Rainbow Rare Earths Phalaborwa project shaping up to be one of the lowest cost producers globally. Watch the video here.
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Got lost in my research, but have some interesting facts for those who are not aware of the links between above names.
Question: Will they all allow to be wiped out by discounted share issue?
Peel Hunt: When a UK private client buys or sells UK equities, there’s a 25% chance they buy from or sell to us.
We provide a wide range of trading tools for market access and strategy including a dedicated portal and proprietary algorithms. https://www.peelhunt.com/services/executionAndTrading
4 December 2015 Peel Hunt is acting as Joint Corporate Broker to Non-Standard Finance plc on its £160 million Placing and Open Offer of new Ordinary shares at 85 pence per New Ordinary Share issued in connection with the proposed £235m acquisition by of Everyday Loans.
"Some 25 per cent (of Peel Hunt) is held by a group that includes the motor insurance dealmaker Neil Utley, while 75 per cent of the company’s staff own the remainder of the equity." https://www.ft.com/content/9e89ff52-fb17-11df-b576-00144feab49a
Neil Utley owns 7.96% of NSF
15 April 2021 https://news.sky.com/story/buoyant-ipo-markets-propel-investment-bank-peel-hunt-towards-350m-float-12275946 The investment bank is working with Evercore on plans to return to the London stock market, Sky News learns.
That deal, which valued Peel Hunt at £74m, was backed by a collection of wealthy individuals, including the insurance tycoon Neil Utley.
Evercore works with Peel Hunt and Peel Hunt is partially owned by Neil Utley and then Neil Utley owns also part of NSF.
Evercore helped Provvy (Provident) in 2019 on a defence of a hostile all-share offer from Non-Standard Finance.
NSF is run by John van Kuffeler, who previously was in charge of the Provvy for 22 years.
Everyday Loans was established by its management team and Alchemy Partners in 2006. STB acquired Everyday Loans from its management team and Alchemy Partners on 8 June 2012. In December 2015, NSF acquired Everyday Loans from STB.
Alchemy owns 29.95% of NSF.
22 Feb, 2019 https://citywire.co.uk/funds-insider/news/woodford-and-barnett-back-provident-financial-takeover/a1203495
Fund managers Neil Woodford and Mark Barnett have backed a takeover bid for ailing doorstep lender Provident Financial (PFG) from smaller rival Non-Standard Finance (NSF).
The two managers own both companies and, with US fund group Marathon Asset Management, which is also backing the bid, hold more than half of Provident Financial's shares.
Marathon owns 10.49% of NSF
20 June, 2019 Peel Hunt today reaffirms its reduce investment rating on Non-standard Finance Plc (LON:NSF) and cut its price target to 40p (from 50p).
09 July, 2020 Liberum Capital today reaffirms its buy investment rating on Non-standard Finance Plc (LON:NSF) and cut its price target to 24p (from 47p).
Couple of decent trades just gone through 200,000 and 500,000 buys
Thanks Johnny pc for sharing.
What is weird is an urgency to rise 80m when share price is at historical lows.
As they have 2-3 years to pay back the term loan they could easily wait with the capital rise in 12-18 months from today. They kind of forgot that they make money and they keep repaying the loan instalments on time.
Also as it is still 2-3 years, why not negotiate extension or repay it from the locked unused 200m securisation facility valid to 2026?
So many unanswered questions and no transparency from the company directors.
I think the best we can hope for is a deal that allows PIs to buy new shares at the same price as Alchemy.
I'm not sure whether the company is obliged to do this.
As another poster wrote yesterday, it will be something like Alchemy's complicated deal for Countrywide. But Alchemy are probably in a stronger position here.
Share price needs to be at 10p for that. What will push it up that high?
80 million sounds fair. They need to lend money to make money. The question here is.....will they just wipe out existing holders? A huge dilution at 1p per share would do it. They can then do a 100 to 1 consolidation.
But who knows? A 10p placing and all are happy....
Well I got a very quick response, below...
The size of the capital raise is for a number of reasons including the payment of redress due to customers that have suffered harm and also to ensure that the level of gearing is reduced to a sustainable level so that the Group can hopefully diversify its current debt funding and also reduce its cost. You are right we do have substantial cash balances but we also have £330m of debt that will need to be repaid or refinanced at some point over the next two to three years. The capital raise will put the company in a much better position to get that done and at a lower cost.
Alchemy controls 29.95% of the Group’s shares and remains supportive of the capital raise. I am not able to share any more details on the exact shape of the capital raise but, once we conclude the discussions with the FCA we will hope to be in position to set all of this out for shareholders. As to timing, I can only assure you that we are as frustrated as you are over the length of time this is taking and are doing everything we can to reach a conclusion as quickly as possible. The FCA clearly has a lot on its plate and we are unfortunately in their hands on the timing.
Regarding further clarification, I am afraid that there is nothing else we can say at the moment but I can assure you that as soon as there is something to announce, we will do so.
I reckon about half of the £80m raise is necessary to strengthen the balance sheet which has been hit by (1) reduced lending at EL division over the months of lockdown and (2) no new lending in the GL loans division and (3) provision of £16m re. FCA review. We can expect a £20-£25m loss for 2020 when the accounts are published on 30/6.
The other half is about creating the dominant sub-prime lender in the UK, perhaps taking the place of PFG.
I asked them once about missing directors buys but heard only that they are in the locked period before the results. Wonder if they will open personal wallets in 2 weeks.
Well I've emailed them, but expect a standard fudged response.
Please email company to get some clarification about the 80m need. It is impossible that 80m is needed to unlock 200m securisation facility. Do we actually still need it? Another issue, what does it mean "supported by Alchemy" ? What role is Alchemy going to play in the placing?
NSF is very under-valued, do not think it is too expensive. It is a company that is operating in approx 70-80% pre-pandemic.
In last update they said in October there reached the break-even and are profitable.
I will try to dig into the same time investments in the MM and company where MMs are managing the price level.
Couldn't agree more Mariog. And that looks very suspiciously apparent here.
The raise just doesn't make sense. I can't get my head round an 80m raise on a current MCAP of 13m. Someone correct me if I'm wrong but that appears to be around an 86% dilution. That is astronomical. I'm hoping someone will correct me. Pre-pandemic we were at around 30p. Dilute that by 86% and the equivalent is 4.2p. Exactly where we are now. But we are lending less, so less profits. Are we actually over-valued?
I'm hoping I've messed up somewhere. Please someone explain why I'm wrong and also explain the justification for such an obscene dilution. My confidence in NSF has evaporated. I've got quite a substantial interest here and my finger is hovering on the sell button before my current state of marginally down gets worse :-(
Thanks johnnypc.
What do you think about rising a concern regarding private investments in both Market Maker and company where the MM is managing the share price? I can't see this right as it creates a risk of manipulating the share price
Hope you are right. One company in redress. FCA concerned about other 2 and looking. 3 companies in redress spells BUST! Questions about covenant breaches, refinance only if FCA are happy. Teetering!!
The FCA would be very irresponsible to be the cause of companies in this sector going bust. Remember these firms are the final option for people before using illegal and dangerous loan sharks. The companies have to charge high rates to compensate for the risks of people pretending not to be in or spending their repayment on narcotics, it all happens. The FCA know this but have to be seen to be defending the consumer. However they know what a vital role is played by NSF and Amigo. I don’t believe Amigo will go bust, although there is a fair chance. NSF is definitely not going bust, they have a supported recapitalisation. What that means for PI’s is a different issue but they’re not going bust.
I see it as a race. Things look neck and neck at the moment with Amigo. They are both going but which one will fall over the cliff edge first
IMO, the important new information that came in today's RNS was the amount they want to raise. Until now they have talked about a 'substantial' raise. I had reckoned on that being in the £40-£50m range. But they want to raise a lot more than that, and it's taken the market by surprise.
On the positive side, it seems very unlikely that NSF will go bust.
Nothing makes sense here. MM are not pricing this share correctly, but well, look one of the MMs is Peel Hunt who have been advising Alchemy in CWD. With CWD share issue also was not necessary if you read their archival message boards.
For uninitiated, like me, how is it possible to raise £80m against a co with a mcap of £13m and if so how do you set the price/share. Most equity raising is at a discount to the sp. I genuinely can't make sense of the BoDs announcement.
Something very dodgy going on with this share. SP was down to just below 3 - this was when the very existence of NSF was under threat. Now we are at about 4, when there is no danger of this at all. Something doesn't add up at all.
And the RNS, Alavib, was indeed weird. Seemingly arbitrary raise amount, but mainly why the need to state te amount now if we don't know the redress?
Mariog - your line of thinking is very plausible.
one more post on this very negative day caused by badly written update,
IPF update today lifted their sp to the pre-covid days.
Our results in 2 weeks must be good as we are operating, lending (in 80% vs 2019), collecting, repaying own debts on time etc.
Exactly.
Regarding share price kept artificially low, wuestion for FCA to answer:
should the private shareholder (N.Utley) in the market maker (Peel Hunt) be allowed to keep shares in a company where Peel Hunt is an active MM?
And they are not a AIM listed company ;-)
PS, I meant to say 80 million fund raise not 83, still an odd number tho
Like most of these AIM listed companies, RNS’s never tell the shareholders the true story
For example where did the need to raise 83 million came from , why such an odd number?
Also with the loan book of 300 million and going well with growth in lending why the need to raise such odd amount?
Remember that Amgo will return with SOA2 and hopefully that would get approved by the FCA and hence the court, so why not wait for that outcome before telling the market they are going to raise capital in 3-4 months time? Why not let the business of lending to pick up as monies collected can be relent so with the cash in hand and monies coming in they can easily keep the business going until the Amigo can get FCA approval and then NSF would be in the same boat and they will know what to do and how much it would cost
Today RNS was very badly prepared, instead of the good news about lending picking up they spoiled it by slipping in the fund raise
Sometimes I wonder about the management of these companies, their untimely RNS has caused 18% drop on most under valued SP in the sector and this could have been handled better