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Is there an accountant in the room?
A quick look at net assets deducting current liabilities and long term debt does I think show negative net worth of Ā£10,801,000 but of course not a problem as long as business supported by long term facilities and has cash in bank to operate and a capital raise of eg Ā£80m would in effect contra the non cash write down in goodwill plus bolster cash for operations. Iām happy to hold and accept risk of being diluted but of course a lot depends on finally agreed level of redress so itās risky and as usual DYOR and GLA
Iām fortunate in tgat this isnāt a big investment for me but tgat doesnāt mean I wouldnāt like to see the shares double or treble in 12m and I know a lot on this BB have substantial holdings which in many cases are well under water so I hope you get back in the black soon and are rewarded for your patience!
Directors note that a material uncertainty exists regarding the successful execution of a capital raise, current and future impacts of COVID-19 and the impact of potential levels of redress and claims across the Group. The range of assumptions and the likelihood of them all proving correct creates material uncertainty and therefore the impact on liquidity and solvency under both the base case and downside scenarios may cast significant doubt on both the Group's and the Company's ability to continue as a going concern. In such circumstance, the Group may fall under the control of its lenders and there would be a possibility of the Group going into insolvency;
I read there will be an Ā£80m placing and that will obliterate current shareholders through massive dilution?
Ian, we are aware of dilution coming for a long time already. We are trading below ordinary 5p so I understand we should see it climbing above that level in the coming weeks before capital rise.
Hi IanB
Yes I think the big question is issue price but even at current nominal value of 5p (ie no share split) to raise Ā£80m before expenses would require 1.6b new shares v 312m currently in issue so the proportion held by existing holders who didnāt top up would as you say be decimated though the price mightnāt move significantly as the market cap is currently distressed at Ā£13.7m