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I certainly think Rockhopper will/should offer to settle.
Whilst they shouldn’t have to give up a % of what they’re owed, and I suspect Harbour will want paying in full, it might still be better for Rockhopper to come to an agreement and take less for a quicker payment. The legal proceedings will start to cost them money now, and a funding agreement will be required which I guess would see them take less of the award anyway. And enforcement will take time to go through the courts etc, plus the costs of that too.
If Italy agree to pay 80-85% now I’d take it, but given how they’ve played this so far I’m not convinced they will.
I think the Committee wanted to throw out the annulment application because it was rubbish but did not want to humiliate Italy. At the same time, it did not want to delay RKH being paid. This is a classic European fudge.
But this 30-day pause to enforcement forces both parties to the negotiating table. On the face of it, they are only negotiating the form of escrow but in reality once they start talking they will discuss their respective positions and whether a compromise is possible.
I think we will see a deal within the next few months that pays RKH maybe 80% and avoids total humiliation for Italy.
I am highly optimistic now and will top up on dips.
All IMHO DYOR
Happy
It will be very interesting to see what happens over the next 30-40 days. I think the committee has made a very sensible and practical decision which is encouraging. It would be nice to think that Italy might settle, but I won’t hold my breath. I suspect they will kick and scream at every turn, so Rockhopper had better start preparing for enforcement. I’m not sure the committee would have the authority to dismiss Italy’s annulment case completely if the two parties can’t come to an agreement - I guess they would just lift the stay? Does anybody know on that front?
I think we will see the share price constrained by warrants for now. Warrant holders can currently sell placing shares at 11.5p and have until the end of the year to exercise more at 9p. 28% profit which the institutions involved in the placing will be more than happy with.
Still, nice to see some progress and at least Rockhopper can get the enforcement ball rolling soon rather than having to wait until the end of these proceedings.
I don't think the ROI should be allowed to get away with paying anything but the full amount of whatever the ICSID say we should be paid at the end of all this. it's not like we are desperate for the money, plus if they string this out to Q1 of 2023 that's an extra £12m+ in our pockets.
No, I think the ICSID have made a good call, ROI have 30days to put up the cash in a neutral account or RKH and it's lawyers can go for it with the Stay lifted. The ball is now firmly in the ROI court, if they comply they have the option of possibly getting the award partly annulled and thus getting some of their money back, however the plus side for RKH being that when the the decision is made we get all or part of the award straight away. A win, win.
Still not sure how they account for the interest as the award is 190m plus interest and although the can get a rough idea to Jan 2023, if the annulment decision is made at the end of Q1 that's a different of roughly 4.5m Euros in interest! I mean that would cover the Hobnob bills though to first oil and then some!
;-)
Still can't believe we are still at 11.5p with such excellent news. This has to be a buy at this price to double in a month!
LTT
Really positive development. I don't see this as a request to start negotiating.
So far as I am concerned, Italy are being told to pay up and get on with it albeit into an escrow account so they can waste their time and money on a pointless appeal if they want to. We should therefore have further positive news within the next 30 days once this has been sorted.
They are then very welcome to proceed with their pointless and ground less appeal whilst paying us another £16m plus in interest which provides us with EPS equivalent of 3p for the year!
12p os a key point of resistance that looks like it is about to be broken which takes us to 15p on the charts... break that and we should head into the 20s with any positive update from Navitas adding fuel to the fire.
All looks very positive.
I would have thought the Italians are furious about this. It has tied their hands, which l guess is the whole point.
IMO this is good news. It will be a lot easier for RKH to collect from a Global escrow bank than enforcing against Italian possessions. And if Italy don't pay up into the escrow bank then they are in breach of the order and hopefully the appeal would be dismissed on a summary basis, or the enforcement stay could be lifted.
Once the cash has already had to be paid over by Italy, unless they have a decent chance of overturning the judgment, it's just running up extra legal costs. Someone in government is going to have to write a big cheque or wire transfer a number with lots of zeros. The case is just a nuisance until that happens.
Seems to be a case of sell the news I'd say which is often the case with RKH from my experience.
Quite often when there is impending news, the share price steadily rises in the days/weeks before it (as we saw here). My view is this is probably from people taking a punt on the share in the hope they can make a quick buck when the next RNS is released.
When the actual news gets released, the price usually drops a bit or holds steady. (Unless it's hugely significant news, e.g the big Arbitration win). It's happened a few times in the past few months/years where we've seen a fairly positive RNS, such as Navitas agreeing to the deal, only to see the SP fall or stagnate afterwards.
"...or that negotiations have failed and, in the latter event, propose concrete arrangements in accordance with the decision for the mitigation of the risk of non-recoupment. Italy may then briefly comment on Rockhopper's proposal within 10 days..."
Get going on the enforcement in June.
“It reads as a prelude to a negotiated settlement between the parties.”
HI100 that’s my take on it as well.
Say we negotiate 2/3 of the award plus interests as it stands it would still be almost £115 million net to RKH equal to 20p/share and we would get the award very soon:)
The market is not impressed, I wonder why?
https://www.acerislaw.com/costs-of-icsid-annulment-proceedings/
Begs the question why RKH "is currently paying all legal costs associated with the annulment." ?
I would have thought the annulment costs ,bar legal fees ,are borne by ROI. This suggests ROI will have to cough up ALL legal fee's for the annulment as well.
My layman's take - Arbiters are saying to Italy that come Q1 will NOT be the time RKH go about enforcement .It's now.
They have called ROI's bluff and now it's put up or shut up. Either put money into an account or RKH can go after Italy's assets and cause hopefully huge embarrassment to their Govt'.
https://www.malcysblog.com/2023/04/flash-blog-petrotal-rockhopper-coro/
Your right,
There are 3 reasons italy would want a stay.
1. If they win a partial or total annulment, they wouldn't want to have to chase their own money they were wrongly forced to hand over.
2. They wouldn't want RKH spending / loosing their money before they had to hand it back (very likely problem with Sam at the helm and the financial posioin of RKH).
3. Kick the can down the road in the hope of RKH going bust, world events have a massive black Swan event, shifting the blame and music which must be faced to the next itialan in power in 18 months time.
Paying isn't the issue as they have plenty of money, problem is they don't want to.. This decision is telling them to poo or get off the pot.
BB3
The conversation between rkh and Italian lawyers, as this is to be negotiated and agreed within 30 days will be:
Hi italy would you like to
1. Pay the full amount into an agreeable bank in escrow, to be paid out immediately according to the result of the annulment in 2024.
Or
2. Nominate an agreeable bank where the proceeds from the sale of seized italian assets, such as diplomatic buildings, aircraft, or infastructure etc can be stored, in order to be paid out immediately according to the result of the annulment in 2024.
I can't see why option one wouldn't be far more appealing considering Italy won't be able to stop rkh going for whatever assets they want, which would cause them a huge headach dealing with the loss of critical infrastructure or operational buildings at short notice etc.
This judgement has just rubber stamped RKH actually get paid in 2024, (assuming a success in the striking down the annulment attempt).
BB3.. UP WE GO
Hi All
Whilst I see this as very positive news, could it be that viewed that Italy are confident of winning the annulment and want to ensure that if they pay up now they want to ensure that they can get their pennies back
Personally don’t think so just playing Devils advocate
GLA
Boboil
They would be mad not to assist us now with interest being added to the tune of 1.25/1.5 mm EUROS per month.
This reads to me that Italy is pretty much checkmate. Cough up now into an escrow account or kiss your last desperate attempt at annulment goodbye…and in doing so they’ll have no further delaying options left when the annulment request is dismissed.. bit of a catch-22 for italy isn’t it? ;-)
Average broker estimate 33p? (dated 23/04/23)
https://www.nasdaq.com/articles/rockhopper-exploration-lse%3arkh-price-target-increased-by-8.86-to-32.90
Rockhopper Exploration (LSE:RKH) Price Target Increased by 8.86% to 32.90
Exactly.
It removes any extra potential delay to payment after a final decision on annulment is made by Q1 2024 as RKH will have enforced by then and put proceeds in escrow.
Committee wants Italy and RKH to start talking. Significant likelihood that parties now settle. Italy won't want the embarrassment of having assets impounded by tiny RKH.
Amazed at muted SP reaction. Thought we would be back at 15-20p.
All IMHO DYOR
Happy
Do I get it correctly that RKH can collect the money (through any means necessary), but that they have to place the money in a non-european bank account with the rule that they can only use it once the annulment is over?
If the annulment rules in Italy's favour, they can directly get it back through that account. If it rules in RKH's favour, they already have the money ready to go.
effectively, if the protection for Italy can be put in place, we can go about enforcing the payment! Before the actual annulment process concludes - which we still stand a very good chance of winning anyway.
In effect, just gets us the money a lot lot sooner!
So all Rkh need to do is have in place a standby letter of credit from a US bank in favour of Italy, callable should the decision be anulled. Other than the issue of who will pay for such sblc (should be Italy) this should be very easy to achieve. Bang we are in funds before FID!
Committee giving face saving options for Italian government.
All IMHO DYOR
Happy
Well I think that’s probably as good as we could have hoped for.