 above they would just continue whilst the sp is cheap to get as low as an average as possible before shorts closed or PIs became emboldened to repurchase.
The only reason I can think of for temporarily halting is that either:
1) They consider there average (probably circa 9p now) low enough
2) They have enough votes, potentially with a tie-up with someone else, to either vote for a TO or otherwise vote off the BoD
Best that I can work out. Stay strong!
Or they do not have any more cash available
Morganna
“ best option is to utilise both the decently increasing cashflow, and ultra low interest rates available in current global borrowing friendly environment. ”
1: exactly how do you think they could utilise the cash flow? - and still be on track to repay the debt?
2: it’s irrelevant what interest rates are if they cannot borrow anything until the current bondholders are repaid or agree to change the bond terms...
I understand your frustration. , but suggesting they do something they cannot actually do is not the answer.
CA could if they wished call an EGM and remove the Board, and put their own folks in, but they would also receive the same legal advice as the current bunch.. it’ll be hard to find directors who will knowingly ignore the legal advice, although they could change their broker nomad if they want a different answer from them.
@Notaflipper - Your summary covers my thoughts around the purchase. Brent soaring late in the day yesterday after our markets closed and holding this morning. Expecting a lot of buying today.
Still stand by the buy out from a mid tier peer - Chrysoar like I have said multiple times is my bet.
I agree with adoubleuk CA are not increasing their stake to take over the company they will want a director on the BOD and the removal of certain directors.
However, the same cant be said for Kerogen they have the know-how, the personnel, and plenty of Chinese money.
They removed their director from the BOD so there is no conflict of interest, and sent the SP into a downward spiral by announcing their 16% stake is up for sale.
There has been no evidence of Kerogen reducing their stake so it makes one wonder what they are up to.
Maybe CA intentions of increasing its stake and getting a director on the BOD is to spoil the party and make sure shareholders get
Continued.
get value for money should there be a takeout.
ohh yes CA.... the moral guardians.... bursting with sentiment .... frequent posters on mumsnet ....
Ah they maybe unkind to little old Ladies but CA have skin in the game and a lot of it.
RNS Translator
Based on your analysis and conclusions why would CA purchase additional shares ? If the company options are so limited and handcuffed by bond holders why should they take the financial risk ?
RNS Translator
Based on your analysis and conclusions why would CA purchase additional shares ? If the company options are so limited and handcuffed by bond holders why should they take the financial risk ?a
Looks like we are finally making the last call at these depressed levels. I have topped up yet again. I want a seat on the board at this rate.
"Based on your analysis and conclusions why would CA purchase additional shares ? If the company options are so limited and handcuffed by bond holders why should they take the financial risk ?"
Its a fair question and without full sight of the bondholder agreement, which I presume CA haven't had, one can really only speculate what their real intentions are.
1: They already had the ability to call and EGM and propose removal of the board - so probably not that.
2: As an activist fund, they have to be seen to be active otherwise their credibility is questioned by their investors,
- over 10% and they have the ability to effectively make a takeover difficult by being able to keep their shares from becoming acquired by a bidder
- over 25% they can block special resolutions, thats the key level to cause grief.
What else can they do to look like they're doing something rather than sitting on the sidelines complaining, buy more shares to show "you mean business" and indirectly support the market price.
3: They actually believe that there is a deeper contact and that the Board and recent CPR is simply wrong.
4: There was block of shares overhanging the market and they took them out to protect the price.
5: There may be a holding level which gives them the right to a seat on the board, often this is 15 or 20%, this would make them privy to whats going on and access to the agreements and advice, although they will become insiders and unable to trade, will be able to make better decisions about the approach to take, rather than currently being blind to the facts (they know nothing more than the shareholders or they wouldn't be able to buy shares)
My guess is 5 perhaps with a bit of 2.
It seems clear to me though that they would want to play hardball with the bondholders as they (Bondholders) have the ability to wipe out shareholders (hence the explicit and repeated warnings).
Trouble is, as a listed entity the Board having damaged their reputations will be keen not to dig a further hole for themselves by taking action that precipitates a total shareholder wipe out.
At the moment their only chance to redeem any value for shareholders is to get rid of the bondholders, take stock and raise cash to drill another well (the CPR spells out the reserves that such a programme might deliver) that means not precipitating anything that gives the Bondholders the right or excuse to step in and demand payment before they can.
If they went off and started drilling a new well, then the clear risks are that they're unable to pay the bondholders next year as theres not enough cashflow to do that having spent much of it drilling (putting aside the loss of revenue while drilling). It may well be successful but unless they can guarantee to have enough cash to repay, hold funds for decom and have an auditable going concern clearance the bondholders will just step in and take the lot.. wiping out the shareholders.
Bond payment is due in 14 months ( June 2022)
Cash in bank roughly 100 million pounds
Current rev 200 million a year
So what makes you think their is a problem paying the bond or refinancing obviously Crystal amber have the same feeling or no something we don’t hence why they bought 40 million shares last Friday
Awaiting further updates on holdings
Hey fromage..
Your aboot $50 million short with your cash in bank ..
but who’s counting ...
I’m talking pounds not dollars
100 million pounds not dollars
Enough to clear all outstanding bonds at present
Today if needed
RNS Translator
Thanks for such a considered reply. Lots to think about.
“ Crystal Amber Fund Ltd (CRS) is an AIM-listed activist fund investing predominantly in small and mid-cap UK equities where it identifies opportunities to enhance long-term shareholder value through active engagement with companies. The Fund was founded in 2008, with Richard Bernstein as Investment Adviser. ”
Obviously CA saw long term value in HUR to buy millions of shares by increasing its holdings by 25%...and I trust their investments strategy rather than listening to the drivels posted here by a few clueless posters...
Get a grip guys
HUR Risk/Rewards has improved dramatically with CA solid support...
GL holders
Spot on - and in CA's own words as per their web site.
The Fund finds the conclusions of the technical committee persuasive but not conclusive. Fractured reservoirs commonly exhibit rapid initial pressure decline and we note at Lancaster that the rate of pressure decline has in fact slowed. Moreover, the zone now believed to contain residual oil below the oil water contact is very thick, whereas we would have expected an abrupt change in oil saturation at the free water level. Therefore, the Fund believes that significant volumes of oil may be present below the revised oil water contact at 1,330 metres.
Following the publication of the report the shares are trading at little more than option money and the Fund has increased its holding. Despite these uncertainties, the company has stressed there are currently no going concern issues and it has ruled out an equity raise at this time.
Since investing in Hurricane, the Fund has realised profits of £43 million.
"and I trust their investments strategy rather than listening to the drivels posted here by a few clueless posters...
Get a grip guys
HUR Risk/Rewards has improved dramatically with CA solid support..."
Sure thing. So what's your gain % like here?
Pretty sure that a further CA holdings RNS will drop soon, along with a revenue statement from Hur.
Bond repurchase programme could well be announced, albeit sticking to the takeout option here.
The significant CA big buys recently meant they don’t agree with bod cpr or their future assessments and plans for the company...obviously CA sees it very differently and confident of HUR long term value.
A coup in the bod is imminent and revamping of the outstanding issues and future plans must be coming...and all this must be a very positive developments to come..
What’s better than now with so much undervalued SP....to take advantage of..
Ignore the trolls and internet worriers which have no holding here ...
As always dyor
Holding strong here
GL
Wouldn’t be surprised to see a T/O by Harbour Energy since Hur have begun vessel sharing with Solan, could there be more going on behind the scenes?
The way Brent prices are going along with H2 onwards outlook, I wouldn’t be surprised at all if HUR ends up having more than one determined bidder this year, and IMO, any successful offer here will have to be in double figures as minimum, DYOR.