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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 !!
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.