Charles Jillings, CEO of Utilico, energized by strong economic momentum across Latin America. Watch the video here.
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There’s no positive spin that can be put on the last funding round. Either GL and GD got completely rolled over (I mean Jesus, the ROI on the lender is eye wateringly good at SH expense) and they just couldn’t fathom how bad such a structure could be, or they were so desperate of running out of funds they had no choice. Which is it? I completely agree with the last poster, as is GLs MO he’s not open obvious or transparent. That RNS hid in various convoluted ways the true horrible extent of the financial impact of the raise. For obvious reasons, but it’s underhand sneaky and distrustful at best. Why is all this happening? Well it’s merely a window or two into the extremely precarious state of the company and the outlook for existing SHs in particular I fear. History does repeat itself time and time again, and this company is full of punting PIs hoping against logic, history, objective analysis and the blindly obvious that a one in a million rabbit will be pulled from the hat by very sub-standard management. I very much doubt it.
Have to admit I've been confused about these loan note conversions. Had to go back and reread the detail in the RNS from last June. Main point of confusion was why the investor would be converting the notes to shares at 2.25p when the market price of shares is much lower.
https://www.lse.co.uk/rns/SOU/issue-of-convertible-bonds-and-issue-of-warrants-j2mdirm7ar0ldh3.html
If I'm understanding it right, when the loan notes are converted the entire interest that would have been due over five years becomes payable (at a shocking 15% pa). Furthermore, the interest can be converted to shares at a weighted average of recent daily prices. So basically they take a hit on the conversions at 2.25p but then they get 75% interest which can be converted to more shares at 1p. Shares end up costing about 1.1p, a bit higher than market, but they would never have been able to buy tens of millions of shares on the open market at that price. (Open to correction on my logic and arithmetic here).
What a truly horrible deal for SOU (or, at least, its ever more diluted shareholders). As a sign of how over a barrel they were back in June, even the fees associated with the issue of the loan notes were paid by way of new shares in lieu of cash to SOU's financial advisor and the investor, plus a ton of additional warrants to both.
The thing that's REALLY puzzling me is that the £2.5m in notes was just the first tranche of a total of £4m which SOU said would provide working capital through the end of 2023. The second tranche worth £1.5m never materialised because it was conditional on a minimum share price at the time of drawdown which wasn't met. So how are SOU still going if they were short £1.5m at year end and we are now a whole additional quarter in?
Total shares on issue have now gone from 1.86 billion to 2 billion -- a dilution of about 7% -- and we are not done yet with the loan notes. All to fund just a few months of working capital. With the share price at an even lower ebb now, and the prospect of another raise seemingly inevitable, what's the hit going to be? GL is not a straight talker when it comes to this. Look at the 13-Jun RNS in detail. The implications of the loan notes are strewn throughout different parts of it as if to be intentionally obfuscatory.
It's so frustrating and disappointing to see SOU value trickling like water into desert sand. Meanwhile, everyone's focused on Calvalley and twitter pics of LNG tanks. I've been saying to watch the creeping dilution for the past couple of years now. It's still the elephant in the room.
Even the most die hard ‘head in the sanders’ can’t fail to see how utterly moronic GLs last (and likely next) fund raise was. Read the latest RNS. A wave of interest conversions to come (totalling 210m shares at todays sp) that at the current sp account for 11-12% mcap, when the sp is back at 0.6p next Friday after 30m sales next week, it would represent 17% mcap dilution coming down the tracks soon. Dilution is what will kill SHs here, delays and dilution go hand in hand. All a result of zero delivery by management. All talk no delivery. Gonna be a fun short week next week…..eek…