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you seem to be calling all the winners recently. I followed you in MAC and mad a nice amount, I have just taken some more in here aswell. Risk vs reward seems great at just a £1mil mcap, also hardly any shares in issue.
When is the exact date of the deadline? thanks
great chart play and fundamental play. gla
of interest here this morning. Deadline will soon be upon us. Place your bets gentlemen
Yes, we will see. My average here is around 2p, but think there should be decent upside providing they do as I hope!
Well if you bought in at around 1p or less and the debt situation is resolved in R4e's favour, then I believe you are on to a possible winner here. At the current share price the risk/reward ratio is'nt quite as good. Will watch. Ftse 100 below 6k and its only monday. No wonder I fled to cash in June while you manage to find some winners, but that's what its all about.
Agreed, it is certainly at the riskier end of what I involve myself in, but taking everything in to account I am happy to take a punt, so, as ever, time will tell. ATB
You may be right but the repayment plan as presented in their RNS is'nt self explanatory. It looks like nonsense to me. R4e are trying to pay back AIB with shares that are'nt worth £5,155,000 at the current share price and then telling them to wait 5years to receive £2m which they will be lucky to get anyway. The plan being to pull off a Paul Daniels trick of converting shares not worth £5m into £2m in five years time. Over 5years at £400,000 per annum (the current rate of repayment) R4e would have paid AIB £2m anyway. So AIB might as well carry on and wait 12years to get their £5m back. In the meantime the balance of £9m might get paid by other investors and AIB paid off in a lump sum. Well R4e have until october (the completion date) to sort something out. AIB are not in my opinion forced to accept a £3m haircut if they are prepared to wait longer for their money. As for the £9m no investor is going to bite without proper sureties after watching the company's relationship with AIB. Should R4e start to prosper going forward it would be better for AIB to accept better six monthly returns over a longer period than receiving shares of dubious value. The situation is fluid and worth watching.
Good post, summarises the situation well. I will try to fill in the blanks. From what I can work out You are right in your calculation that technically AIB are receiving shares at 55p a share, although this somewhat of a red herring as they are basically writing off £3m to guarantee they get their £9m. R4E have stated that this refinancing process will restore shareholder equity to a positive and give them sufficient funds to expand. This suggests to me that they would be looking for at least £15m in order to pay back AIB their £9m and have sufficient cash at hand. So the question is who is going to invest and how much are they going to pay per share? If I was Mr. Stoller who is by far the largest shareholder, so his interests are aligned with ours, I would want to present the company in the best light when discussing with new investors so would probably be citing the last results, specifically the improved EBITDA at £2.6m and that taking out the goodwill impairment and financing costs would have delivered FCF of around £1.5m. I would them argue that on a conservative PE of 10 this would value R4E at £15m, so a value of £6m for the current shares in issue versus a current mc of £1.7m. Clearly risky, but with I am happy to take a punt on this at this level as I think that the business will push on once free of the legacy debt. ATB
Right I've given this another look and I find their RNS re debt settlement ambiguous and as clear as mud. R4e is currently carrying a huge debt of £14,585,000 assuming the debt facility with AIB has been fully utilised. This versus a market cap of £1,797,600. How it got itself into this mess you may know. However I do notice its been able to pay £200,000 back to AIB every six months just enough to keep the wolf from the door. I don't quite understand what the number of fully diluted shares at completion are, however if we take the number of shares in issue ie 74.90m and use that, then AIB's 12.50 % works out at 9,362,500 shares for which they will receive £5,155,000. That means the share price AIB receives will be 55p which can't remotely be correct. So the undiluted no of shares just has to be staggering ...?? or what..?? Then there is the matter of the remaining £9,435,000 that R4e has to collect from other sources to pay back AIB by completion date (ultimate date october 2015). Other institutions I assume and not impossible levels of dilution at the current sp. As for the put option why would AIB want to exercise it all. That simply means that after 5 years having received £5.155m in shares R4e will pay you back £2m for the same shares. What sort of a deal is that. I would promptly sell the stock if I could but probably more difficult than one thinks, which is why R4e are giving AIB a royal shafting I suppose. The moral being if you lend £14m quid to an organisation without proper collateral you wind up with a problem. Nothing here you don't understand or have'nt seen so what have you spotted here. It looks like I've missed something or the market cap does'nt reflect the assets of the company. The debt problem looks to be pretty serious and company debt plan poorly explained. Await your reply with interest
Thanks for your reply and will examine your figures after lunch.
Afternoon, my take (and I could be completely wrong) is that this is effectively a debt write off of £3,155,000 (the difference between the £5,155,000 AIB are paying for the equity and the £2m put option. It's just another way of making R4E more attractive to new II's and guaranteeing that they get their £9m back. I guess this was agreed as a compromise after some negotiation. 1. AIB will convert an amount equal to £5,155,000 of the outstanding principal debt due under the Existing Facility into new ordinary shares of 2.5p each in the Company ("Settlement Shares"), with the number of Settlement Shares to be equivalent to 12.5% of the fully diluted issued share capital of the Company as at the Completion Date. 2. r4e will grant to AIB a European five year put option over the Settlement Shares (which can only be exercised on the date that is five years from the date of grant) (the "Option"), which, if exercised, will result in r4e acquiring the Settlement Shares from AIB for a consideration of £2,000,000 in cash.
I too have been watching this for a while and gettin confused by the details of the re-financing plans. Can you possibly explain please how the £2m put option works and why R4e is offering this to AIB..?
I think most of the sellers at this level have probably done so. As we move into September and people getting back to their desks I ham hoping to get some positive news on the refinancing. Let's see if Mr. Stoller's comment about it being a 'great day" for R4E cones to fruition.
would think that people may be watching this share , have been myself hoping to see share price drop back down more again , before buying in , can be risky with shares one never knows when news can come , I will take my chance , have a lower buy in price in mind
Dunno mate. Been a couple of months now since the last news, so would have hoped progress has been made, but given the holiday period then maybe not. If nothing heard in next couple of weeks I will drop them a line.
Over here. But it was like that at MAC before today. Is this one next?
coming soon.
upon reflection, I think that is probably the ghost buy from earlier. In any case a confident sign.
buy just gone through. Somebody definitely knows something
It will get there. Haven't sold a bean as looking for multiples of current price
Where is everyone. This share has good potential for people to make a shilling or two. I'm getting quoted at 2.45p to sell. Still wants to rise IMO
How you can go for ages with no action then everyone decides to trade for a couple of minutes then nothing again. Think they call it market manipulating !
of sells there.
2.71 to sell.. they want them!