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Just waiting
All is a bit speculative until we find more info out. Do how think all in around 2p will do well
If they Acquire the bank for 50 million what will that do to the share price ? How much is that likely to push the price upto and would all the current buisness in loans the bank has be added
From Bloomberg today:
https://www.bnnbloomberg.ca/uk-town-yanks-money-from-hedge-fund-burned-by-junk-bond-bets-1.1984261
"Warrington’s finances have long drawn additional scrutiny. Auditors at Grant Thornton only signed off on the council’s accounts for the twelve months ending March 31, 2018 earlier this year. Part of the reason for the delay, according to an audit report reviewed by Bloomberg, was Warrington’s ties to another entity led by Altana founder Lee Robinson.
Robinson, who launched Altana in 2011, achieved financial fame after working for Paul Tudor Jones and correctly timing his short bets on the crash of the US housing market in 2008. The 54-year-old didn’t respond to emails seeking comment.
Warrington has also been a longtime investor in the startup Redwood Bank, where Robinson is a director of its holding company, Redwood Financial Partners Ltd. Auditors at Grant Thornton said the Redwood investment is, in part, what prevented them from signing off on the 2018 accounts until earlier this year.
The audit “has been extremely challenging and protracted for both the council’s finance team and Grant Thornton,” the auditors said in their report. “There were a significant number of issues which have taken a long time to resolve including consideration of a formal objection relating to the council’s investment in Redwood Bank as well as complex accounting transactions relating to the investments in Redwood Bank.”
Warrington spent £32 million for a 33% stake in the bank in 2017. The town has since slashed the value of the holding. This month, R8 Capital Investments Plc said it’s planning to acquire Redwood in a deal that values the bank at roughly £50 million, according to a statement.
“It was a fundamental error of judgment for WBC to become involved with financing a new start-up bank,” Warrington councillor Ken Critchley said in a statement on Tuesday.
The Warrington Council spokesman said Redwood Bank was lending to businesses and stimulating economic growth despite a depressed banking market. A spokeswoman for Redwood declined to comment."
"It is also likely that the Council will have to have the bank revalued again (as at 31 March 2023) when the 2022/23 accounts are finally audited, to ensure any post balance sheet effects are reported."
Would take that with a pinch of salt
Challenger bank having increased profit year on year since conception. Nearly 0.5 billion loan book...
What's interesting is that Warrington Council value the whole business at less than £20m but it is being sold for at least £50m. I'm sure the council didn't pick their valuation out of thin air and was value professionally no doubt by an auditor at one of the big accountancy firms.
This does not look good for a dilution and then rebound in my opinion.
Would just like more info / news for us to get our heads into
Good info! Thank you
Extract from a report presented at Warrington Council's Cabinet committee meeting on 11 September:
REDWOOD BANK
8.1 As highlighted throughout the Treasury Report Outturn Report, 2022 has been a tough year for many parts of the economy. The large movements in interest rates have had an impact on many of the Council’s investments and subsidiaries, and Redwood is clearly impacted by these changes.
8.2 The Council has reported a reduced current value of our shareholding, down to £6.7m, as part of our published draft accounts. Whilst this could be seen as a difficulty for the bank, it is actually more of an indicator of the values of all banking shares at the time of the valuation work. The depressed valuation coincided with the collapse of Credit Suisse, and worries in the market of a ripple effect for other banks in assessing bank values. It is also likely that the Council will have to have the bank revalued again (as at 31 March 2023) when the 2022/23 accounts are finally audited, to ensure any post balance sheet effects are reported.
8.3 In terms of Redwood’s actual performance, 2022 was another good year. The bank yet again made a profit: Profit Before Tax 2022 is £2.3m (2021 was £2.2m); Operating Profit (before impairment) 2022 is £4.8m (2021 was £2.2m). The Warrington branch of the bank has now loaned over £170m to SMEs, on the back of the Council’s total £32m investment.
Full report is here (need to scroll to p.170):
cmis.warrington.gov.uk/cmis5/Document.ashx?czJKcaeAi5tUFL1DTL2UE4zNRBcoShgo=C1d5k1bnwlqDMT%2fUncA7i5fZuzuFnasXJwJFsz0b0VByBCWm072bNA%3d%3d&rUzwRPf%2bZ3zd4E7Ikn8Lyw%3d%3d=pwRE6AGJFLDNlh225F5QMaQWCtPHwdhUfCZ%2fLUQzgA2uL5jNRG4jdQ%3d%3d&mCTIbCubSFfXsDGW9IXnlg%3d%3d=hFflUdN3100%3d&kCx1AnS9%2fpWZQ40DXFvdEw%3d%3d=hFflUdN3100%3d&uJovDxwdjMPoYv%2bAJvYtyA%3d%3d=ctNJFf55vVA%3d&FgPlIEJYlotS%2bYGoBi5olA%3d%3d=NHdURQburHA%3d&d9Qjj0ag1Pd993jsyOJqFvmyB7X0CSQK=ctNJFf55vVA%3d&WGewmoAfeNR9xqBux0r1Q8Za60lavYmz=ctNJFf55vVA%3d&WGewmoAfeNQ16B2MHuCpMRKZMwaG1PaO=ctNJFf55vVA%3d
Posted on Facebook yesterday by Cllr Ken Critchley:
https://www.facebook.com/AppletonStrettonHattonHigherWalton
See below a latest Conservative Group press release dealing with the potential float on the stock exchange of Redwood Bank.
“Press Release
Following WBC’s investment of £32M in Redwood Bank over recent years, Warrington Conservative Councillors are closely monitoring news of a proposed listing of the bank on the London Stock Exchange via the mechanism of a reverse takeover. They note the announcement made on 2 October from R8 Capital Investments plc stating that the company has signed a "Heads of Terms" with Redwood Financial Partners Limited, setting out the key terms for a proposed acquisition.
Conservative Finance spokesperson Cllr Ken Critchley (Appleton) said: “The Council’s latest valuation snapshot of Redwood Bank showed a new low for their investment at only £6.7M, over £25M lower than the £32M of public funds invested by the Council in ordinary shares. However, whilst WBC has had to write its investment down this has not necessarily been the case for other investors.”
“The original investment saw WBC pay £30M for 1/3 of the shares in Redwood Financial Partners Ltd whilst other shareholders paid approximately £5M for 2/3 of the shares in the same company. Based on the Council’s £6.7M valuation for their 1/3 share, the other shareholders, in contrast to the Council, have seen a healthy return on their original investment.”
“It seems that the WBC Labour Cabinet strategy is to hold onto the investment in the hope that it can recover to its original investment value, like an emotionally attached novice investor.”
“We’ve previously pointed out that it was a fundamental error of judgement for WBC to become involved with financing a new start-up bank.”
“We have consistently criticised the Council’s handling of this investment.”
“However, if this transaction does go ahead then it will provide a welcome increase in liquidity with the bank shares quoted on the London Stock Exchange. In theory this could enable an easier route for the Council to exit the investment.”
“A stock market listing would also bring far greater transparency to the Council’s investment and a subsequent reduction in the advisor’s annual valuation fees.”
“As part of the listing process, we note that a detailed financial prospectus will be published as well as details of a contemporaneous fundraising. These matters are key to deciding whether this proposal represents a value-for-money transaction for Warrington residents.”
“Conservative Councillors will be closely monitoring progress and the actions and decisions of the controlling Labour Group when considering their response to this transaction. We will, of course, urge them to make decisions that are best for Warrington residents rather than decisions that save face for them and their ill-conceived foray into the world of start up banking.”
I don't know if you've ever looked at this
https://www.r8plc.com/investors/significant-shareholders
All of the significant shareholders are listed on the website.
JR Spac 1 is owned by Jonathon Rowland
I'd assume the 16% with Hargreaves Lansdowne are retail investors.
HSDL Nominees is Halifax share dealing which I'd assume are retail investors @ 13%
I don't know who Aurora Nominees are who hold 9%
Interactive Investor are retail investors @ 8%
Lawshare Nominees are AJ Bell which I'd assume are retail investors @ 4%
J P Morgan Securities are retail investors @ 3%
I don't know who Tulham LLC are @ 3%
Goldman Sachs are retail investors at 3%
I'd think at least 47% of the investors are retail based on the information out there.
I think your totally wrong but it's just our opinion.
The new people he will want to bring to redwood bank I don't believe will mainly be in mode presently and the retails holders don't hold enough shares to cause massive upsets in my opinion. I think we will get a nice premium and that small % of retail traders and holders will sell up but would be amazed if the average trader has a large sum at all now.
I don't think they will want the existing holders but will hand a little hand shake which he benefits from instantly also
The majority of investors are large backers already and the minority traders.
So what are the objectives:
1. Business want's to raise capital, this happens regardless of offering shares at a premium or discount.
2. Jonathon Rowland and his friends which have their foot in both camps want to retain their wealth.
If it is offered at a premium, the moment the price increases the majority of retail investors sell up and the share price dives so on paper objective 2 is not filled.
If they offer the shares at a discount the majority of retail investors won't have the balls to put their money where their mouth is and then Jonathon Rowland and his mates hoover up the slack which maintains the share price. Creates them wealth (on paper) and the majority of retail investors see less growth even possible reduced growth from where they are now.
I think he will want the backing of the existing investors as he knows they are good for it and it will therefore be offered to everyone at the same deal.
I think differently , the raise will happen higher than current sp and current share holders will get a limited option as this will be aimed more at larger backers rather than traders
The big corporate backers won't lose loads as they will hoover up whatever is offered to them for share placements. It will be the retail investors that cannot afford to take up share placements that lose out.
Has to be November latest surely and would be nice if all long term holders go something decent back on their massive losses a lot of big backers and corporate backers that will not be happy losing loads, maybe if they get a decent part back they will invest more, 20-25p think most LTH would be relatively happy and i would be over the moon (average down along the way)
Suspence is killing me but excited at the same time,hope we arent kept waiting to long on what's going to happen here,could be absolutely massive increase on coming out of suspension 10p plus would do me vary nicely
“ OUR MISSION
To become the UK’s best, go to, specialist business bank, working tirelessly to provide our SME customers with simple, clear products and fast decisions that allow their businesses to grow”
I like the sounds of this though
“ Getting listed through reverse takeover can be done within weeks only. It helps the company’s management in saving time as well as effort.”
Will be intresting to see how long it takes too..
I am more interested in how long it takes tbh
Personally I'm already all in here. Got a average around 1.2p and held, too scared to trade and miss a spike as it was far too volatile
If you bought at 2p I'd predict a single or double bagger. Which some would consider good but I don't personally for the stress and risk that there was with this one.
But if you get given the option to buy more in a placement you could get a good return on buying more.
So you don't think anyone around 2p will do well? I think the raise will be higher than 2p personally
I first entered at 70p and averaged down to 1.3p for a grand total of £3k.
When the suspension was lifted I sold at 2.4p and bought back at 1.6p and repeated this cycle until I had £11,200 worth of shares.
I bought back in for 2.6p so feel pretty comfortable.
This isn't going to be easy money, the new share holders will do better than the old shareholder, so we'll have to put our money where our mouth is.