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No it�s 75%. Kailas has 60% and Capital Research, PAM and Osrano (Caparo) 25%. 25/85 is 29% - enough to block. So Kailas is going to have to get those guys on board to delist. Why would they, like any minority shareholder, vote for it?
I was trying to get my mind around the delisting implications. I doubt they have decided exactly what to do. Firstly, I would be a bit surprised if they delist prior to relisting in India. Secondly, Kailas and some big institutions have stakes in topco and I find it difficult to think they want to be stranded in an unlisted entity. Thirdly, without checking Indian listing rules I would be fairly certain they would need to go off the back of audited 2017 full year as 2016 is too old. I expect those results to be good. It was always my fear that they would drag it off the market once it reached an inflection point. These issues must have arisen on the companies Monk and Eddie mention - so it would be interesting for the views of others. I can�t remeber how many votes you need to delist - probably 50% (ordinary resolution); if so Kailas can do that by himself and possibly do things outside Panel protections (although I seem to remember Panel rules also govern any company that has been a plc in the last ten years).
I'm afraid there is little to be optimistic about the delisting. (as much as I want to be as a holder.) We own shares in Mytrah Energy Ltd. The Indian IPO will be in Mytrah Energy(India) Private Ltd (although wont be private once listed!) So, we will not swap the de-listed shares for new shares in Indian entity, we will hold shares in a UK holding company which will own a proportion of Mytrah Energy (India) Private Ltd. Pretty sure this bizarre structure (if MYT retains London listing) was how one other Indian group - EROS? - was done, before that didn't work in raising the value of the UK top co and they moved listing to US. Either way, we will not be getting new shares in Indian co, unless they get rid of the Mauritious intermediary, and and then merge the two.
I'll add my thoughts on the likely IPO and possible delisting... we discussed a few months ago as MYT have been quite open about "exploring the option" of an IPO in India. It's always been said that, if they went ahead, the Indian company would be listed in India, which is 100% owned by the already-listed UK company. There seems to be an appetite for raising money this way as others (ACME, ReNew, IREDA) are already ahead of MYT here. The problem - and an understandable one - is who's going to buy shares valuing the Indian company at, for the sake of argument, $300m-$1bn, when you could buy shares in the UK company who now that business at just �40m. I don't imagine MYT on AIM will be a ten-bagger overnight either. I wouldn't want MYT to delist for the same fears shared by everyone else - no market and annual dilution. Although if it is to delist for the purpose of listing again in India soon after at a re-rated valuation, could it be a good thing for us? Maybe it means we won't realise the value once thought but we know it's massively undervalued at present and so could still sell at a very decent profit. Any thoughts? Is delisting all bad? I've followed FusionEx a little since their very controversial delisting in the summer. I think you mentioned this one, Hounddog, when you raised a concern of MYT doing the same. From what I've seen so far there haven't been many shares bought / sold yet but those that have have been above the final share price. A lot of people holding shares at delisting said they would hold for future performance / a future IPO. And I haven't commented on the "loan" yet so... This situation's a real mess - whether Ravi stays or goes because of it. I'm trying not to prejudge because when I've seen him speak or read what he's written over the past few years, it's always given me an impression of a honourable man, with a decent track record and a sense of purpose and pride in what MYT was doing. We all make mistakes and can all succumb to greed (maybe that's a little too forgiving) but I just can't see how taking money out of the business as a "loan" at the expense of shareholders can be done with an innocent mind. Still, you never know. It'll say a lot with how much (or little) Ravi decides to explain to shareholders about this situation. I'd like to think he'd talk us through his thinking at the time, give details or the transaction, and apologise for the damage done (reputation, financial, cultural). That would show character and fit with my up-to-now positive impression of him. However if it's a generic statement from the company only, that says a lot too. It's that old adage about reputation.
Clearly do not like the correct scrutiny of the company with the requirements of aim. If there is a delisting there will be two classes of shareholder with kalas laughing all the way to the bank.
Yes that was the point I was making. If it was a loan for a property purchase one would expect it to be in one go.
Maybe, or just didn't have a clue what he stole
Oddly it looks like the loan was in tranches.
Begs the question if he can pay back quickly why didn't he use the other source of finance in the first place. Need the full report to understand what went on, how was it contracted plus any other dodgy stuff.
Loan re-payed with interest is at least promptly done....
I agree with the negative sentiment here regarding the 'loan', but unless anyone is a mind reader, we will never know whether it was intensional theft or not. The market sentiment, as reflected by the share price, is surprisingly indifferent and would suggest that either shareholders believe it was a loan or don't care it was theft. Either reaction is surprising to me.
Few points 1. The CFO needs to go, if he cannot say no to the CEO in these circumstances he is weak and lacks integrity 2. Would expect expenses to have been abused, not just by the CEO but by the whole management team 3. Anyone potentially lender providing loans will have upped their rates with a massive risk premium 4. These type of people just need to go to jail, using a company as a personal piggy bank 5. Amazing reading the chairmans statement and corporates govn in the investor segment of their website. Unfortunately have a few quid in here for my SIPP.
Agreed - surprised the SP has held up, but these shares were already trading at bargain basement levels. An 'unauthorised loan' is theft by another name. Will struggle to raise new money or rollover existing loans with a crook at the helm. Trouble is that he is the main driver of the Company. Need to find a new heavyweight CEO if the Company is to survive.
I agree with your posts 4kandles. The worrying point is not so much the loan itself, which is being dealt with, but is there anything else. I had long suspected he ruled the company with an iron rod and this confirms it. I had always drawn comfort that, as the largest shareholder his interests were aligned with the other shareholders. The problem is he is the company. The non execs have done a good job - so often toothless.
...and if the company pays this guy off in any way you will know that the problem has not been dealt with. Mark my words.
Hopefully this blows over quickly. Will be looking to enter once it bottoms out. Nothing wrong with the fundamentals of the business.
From my experience, where you find bad stuff, look hard and there's usually quite a lot more bad stuff Was he really intending to pay the money back? Or did he just get caught? The Companies Act of 2006 made unauthorised loans illegal - prior to that, execs caught stealing could claim it was 'just a loan' and get off scott free in many cases. I hope the legal review of this has some real teeth otherwise it will be more of the same. Shareholders would be right to be furious; MYT (shareholders) pays high rates of interest for its loans so that this guy can just help himself. Shareholders need to be sure that the whole operation is not full of rot. At the moment there is no such assurance. I suspect the worst. I am glad that I sold a few weeks back and I would urge shareholders to make some noise about this rotten business. The share price has rightly plunged but I would not consider buying until this mess is comprehensively sorted out. Get the police involved and make sure the right people have been shown the door. GLA
Not so good but I guess shows the non-execs doing their job.
The spend has to come before actual revenue generation so loss making expected imo given the heavy roll out. Construction recently and of now is progressing at its fastest rate. The generating revenue today for the period relates to a maximum 1075 MW of capacity. Trading update 24/7/17 = 1,119 MW in production with 624 MW under construction. In the space of 10 weeks a further 61 MW has entered production to a total 1,180 MW with a further 563 MW to come on stream (I presume staggered) by mid 2018 ie next 9 months and a total 1743 MW. From 10 weeks ago, that will be a further rise of 56% production capacity revenue to kick in and an overall 62% for this reporting period. While revenue might be pressured due to pricing, I expect economies of scale to kick in sooner or later and be able to pay down the most expensive debt packages sooner. Also with a Government transformer failure (now fixed) resulting in a lost 6% of revenue generation in the half, that might have covered the actual small loss.
Thanks 4kandles. My reading of the cashflow is that the outlook on being able to pay their interest is positive. There is now a comfortable margin of operating cashlow ($83m) being above interest paid ($67m). Operating cash flow very close to EBITDA. I can see them being self financing by end next year at which point interest costs should start to drop. One odd point in the accounts is that the recent refinancing is sort of explained at the end of the results and it seems to involve taking on/replacing about $250m of debt at c15%. In part this replaces debt of 12%. I wonder why they have not explained this better. I had expected the refinancing to be at much lower rates. I may be reading the note wrongly - it is a bit mangled. Generally, their explanation of their borrowings is poor. I think most of their borrowings are at floating rates but it is not absolutely clear.
...I refer to operating profit versus finance costs of course
I fear you are correct Hounddog, There was no bone thrown to shareholders in there in terms of a positive outlook. Without this, and as long as the debt payments are bigger than operating income then we should not be surprised to see selling pressure.
OK although I had expected a small profit rather than a small loss. Pity no mention of second half trend or exactly what the latest refinancing meant. I fear the share price will drift until year end results.
Thanks for your thoughts and comments, guys. It seems to me that things could go spectacularly in either direction but I'm happy to keep money on the table here