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This restructuring is a bad deal all around for current SHs. No nobel prize for me stating the obvious, but for example in exchange for the secured lenders wiping off £4m in debt, and waiving of liquidity covenants, they will be given almost 10% of the company in exchange for a few peanuts if the shareprice stays above 4p for over 60 days!
Sure its a risk for the secured lender, but what a ridiculous warrant exercise price. Success is just another way to F up curent SHs. The best for current SHs is an outright purchase of the company before this restructuring takes place, take the losses and run.
if all resturcturing goes to plan, approx market cap will be £15m, of which £11.6m will be cash, valuing the company as it currently stands at £3.4m, or 1.45p per share.
if you are still holding now, you are basically betting on the company recieving an offer before restructuring takes place above 1.85p or takeover speculation that may cause a spike. There is literally no other reason to hold. Given the debt the company is in, and the dismal profits if any (skewed this year by a one off lease sale), bandits c.3p looks very very generous indeed. I doubt any PE would want to pay more than 1.45p for this outfit given this is the valuation of the company as things stand after restructuring. Any offer above 1.45p would be beneficial to the small PI.
Only big SHs, banks, secured lenders and of course the board benefit from this restructuring and its subsequent sucess (if any). PIs, as per, will be left with nothing. And this current premium over the 1p placing price will reduce with time as we get closer to the restructuring event.
All in all, a bad deal. But it never was going to be a good deal for current SHs. Lets hope the company gets sold.
Only a win for new investors if restructure goes through. If someone offers 5p now they will likely get it and new investors get nothing. That is why I am not selling as you only get rights (and diluted 84%) if nobody buys in the short term.
I am expecting the SP to naturally rise back to 3p, where we were before Sky news leaked the company in talks about fundraising. SP was False drop to 1.2p on fear of administration. Ask yourselves who leaked the info to Sky News, reported to be an investor. That investor knew the SP would tank on such news, giving them their 1p price per share if the fundraising goes ahead. Now that’s been agreed, SP can return to where it was just a week ago. Higher the SP now the better for the three new investors, a higher SP may put off a potential offerer in their eyes. Win win now for the three new investors, some of us may still win here also.
Large buy just went through, was unable to get a quote for a good 2 mins, and buy is now 1.98p
Im at 2.5 in my isa, and 8.9 standard account, even 1k now avg down would drop it to 6.7.
risky risky.
Billbob as the effective date is the 9th you get your rights anyway.
I have a lot for me 150k of shares average 3.1p
Thinking of selling if it's 2.2p.
Take a small loss if sale
If they go with current plan I get 135k of rights. If they can reach 2p. I escape overall at evens.
I must confess this is a lot better than I feared but I know I have a low entry price.
I think there's too much of a risk for only 2x to 5x return, 10x minimum surely?
Volume so far today is less than 4m shares so less than 2% of the company - so irrelevant imho. The restructure is a stay of execution and if used I would expect a break up over six months - so I will take up my rights on the same terms as Luke Johnson et al. Big question is can anyone step up in the next couple of weeks to buy what is there (with 20m gbp of net debt) at a more attractive level than the restructure option? That is why I think some people have chosen to buy at 1.6p - but it is a binary bet albeit one that could return 2-5x.
Yeah, thats a deep hole to cover at 5pps
Banburyboy, I think the bank will have the final say here, not the three new investors. Will be sold before we get to September imo.
I also can’t get Eldose Babu out of my mind. I wouldn’t be surprised if he and his family feature here with an offer for the company. As we know Eldose was aggressively buying in December taking his shareholding to 17%, paying 5p a share. We learn this week that another family member has also been buying and holds 1.7%. I am of the opinion this was strategic buying in December, I refuse to believe an investor of this magnitude buys up 17% of a company on a whim. Time is on our side. This is going to get interesting imo
'better for us'
guess that depends on when you bought, and if you took place in the last placing at 20p, becasue it def wouldnt be good for you then. i know the directors bought a lot at 20p.
Really interesting one Bigdaz.
Any serious buyer would be snapping up shares at these prices as it gives them clout at the vote.
The new investors have a fab deal 80% of enlarged company for £10m.
They see value but the bank is forcing them to go through sale process.
Disadvantage of sale is no creditors restructuring which is fundamental to cost reduction
My outside bet is Youngs etc provide the £10m for 49% of company on the same terms as the three shareholders they have tapped up now but better for us ?
Stone gate are struggling with their debt, can’t see them buying
Would I like that...
Probably a 10 bagger from opening price though.
Agree with this. unfortunately Revolution are a necessity in the drinks industry for big brands like Diageo and Brown Forman to thrive in despite the mainstream/bland offering, so imo will never go under as too many jobs in hospitality are on the line.
Many acquisitions happening everywhere now in the trade. My guess would be Stonegate or Mitchell and Butlers putting an offer in. Stonegate already own Be At One which is almost the same style of business so would make sense to me.
I'm spectating on this one but could be a nice trade in there over the 6 months when summertime trading is in full swing.
Seems undervalued to me though. GLA
Can we have the 100p that was previously accepted by the company and turned down by the greedy shareholders please?
It isn’t particulate clear. However, the rights issue may never happen. . If there is a buyer and we are not holding we will miss out. I am confident we will receive an offer for the company, I therefore am choosing to hold.. I noticed Young & Co took a holding recently. They purchased City Group in December. They have enough finance behind them, and Rev Bars is currently cheap imo.
Ah, got you. yeah, that would be a good one to know!
those that took the risk buying at 1.2/1.4 can be rewarded without losing out.
the theory makes sense.
Rise despite large fund raise
How come ?
Yes Ian but the record date is 9th April.
So if you sell now the rights are still with you.
So I sell 80,000 today. I retain the right to buy 70000 shares at 1p.
If it hits 2p I think I would consider selling but would love to confirm by understanding is right
Sorry, got that backwards, for every 8 your own, you will be eligible for another 7, but you need to be a holder.
Someone said its a 7 for 8 raise, so you need to be a holder of x / 7, to be eligible to get the extra 1.
The open offer record date is 9th April.
Does that mean if I sell today for say 1.6p ( it's going up). I still get to buy again at 1p if it looks worth it ?
Seems to be a restrictive clause preventing anyone building a stake.
0.5p I bet . Pays the bosses another 6 months