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It’s tailwinds net debt, Serica with tailwind is net cash
Tailwind net debt 30/11/22 £277m
Tailwind net debt today £215m
I think the tailwind cash generation is even better than the above suggests as read on here that Tailwind paid a dividend after 30/11/2022 but before the deal completed.
Tailwind has tax credits to use against losses incurred in previous accounting period, so not so much of an impact with tailwind.
Del = deal
Didn’t tailwind pay a dividend between 30/11/2023 and todays del completion? Anyone remember how much it was?
Glaglth
Mercuria have stated that they wish to move away from fosil fuels in the short term. So it goes back to Serica now having more diverse package to sell on. So we could still see four pounds again in quite a short space of time inmv. After all they will be looking at a return on their investment. Not unlike like the rest of us.Having said that if they can grow the company together with dividends and a share price above three pounds in the short term then for me that would suffice.
Not blind faith Banbury. I do this for a living and blind faith is a trait lost decades ago as a youngster. Just happy to counter consensus and point to the other aspect of an argument. Fine margins permeate very investment opportunity. All the best!
Hi Norma
To be fair NKOTB did say on the positive side debt is down. So gave both sides of the argument.
I'm sorry but if our comments find them guilty before they have a chance to prove they are innocent.
Your past months of postings are very rose tinted, no qualms no suspicion of any hidden agenda or skullduggery. No crime committed and no surveillance for anything unusual all all in all a good value adding combination..
Perhaps reality lies somwhere between your "blind faith" and our don't trust this mob with there own granny.
I really hope so for all our sakes.
15th April will be interesting. I suspect Tailwinds ramp up will have stalled and we will all question why when Mitch knew he did not stop the deal !! Yes guilty let's hope they prove their innocence and we can move on :)
Norma,
TW (Mercuria's) modus operandi was to take-on debt and pay high yields, SQZ modus operandi was to have zero debt and pay conservative yields, let's see which way the wind blows on this one. As for balloon, any increase in debt will not be well received by the market particularity given the cash generated, all hinges on the details / terms on how SQZ's next acquisitions are financed. You can be almost 100% certain it will not be with SQZ shares in any shape or form that will compromise Mercuria's hold on SQZ so that leaves cash / debt / PSA.
I have previously posted my thoughts on the 'style' I would expect / hope to see SQZ move forward with in terms of acquisitions .
Over to Mitch & Co now to prove which side one's bread is buttered.
aimo & dyor
Don't you just love it; Energean has a market cap of £2.19bn with $737m revenue and net debt of $2.52bn! and they paid the Italian govt $119m windfall tax.
Serica: Market cap of £606m, ~$750m revenue, no debt and probably £500m cash as at 31/12/22 Is it me?
Using equity to buy Tailwind was ok IMO because both companies were undervalued. Both struggling with negative sentiment due to being in North Sea, both in oil/gas sector. Tailwind seems to be generating a lot of cash, so think it'll eventually become clear to everyone that deal was good one.
But I'd say taking another acquisition must require taking on debt. Unfortunately, obtaining loans has been made much more difficult with all the tax uncertainties.
Mercuria's position is they have said they won't invest in long term fossil fuel projects and half of their investments will be in alternative energy by 2025. That's fine by me- I like strategy of short term projects. But Mercuria are trying to fairly aggressively move away from oil and gas.
So I think the story of the RNS here is that it's the BOD that are trying to keep Mercuria involved in Serica, rather than Mercuria pushing the BOD to stay involved.
For balance SQZ have stated, "execute further acquisitions and make sustained cash returns to shareholders.."
All eyes on dividend policy and actual returns / yield, but for me their next move into acquisitions has to signal a real game changer that will restore my confidence here offering substantial growth opportunity for our SP.
aimo & dyor
Hello NewK. Fair point, but that doesn’t make it a ‘stitch up’. Also just commented on your debt observation. Atb to you too.
Why would it balloon at current interest rates? Is ballooning 2x 3x current levels on your opinion?
The debt levels out there in the corporate world, especially the non-bank lending, could well come to a head before too long. If the dominoes fall the wrong way, 2008 will look like a warm-up act. Allowing debt to balloon at this point would be irrational and insane…that doesn’t rule it out but I struggle to see it.
Norma,
Afternoon,
"they’re always guilty before the chance to prove their innocence...." maybe so, however ....
They could have stated Offtake Agreement was concluded on more favourable terms than the one it replaces, didn't need company sensitive information, just direction would have done. Instead they cover their rears by shifting onus (excuse) to others, "The directors consider, having consulted with the Company's Nominated Adviser, Peel Hunt, that the terms of the revised Offtake and Marketing Agreement are fair and reasonable insofar as the Company's shareholders are concerned..."
For me, this has already started to play out as expected, Mitch & Co are just puppets to the puppet Master, Mercuria. Just my view, fwiw. atb
aimo & dyor
Upomega,
"At the current rate debt will be clear at the end of year.."
Not a chance imo, if anything set to balloon.
OLD SQZ debt adverse, NEW SQZ (Mercuria) ....let's see shall we !
aimo & dyor
Ffs…they’re always guilty before the chance to prove their innocence.
At the current rate debt will be clear at the end of year. Hopefully the share price will start to reflect this.
A revised offtake and marketing agreement?
Is it on better or worse terms than the one already in place?
Will we ever find out?
On a positive note, the net debt is down £62m from announcement of the deal to completion.
Net debt on 30th of November was £277m.
Net debt on completion £215m
Watching.
Offtake and Marketing Agreement .... stitch-up Number 1 !!!
aimo & dyor
Vultures circling!
I feel I've lost a fiver and found a penny.
To be fair, the presentation was for new investors, not shareholders, so I wouldn't expect an announcement about dividends at this event.
Indeed, daft questions from one audience member. Scary such people are making investment decisions.
Whether or not the BoD feels any loyalty to extant shareholders will be evident soon.
I am still here, as I consider my rather large yearly dividend keeps my interest. 10 years to recover the capital loss if we stall here. Seriously though, a reduction in dividend would not be good news and I wait with baited breath with regard to Mercure's tranche - pity they weren't classified as nil divi.
No I am not taking a pop at you NormaStits. Its the whole situation I am angry about. To me It is now coming across that we cannot expect much in terms of a dividend. This bod seems to have forgotten their original share holder base. To me they are acting as if they have just ipoed.
Are you popping at me there upomega? I hope not, we’ve been there before. There seems to be some anger about a yet-to-be-announced dividend? Struth, just wait until something is said rather than fantasising.
ive just started. Im sure the house broker stooges will have a fantastic educated slant on all of this. Facts speak for themselves. The share price has crashed inmho
To all the wokes out there. Do you honestly think that misleading comments made by the bod and backed up by their stooges via bb such as this will simply be forgotten. Well think again it wont. As far as i am concerned they promissed a progressive dividend and that is what we should get.
No one takes me for mug least of all hippy wokes working from home.
Anyway any fat s..x changed non uk citezens out there who likes to inform us of what a cr...p country we are now turning into.I will vote for you. Especially if you make it a capital offernce for not paying the license fee.
Sericas biggest worry now is what will UKplc do if the Ukraine war comes to an end. Hmm let me think another strain of covid. cant wait.