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I’ve got a lot of capital ties up in this company and have been frustrated by not being able to adjust my position (in either direction). One thing I fail to understand is why the shares were actually suspended in the first instance. In other bid situations on the main market, shares almost always remain traded, allowing holders to take a view either way on the likelihood of a corporate action succeeding (and the likely impact on the share price).
Can someone explain why this situation is different?
Ian - I’ll have a go in my layman’s terms as I am no expert in this area but my understanding is as follows:-
In simple terms, if a company tries to acquire another company larger that it’s own it is deemed to be a Reverse Take Over (RTO). The rules that determine a RTO seem to be very complicated and there are quite a few of them. However, as a rule of thumb I tend to think of it as being if the market cap of the assets being purchased are larger that the company buying - then this is a RTO.
If a RTO is triggered it comes with a mandatory suspension until a new admission document is issued or the deal fails. Upon either of those two scenarios occurring then trading can resume.
My concern here is that if SS should fail and we immediately sign another SPA with another company larger than ours, we could possible go directly in another back to back RTO and subsequent suspension for another 6 to 12 months.
Welcome Ian. RR beats me to it and explained beautifully.
I’d say AK will only announce if the new deal is all done and dusted. I doubt he would want another prolonged suspension. I’m hoping two done deals announced at the same time, or ver close to each other in a matter of days.
Thanks, useful.
I’d hope if SS fails shareholders would be given an opportunity to adjust their positions before another suspension, regardless of any potential new deal in the pipeline. The medium term Shante piece performance has been pedestrian, and that’s being polite.
It’s interesting that both of the main brokers to the company have no view on the valuation of the company as it currently stands.
Who knows how the relisting share price is determined behind the scenes in the absence of any normal supply/demand dynamics.
All a mystery.
Bear in mind
On 2/6/21 we were suspended on the basis of a proposed acquisition and RTO of Exxons interest - There was NO SPA signed.
On 13/6/21 just over 6 months later we signed the SPA with Exxon - but also signed the SPA with Petronas for their interest re Chad.
2 weeks later the adm doc was issued for both SPAs and suspension was lifted -overall in 7 months on 31/12/21.
Took a further 12 months to complete Exxon on 9/12/23 and we discontinued with Petronas in Dec '22.
This time around we've signed the SPA with Petronas for S.Sudan on 12th Dec 2022 along with immediate suspension.
We had a general statement for the adm doc to be issued in H1, then it was moved to be by 30/9/23. This time however it's a mid December month guideline - why not Dec 30th ? It's on or by 15th Dec - so is this seen as the overall final date, both for completion & approval.
Even though we signed the SPA with Petronas in Dec 2022 - i would think it was under discussion long before that - so why i think Jan 2022 might be the effective date.
That leads me to think that when AK said they hoped to have another significant acquisition before the end of 2023 - it could be well progressed.
If S.Sudan concludes - suspension is lifted and there'd be no need for a further suspension unless its a very large acquisition in its own right.
If S.Sudan doesn't go through then they should come back to trading immediately.
Perhaps this could throw a further acquisition into dissaray or they wait and leave a period of trading before an announcement which could be weeks, months away or not happen.
I think the date of 15th December is possibly significant regardless of Christmas - it's mid month and eaxctly 12 months since the SPA was signed.
I think the Government perhaps has been looking at an alternative deal in August on the basis of pre-emption which must be done in a defined period ie getting more money from somewhere else and run the asset themself.
Problem is they want a 5 year payment holiday and they are genuinely broke. From what i know all their oil is pre sold up to 2027 so have no flexibility imo and why i think the touted amount sought from Caltech has been so much to make an alternative deal worthwhile. On the basis of their pre sold oil, i'm not sure if that was based on much higher production figures say pre 2019 and which has fallen way down to todays numbers. Such a deal would leave them in an even more precarious state ie totally dependent on oil revenues something the world financial aid partners are totally against.
'Took a further 12 months to complete Exxon on 9/12/23' - should read 9/12/22
Zengas - On the basis of what you are saying, I think if we if don't receive news by end of November than it is fair to say we are probably in the same place as end of September. My personal opinion is that the first 2 weeks of December probably aren't going to change the position we are in at the end of November. I tend to discount December as a slow month as it's pretty hard to get things moving quickly leading up to Christmas and new year break. So in reality wouldn't put it past if there was another extension till end of Feb / March 2024. Again Jan tends to be a slow month as well going into the new year.
So if December 15th is not achieved than with every chance we are looking at 31st March 2024.....................
TiL, don't forget Save have an objective of a further acquisition completed by end of year, and AK reiterated that at the last meeting, so whether we come back or not by December, we should hopefully have another one in the bag by then.
What’s the chance we will get it if still not by Dec 15th? Six months passed the original deadline. I don’t have high hopes for SS but as long as we have another big deal signed by year end all is fine. Let’s hope so.
I do wonder legally or ethically how long they can keep rolling on the suspension. It's currently suspended on the basis of a deal that wasn't the reason for the initial suspension, and talk of working on another deal if SS fails, and a another extension to the already extended suspension period does make we wonder if they are playing a bit fast and loose to avoid having the shares trading until they have possibly managed to pull something out of the hat. Can anyone shed any light on what the Nomad might need to support an extension request ?