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Droderick,
Two fantastic silver bullet posts if I may sir, hats off to you.
I did note the 1.45M but didn't do the maths, doh, well I am still at work and it was a busy day, but well spotted.
Again I make the point that in over 20years of investing in particular on AIM I have never known a £5 mill company raise £6M in a flash!!! (or the like) as I said earlier I thought this may have failed but I also said that JW must have had a very good idea of the success rate.
Chairman, point taken, could it now be someone with the type of experience required to run the H & W project??
My main gripe aside from the dilution, is the EU funds all £1.6M quid of it, I think this should now be expedited by the British Government (if we had one!!) to enforce the EU to pay the money pronto, I mean it's a piddling amount in the great scheme of things, but essential that Infa has it and has it now.
By the way once H & W is up and running and hopefully we have contracts on the table then I see no reason for the sp not to rally sharply, yes 3.5B shares now in issue, hopefully though the 2B issued for H & W if institutionally owned will be held tightly, think of it like this, 2B shares in respect of H & W and 1.5B in respect of the other ongoing projects as before!!! this could easily be a 50/100M company in no time at all? Interesting times.
Mr T
.......I have to say that the prize for the very best and most educative and informative posts go to you Drodders ...( and a bit to Spud !) 84 and still rising after a truly momentous day.84 is the amount of posts today not Spud's age by the way.
I have been here over 10 years .I am not an expert at all but I really became excited when Stephen P took the reins and introduced JW &Co.Even more when finally Vitol were introduced as a World Class partner for the project,even more when we were given a bite at Barrow.
And then H&W .Drodders, your summary is spot on.To fill the book today in less than 4 hours for a teeny weeny Aim set up is ***** unbelievable.I just wonder if it has been done before in such manner? OK .JW and AR may have good contacts in the City but we do owe them ( and JT over there somewhwere) 110% support now for today and 29th Novemember and for not "screwing" the tiddler from re-birth; Calmer tomorrow !!
Dear Setanta,
The equity and debt for Islandmagee is coming at the project level. Why would an incoming equity investor at the project level get to decide who becomes Chairman at the PLC level when such investor has nothing to do with the overall business of InfraStrata? More importantly, why would our BoD accept the investor's chairman when all that the investor should be concerned with is Islandmagee?
Regarding Vitol, I have heard this time and again from you and others that they should either put some monies in or have the chair to "show commitment". I don't quite understand this logic. They are a client. They are going to lease capacity for 12 years. They are due to sign a 12 year binding contract. What more do we expect from them and why should we expect anything more?
This is like renting a car but the showroom owner expecting you to not only pay the rent but also the cost of showroom refurbishment and join that business' management team.
That sound illogical really.
No worries mate. I’ve been hit harder. Appreciate your comment.
And Set 1. I don’t like to take sides but in the context of others disagreeing ( perfectly acceptable) I still agree with your comments on business prudence re. Islandmagee. After all this time.....still a concept in motion. Happy to be wrong but I agree they should’ve stuck to one ventire to completion and promises are delayed and extended. Again and again. But like I said before I head off home...we’ve got to roll with it. My well- known sister share has also bled me quite dry. Horrendously so. More than in the ring it feels actually. All time low since refinancing. JFK is well-aware!! Gas........and oil :-( Sigh.....
Thanks, both, for your posts.
I understood that the second tranche of the Riverfort finance was non convertible but it is still more debt and,spud, I was being a little mischievous in omitting the "maybe equity" bit to the funding declaration.
Droderick, well spotted the reduced consideration. Neither had I noticed that. Reference the delay in appointing a Chairman,I think most investors here believe that that person will, effectively, be nominated by the Islandmagee debt or equity provider, or by Vitol, and the appointment will be seen as presage of their uniquivocal commitment to the project. So far nobody has an unrevocable commitment to the project which, in my view, has made the SP vulnerable. And how!
Thanks again for your excellent inputs. Go well.
by some quality analyses here. Doesn’t matter if some of it conflicts.Some really good things wrotten by Set1/DRod ( ders) :-) Spud st al.
We can disagree but still talk quality !!
I remember Adrian P asserting the proof being in the pudding. Couple of you were here then!! That’s the answer again.
Disagreeing respectfully is at the core of any decent debate. So is getting pi** ed off and being irrational sometimes’cos we’re human. I’ve got nothing to add to what’s been said except we gotta roll with it whether we approve or not. And respect for decent informative and supportive posts like this eve. ! Mostly :-)
Just been to my first boxing session for 3 months. I’m collapsed in my car. Some things can be more painful than the stock market thank Go*. Then again........
Droderick, the cheaper acquisition cost was missed by most (including me!)
I'm assuming the deal was renegotiated and infa agreed to fund the overheads bill
Only institutions have the capability of putting in £6MM on a £5MM company. That itself shows the confidence that institutions have in the overall strategy.
Other comments:
I think it is myopic for shareholders to expect that this company will live and die with the gas storage project. The team has not taken its eyes of that ball and Harland will actually help reduce project capex. In the interim, if this multi-purpose fabrication facility can attract other businesses and generate much needed revenues, how exactly is that a bad thing? Do we, as shareholders, want to live and die with one project or be participants in a vibrant company that has multiple assets and multiple revenue streams in its portfolio? I think the answer is self evident.
A lot has been made of a lack of a Chairman. Yes it is important from a corporate governance perspective. But if anyone thinks that a chairman is the silver bullet that will solve all of Infa's woes, then that thinking is misplaced. A chairman can open some doors and have a certain degree of positive influence. But ultimately if the overall business model does not stack up, even the most dynamic chairman will be toothless. So let us not be under any illusions here. This company needs a new chairman undoubtedly but a certain degree of pragmatism is also necessary.
Any new bodies in the team comes with additional costs. I find it bizarre that we demand more members in the team and also crib about overheads. We cant have it both ways. There is a fine balance to be struck here. I personally think our team is very thin on the ground and I don't particularly think they relish that situation. But cash conservation is crucial. If you look at the two fund raises done earlier totalling £1.90MM, they have gone for very specific purposes - land acquisitions, completion of marine surveys etc. Where has there been any extra monies to hire additional people and pay the existing team fancy salaries? Lets give some credit where credit is due. On a shoestring budget, this team has taken us to touching distance of FID and got Harland under OUR belts. And yet we slate them? I don't think that is fair at all.
In my final analysis, this massive dilution is painful, for me, for everyone and even for JW who will be reduced to less than TR1 status. But there is a strong undercurrent of optimism - the chance for the first time in this company's history to become revenue generating, to be cash positive and to see some cash returned to shareholders, notwithstanding the inevitable rise in the share price when things get going at Harland.
The management team and the business strategy that they have adopted have my 100% vote of confidence.
It has indeed been a very hectic and interesting day for all of us. After having analysed the opening RNS and then the closing RNS, these are my thoughts. I would also like to say a few things on other comments that have arisen in the course of these healthy discussions.
Consideration for the acquisition:
The total consideration payable is £5.25MM. The original consideration announced on 1st October was £6MM. That is a clear saving of £750k. That equates to atleast one and half months' worth of overheads - December and half of January based on the £500k that the company will pay for November. I believe this is down to some pretty hard fought negotiations and it is an excellent result. The balance consideration payable in April is now down from £2.20MM to £1.45MM. That straight away reduces the cash exposure further down the road. That itself is an excellent result.
Riverfort:
The second tranche is a mezzanine debt facility and is not convertible. The first tranche will be repaid or restructured post completion. Clearly, management is conscious of the dilutive effect that Riverfort has and are taking steps to mitigate it. On a more holistic note, I do hope all of us understand the stresses the management in raising monies for a company that has generated ZERO revenues in its entire existence. There are very limited options. No bank is going to provide debt, not even an overdraft. This team has been working on a shoestring since they came in. Whilst everyone discusses the demerits of a Riverfort facility, can anyone think, for a moment, that the team has actually been able to raise some more monies for a very specific purpose? Riverfort are not a charity and they are exposed to enormous risks. Yes, they will take their pound of flesh but it is worth remembering that we would not have got Harland had it not been for the Riverfort deal to start with. So while we can all complain about it, we will not be where we are without that facility. And I think where we are is a pretty good place to be in.
The Raise:
A total of £6MM has been raised before expenses. This should provide for the initial consideration plus some runway for the working capital. The closing RNS talks about debt discussions ongoing and coming to fruition around completion. That is a perfectly reasonable assessment of where things are likely to land. The raise has been conducted at 0.30p which is pretty close to market. There are ZERO warrants attached to the raise which makes this even better. Of course it has a massive dilutory impact but we need to understand the huge revenue generation potential this carries. The fact that the book build opened in the morning and closed by lunchtime is a fantastic achievement. The placing is conditional upon GM approval and once that is done, the identities of the new institutional investors will be automatically divulged once new TR1 announcements are made. So any criticisms on that front is rather unfounded.
Thanks for your thoughts Setanta and as we've come to expect from you a well written, balanced post.
Only time will tell if this very large dilution at a very poor price will be worth it.
A couple of points, the purchase of H&W, we were told was to be funded by debt & maybe equity "The Company is in advanced negotiations with a number of lenders to provide a long-term debt facility to provide the balance of the £5.5 million consideration, and equity will be considered also"
I don't think any of us expected quite so much equity!
From today's 2nd rns
"The Company remains on track to complete its debt capital raise to complement this equity raise. Debt capital will take the form of asset backed finance and working capital trade finance, both of which we expect to come to fruition soon after completion of the acquisition."
Also the 500k 2nd Riverfort drawdown is NON CONVERTIBLE (unless the company defaults in the future)
From today's 1st rns
"The Company will draw down the second tranche of the debt facility provided by YA II PN Ltd and Riverfort Global Opportunities PCC Limited ("Lenders") under the Bridge Loan for a sum of £500,000 (after costs and initial interest payment) in order to pay for the overheads of Harland and Wolff for the month of November 2019. This tranche of the debt facility is non-convertible and carries a fixed interest amount of £40,000, half of which is deducted from the advance of the loan with the balance repaid on the first repayment date. The loan will enjoy an initial three-month debt repayment holiday and will be repayable thereafter in three equal monthly tranches on the first day of each month starting in March 2020. The Lenders will only have the right to convert this tranche of the loan in the event of a default by the Company in repaying the loan on the dates mentioned above"
Excellent report on today's H & W update, keeping us front and centre! How many other AIM companies are getting this attention?
Yes quite right ...I'm sorry I bit at CRL (a fine fellow).
regarding your remark....'I will be amazed if there is no slippage in the FID. Such an eventuality wouldn't sit well with investors.'
IMO It's a certainty that the FID is now delayed........it's impossible for the ML to now be advertised and the 42 day period allowing for objections/representations to defra and then Daefra to consider them. If it was advertised tomorrow (unlikely) that would take the close of the objections to the end of day on Christmas eve.......it would take a miracle for DAERA to consider the objections/representations in the three days 27th of December + 30th 31st December.
Not exactly impossible, but highly improbable that FID will now be taken before year end.
There are those that will say...but they can put caveats in the FID that rely on ML being issued.....but why would they prat about like that when they only have to wait a little while to do it properly without needless controversy and gifting the objectors a clear shot at goal.
Thanks to the several of you who responded to my previous post. I repeat that I think the H& W acquisition was unnecessary and foolish, although I hope I am wrong on the latter point.INFA doesn't need a shipyard. We had perfectly good ,experienced, and reliable contractors available for the construction of the gas caverns.
Mr. T I understand and respect your point of view. I was not at all surprised at the speed of the bookbuild. The placing had clearly been agreed at least a week ago and that after JW had told us that the balance of the (H&W) purchase price would be funded by "a long term debt facility." Where did that aspiration go? The Riverfort loan was derided by shareholders as something akin to banditry. Yet we are taking more of that too.
As we can already see from the non working cost of £.5m a month to finance the running of the shipyard it will be both expensive and time consuming and, INFA did not need it. Vanity thy name is JW!
I will be amazed if there is no slippage in the FID. Such an eventuality wouldn't sit well with investors.
And Snowman, much as I enjoy your posts I was sorry to see you castigate,(or try to), crl123. He wears his heart on his sleeve. Appreciate that. And by the way" the bloke" ,(JW), hasn't just made him into a millionaire, and he probably never will.
Just one final item. I was decidedly underwhelmed by the participation of Arun in the placing. A few million shares. And He's the Finance Director. Speaks volumes for his confidence!
Go well all.
4m a buy, I bought at just below .32 similar time
I guess it will be all change in the 3% owners’ club, it will be interesting to see who?
At 0.32 was a buy. 0.31 to sell at 4.29.
I did dummy trades.
I see value in all sides here. I err on the side of Set 1 in that I entered a simple company 3 yrs ago and feel it is rather gung ho at our expense. We all have our own views which I acknowledge. I am fed up with losing money ( caveat emptor of course) and can be cranky and bite back.
( my comment on JW...really about the corrupt City and probably unfair of me as Placings are the norm). I guess I’m just sick of Placings and dilution and hate shareholders being easy meat. Which we are.
the 4m - anyone know if it was a buy or sell ?
I've reread my post and can't see anything personally abusive there.......but if you feel offended....then I apologise.
I do get emotional...it's true.......I'm bipolar.
But if anyone wants to criticise any of my posts please feel free....I'm old and ugly enough to take it on the chin.
After the 2nd RNS added 800k, there has got to be something very compelling for JW to have succeeded got this placed. Correct me if I’m wrong but none of those nasty warrants attached.
I am an old hand at this game. 35 yrs in the stock market which has changed beyond recognition. And I still get things wrong of course. So does Mr. Buffet. I have a strong sense of right and wrong. Morality.
That’s all.
I never criticise your posts ...which are often emotive and forthright. You have a right to be so.
As do I.
A good chat board is depersonalised and supportive Disagreement is normal. I am peeved at what happened on Friday and feel it was a sign of the immoral side of the City and ( toothless FCA or not)...it’s plain and simply wrong.
......'Shameful of Infa for the 4th time. I did mention it gave signals of a Placing on Friday but shameful nevertheless Mr. Wood. But I expect your sleep will not be disturbed....'....
with all respect........Jesus H Christ CRL,,,,what do you want?.....the bloke has just made you into a millionaire!...........smell the coffee!!
Communication to SH has been poor agreed and I also am not overly joyed but what has been achieved could be the turning point, For a £5m macap company to raise £6m in hours is impressive, and it would not have been raised if the purchasers did not have faith (and to be fair that is their day job- not us pI's- so they know what they are investing in) if anything it should be a MAJOR buy signal to investors. I understand some peoples glasses are half empty probably due to the trend of the SP but when something comes along that can transform the SP it should be embrased not slated. AIMHO
Hi Setanta,
I completely understand the pessimism, and you are correct only 500% to go to get the sp back to those dizzy heights.
However look on the brightside, Infa a company valued today at barely £5M has raised £6M on the market and attracted some II's, I don't think in 20 years of investing I can remember an achievement such as this. I fully expected the bookbuild to fall short, and may have had to be cancelled altogether, I was wrong and I was amazed at how quickly we raised the £6M.
For me this would indicate the selling of this to the market must have had some hard numbers attached to it, why else the fast completion, it is not as if the placees could sell their shares back into the market for an instant profit as the sp was already at the placing price. You as well as I know how these usually work, the sp is .050 the RNS is announced, placing at .030? then you can be sure the shares will be disposed of rapidly for a quick buck, result, larghe fall in the sp.
I will now await the completion of this placing and the acquisition to be completed, then we can start looking at forward costs offset against incoming contracts, as I said before, there must be many and not just the IM project, why else would II's stick in £6M, certainly not based on the IM project alone funding H & W. Risks, costs, I agree, but I'm prepared to give JW the benefit of the doubt here for the next few months at least, I'm very interested where this could lead to! contract announcements also will be very telling?
Mr T
That is precisely my point. The daytime leaks. Shame on the broker or Infa. Or instis who may have buddies. City is corrupt. I knew that. I also knew FCA is a wet rag. They need videocam of a Securicor van being raided by a bank executive to ever do anything. Pathetic organisation which allows corruption.
But shame on John Wood for letting it happen repeatedly. Is this a lifestyle company again? I am told today low wages. Low esteem for shareholders too . On a 70% loss now after the previous Placing.
Their business plan is gung ho at our expense again. I agree with Setanta. Should have focussed in core project. What next?? Pipeline under Irish Sea.?
We will sit at 30/31 or lower for extended period as shareholders flip as do new buyers. Never-Ending Story.
but i do. There's a lot of excitement because INFA has raied £6m,(before expenses. How much?), but inter alia our BOD has agreed to pay the maintenance costs of Harland and Wolff up to 5 December ,(£500k), although we are not yet the owners. And if the deal is not completed before the beginning of January we will pay another £500K. So taking all those costs into account we will be lucky to have £4.5m available from the placing. 25% spent for nothing!
We should be excited. We now have Institutional shareholders. But we haven't been told who they are!
Contracts for our soon to be shipyard? Well let's wait and see! Shipbuilding as has been suggested by some here? I double doubt it! Savings on our other upcoming projects? Well we'll see in due time and that's assuming that those projects come to fruition
Look, I know that there are positives being suggested by this acquisition but there are enormous risks and cost attached. Still it's not so bad. The SP only has to rise 500% to be where it was in January. Now that IS a verifiable fact!