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"In the Company’s annual report and accounts to31 December 2019 and 31 December 2020,the
Investment Manager outlined its intention,subject to the relevant approvals, to transfer a proportion of
the Company’s holding in each of Dignity PLC, Hornby PLC and Phoenix SG Limited to The Castelnau
Group, a company to be managed by the Company’s investment manager Phoenix Asset Management
- Votes have to be submitted by 24 September.
- the cap table fall's even more under the control of Phoenix and visibility reduced with out the glimpses provided by Aurora. I presume Aurora think it's too small to be bothered with.
It is intended that Castelnau will be floated in early October2021.....
"For example,one of the most interesting activities going on inside the Transfer Portfolio right now is the turning of the
world’s most valuable stamp,and by weight the world’s most valuable tangible asset,into a digital
fractional ownership model with an exchange where we plan to add similar assets.That exchange alone
may have considerable value. This values its 80percent with Castelnau and2 0percent with Stanley
Gibbons, a Transfer Portfolio company.
- more crumbs for poor SGI, I think it would make much better sense to be invested in Castelnau and enjoy the diversified rump....how east would it now be to take all of SGI into Castelnau 's portfolio through a debt default. It feels like an SGI listing might only be a short term option.
Old SGI is just too much bother, so it's time to leverage the name and try to make hay on an 80/20 basis.
https://www.rawnet.com/insights/rawnet-acquisition
- it's all too entwined....perfect Pi Macerator...
Debt, equity and suppliers.....Pearls will think it's a wonderfully supportive echo system LOL
Could the future include debt payments, charges from a group company and 80% going off to Castelnau? Nice work if you can get it. Meanwhile....what's left over for SGI? .....Oh 20% minus debt payments, intra-group charges and listing fees.
Devon, I think you failing to differentiate between standard bank debt and supportive debt funded by a supportive shareholder. They are very different creatures.
SG's profit and loss position would be impossible at a conventionally funded company based upon bank debt. If Phoenix carries on supporting it as currently, it will in due course recover.
Key to this will be SGI pulling back into the black again, and whilst this has been derailed a bit by the COVID situation, in due course it should come good especially as people are now returning to the West End.
In addition, next week Stampex is on, this will be an acid test of how much the stamp market is recovering.
as you said "The problem is that the company is now controlled again by its debt " "THE PROBLEM".
problem debt, intra-group supplies and 80/20....could it get any worse.
Did the, as you were hoping, wipe the debt out today?
Still have a target price of 1.8-2.2p Just taking longer than I thought.
Devon, I think you'll be whistling in the wind on this one.
Their supportive main shareholder is clearly holding the cards here, but there's equally no hurry and SG is being given the time to rebuild and refocus. In due course, as they announce the NFT / crypto initiatives and start publicising things, combined with the Castelnau flotation next month should guarantee a range of positive publicity which in turn should help the shares. The point is that you are seeing the debt as though it is bank debt which it is not. Phoenix can frankly waive interest payments etc for years if they choose to.
Hang on, you were the one telling us last week "The problem is that the company is now controlled again by its debt "
You sure you aren't the one confused.
Their supportive shareholder? Surely you don't mean Aurora, or are you turning a blind eye to the fact that they are planning to shuffle off their holding into another vehicles. if people didn't understand the finance, as you said the was an issue at a previous AGM, it's just about to get even more complex, debt, equity and supplier... it's all just Phoenix, but on a 80/20 basis.
https://www.investegate.co.uk/castelnau-group-ltd--cgl-/prn/initial-public-offering-and-publication-of-prospectus/20210923140741PDDEA/
the new holders of Aurora's slug of SGI...Initial Public Offering and Publication of Prospectus
It looks like Castelnau Group will own 31% of SGI post IPO.
Devon, this is confusing. According to recent RNS's, SG will be a minority holder of Castelnau. Yet you are saying Castelnau will own 31% of SGI? They can't both be correct statements?
HBR today proving the old adage: buy on the rumour, sell on the fact.
Getting too complicated now, it is all about who owns the debt. SGI is the debtor and service companies lining up to supply not too cheap credit. A terminal prospect here and nothing for shareholders in the end.
I agree, even with the new capital coming in you've got a highly complex mix.
Phoenix owning the debt.
Aurora managed by Phoenix in the equity - I think they'll still be there.
Castelnau managed by Phoenix, with Aurora a shareholder in it, in the equity.
Rawnet, 100% owned by Castelnau, a key player in SGI future (with 80/20 returns).
For me, I'd be concerned any "profits" would be fed back into interest on the debt for Phoenix, eaten up by charges from Rawnet and 80% absorbed by Castelnau. There's been some buyers today, lets see if any of them are institutional, but I think I'd prefer to be on Castelnau IPO over SGI's equity. I may have a look if it doesn't get away easily or looks discounted to get it away. A premium, I'd need convincing. Overall, the above structure calls for a discount on fair value for SGI's common stock.
"Devon, this is confusing. According to recent RNS's, SG will be a minority holder of Castelnau. Yet you are saying Castelnau will own 31% of SGI? They can't both be correct statements?"
Have you bothered to look at the Notification?
"Phoenix SG Limited Private company but main asset is AIM quoted 31% (% of Co. held) Phoenix SG Limited is a private holding company, the principal asset of which is an approximately 58.1 per cent. holding in The Stanley Gibbons Group plc ("Stanley Gibbons").
Can you tell us where you think it said SGI will be a shareholder in Castelnau.? I've word searched the last 4 and Castelnau., as far as I can tell, doesn't appear.
Aurora appear to have injected their SGI shareholding into Castelnau. Are you confusing that SGI will get 20% of anything that's generated with their assistance.
Castelnau currently holds investments in two unlisted companies, Rawnet and Ocula Technologies, with existing clients of the Investment Manager committing to transfer holdings in four underlying investee portfolio companies (Dignity Plc, Hornby Plc, Phoenix S.G. Limited (the principal asset of which is a 58.1 per cent holding in Stanley Gibbons Group plc), and WLS International Ltd) on Initial Admission (the "Target Assets"), in exchange for the issue of the Consideration Shares.
Devon, the RNS of 8th June details that SG is expected to have a minority holding.
You mean this:
"The Group is also considering partnering with Castelnau Group Ltd (Castelnau), a company controlled by Phoenix Asset Management Partners, as Castelnau seek to develop a new digital platform on which to buy, sell and most importantly, enjoy collectible assets. The proposed partnership with Castelnau has the potential to provide the Group with a minority shareholding in the new digital platform at zero cost as well as cost free access to the platform itself. "
Even SGI main asset "The World's Most Valuable Stamp".. really belongs to Phoenix, in the nature of all "interest free loans"
-Interest free with 50% of any profit made on the sale of the item due to PSG.
-Secured solely against the item with no further recourse to any group companies.
-An initial 5-year term, which can be extended by agreement between the parties.
-If the item is unsold at maturity, the loan can be settled through return of the item to PSG.
-If the item is sold for less than the outstanding value of the loan, the net proceeds of the sale will be deemed to be sufficient consideration to satisfy the loan obligation in full.
-Sale of the item requires PSG approval.
A partnership, even a junior one, isn't a shareholding.
"Any future agreement with Castelnau could constitute a related party transaction under the AIM rules and further updates will be provided in due course. "....LOL
Castelnau get 80%
PSG get 50%
SGI's ordinary shareholders what do they get? I bet they paid a lot more for the 100% of Rawnet than they did for SGI.
If that turns out to be anything more than "potential", it's a heady mix of cross holding, all with Phoenix sitting at the middle.
Like over complex cap tables, related party transaction, should make anyone but the most sophisticated investors think twice.
Nevertheless a minority holding is clearly stated in that RNS so it is a bit confusing
"Nevertheless a minority holding is clearly stated in that RNS so it is a bit confusing"
"has the potential to provide the Group with a minority shareholding " it's not actually a minority shareholder, but the potential of one. Castelnau Group Ltd or in a "the new digital platform"....they may be different.
If it was Castelnau Group Ltd, then it would hold shares in it's largest shareholder. If I ever needed convincing that SGI was a mess this would do it. It's too high a risk for anyone than a punter or speculator. How can you possibly ever try to analyse it unless you are an insider?
Nevertheless Devon, there's one thing that is clearly emerging here: SG will be getting a minority holding for free in either Castlenau or the new digital platform - Rawnet. SG did not own this extra shareholding before, and in essence it is a very unusual deal - SG seem to be getting the stamp on extremely soft terms, and a free minority shareholding in a new NFT trading platform. Given that SG will be responsible for everything to do with the 1c stamp, I would imagine they could get a decent minority share of Rawnet. Whether this is 49% or 10% remains to be seen but it is clearly coming without strings for SG - it seems to be frankly a gift from Phoenix! Phoenix previously owned 100% of Rawnet, now they are giving away part of Rawnet for free to SG.
Without doubt the whole thing is very incestuous, but this seems a novel way of boosting the market cap of SG without taking more conventional steps instead.
"Nevertheless Devon, there's one thing that is clearly emerging here: SG will be getting a minority holding for free in either Castlenau or the new digital platform - Rawnet .....potentially, how many times!
"Given that SG will be responsible for everything to do with the 1c stamp," alas that's not true, you only have to look at the terms of the deal.
'Without doubt the whole thing is very incestuous, but this seems a novel way of boosting the market cap of SG without taking more conventional steps instead." incestuous indeed, by "without taking more conventional steps" do you mean like making a profit?
"Phoenix previously owned 100% of Rawnet, now they are giving away part of Rawnet for free to SG. ' Did I miss an RNS, because I haven't seen one saying that? It's the opposite, they've given away an interest in Pheonix SG & Aurora holding to Castlenau... there's only been the mention of a possible interest.
That's a good point Devon, Nevertheless Devon....how many time have hear you say that, only to find a few months later you're suggesting a criminal Board has stolen your money LOL
So incestuous that Auroro and Pheonix SG had unloaded their equity into another vehicle and Phoenix has offered it up as an IPO.....think about that for a moment....it's an exit by any other name. ;)