Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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Your comment about shareholders is a tad insulting. The likes of Gib,corbs, ricky myself and others have been invested in SRL for years. We have not done so with their eyes closed. It has long been considered that Pala would want to sell. That is their mo. Invest, give their expertise to the subject company in which they have invested, help turn it round and sell their stake (the evidence is on their own website). What no one thought is that they would organise a sale of the company (for we are all sure that is what has happened) at a time when production was beginning to escalate and prices for rutile had begun to harden and that the company would soon be back in profit, and not seek a decent price for their shares and the shares of all other shareholders. Further we did not foresee that the SRL broad would be complicit in a sale at a low price without recourse to independent advice which is what the board sought in 2011 when Pala offered 6 pence less for the company than they are getting now and were turned down. The circumstances leave a bad taste in the mouth and not in our eyes. Why did Pala do it? Did they have to has crossed my mind.
I agree that this is a really low ball offer. Mirabaud has issued a note on Kennare today saying: "there are now clear signs the recovery in product prices is under way, and we regard this week�s takeover offer for Sierra Rutile for cash as a sign that an informed player (Iluka) believes the window of opportunity to acquire assets cheaply is closing. However, although a well run company with good assets, minority shareholders (non-Pala, Neon etc) in SRX have no say in the end game and you bought the shares with your eyes open, knowing that this was not a typical listed company. I suspect Pala wanted out having been invested for 5 years, through the long downturn, although I am surprised at the price given that mineral sands seem to be turning and the company has executed its expansion projects so efficiently. The other potential issue is that the main SR pit, I believe, will be coming to the end of its life in the next few years and consequently substantial investment would be required to develop the next pit. Perhaps Pala was not prepared to commit the time and capital required? My strategy is likely to be to take the 36p and reinvest the proceeds in Iluka. I would prefer to keep a � investment, but don't have any confidence in Kenmare management.
It shows that you read it properly!! I must have caught you attention. It should have read 4 and not three. I only got 2 O levels in Mathematics or perhaps there were three or may be four. Are you proposing to fund a High Court action which would include an application to restrain the board from moving forward to complete the deal or are you moving to fund a higher offer for the company? Either way you will need a lawyer. Start with a resolution under the Companies Act where you need 5% of the issued share cap to call a resolution and work out what you r resolution or resolutions may be.
In your post you reckon they have to sell for 3 reasons (all of which are reasonable) and then you quote 4 reasons. Hmmm. That doesn't add up. Makes as much sense as the Iluka deal.
So after all the posts that are frustrated, angry, factual and accurate, is there grounds to take legal action against the Directors? Of course there is. To endorse what was countered when Gib hoped that another bid may come in - irrevocable means irrevocable. It's done. In my mind there is absolutely no doubt that the Directors have breached their responsibilities as Directors in 'folding' to PALA. The major shareholder. As also mentioned earlier, where was the RNS (within the correct timescale) advising that Iluka had purchased a substantial share holding within SRX a number of days ago? If anyone has a top drawer Firm of Corporate Solicitors, let me know. In a Court of Law the word 'proven' is all important. How would it ever be proven that it was a stitch up. If we had that top drawer Firm of course we would win hands down without a doubt. Sadly for us if it was that simple M&G etc would have done just that.
No need to apologise. There is a lot of frustration for long termers. I feel particularly sorry for Gibraltar and Corbine. I do not know how many Corbine has but Gibraltar has a load (c1%). We have seen the price at 80 pence and watched former directors paying 50-60 pence a share and those directors have been directors of Pala. And so one is entitled to think that the offer undervalues the company; it is logical to think that way. And so you have to think of the whys and wherefores as to why Pala are prepared to accept just 36 pence. And we are also entitled to wonder why we as shareholders are not entitled to have the directors get independent advice on the value of the company as the directors did when Pala offered 30 pence (just 6 pence less than Pala are prepared to accept now). That would not happen with a proper company. Either Pala and their directors did not really know the value of what they were dealing with; hence even their offer of 30 pence was at an overvalue which does not give much confidence in the ability of their directors. Or they have to sell and that imo can be for one of three reasons. First they have realised that with Sierra Rutile they did not understand the reality of the company and should not have invested in the first place. Second they are bored with their investment. Third they have an alternative proposition to invest in and want out of SRX to invest in something else and do not have the funds elsewhere for that project. Fourth they are in trouble and need to raise money urgently; hence a fire sale. What ever is the reason the board should act in the interests of ALL the shareholders. Given the reaction on this thread they have not. That view is imo supported by the fact that M&G and JP Morgan have not themselves given irrevocable undertakings in respect of their holdings. What ever the reason may be, I will never invest in a company in which Pala Investments are involved at any time in the future; nor will I ever invest in a public company where their home jurisdiction is BVI nor will I ever invest in a company where any of the SRX directors appear to be directors of the company I might be looking at. And so to those extents I agree with you. I have a colleague who has a mound of GKP. I may have a couple of other investments which I may recommend on a DYOR basis in a few days but I do not want any one to suffer in any way. The market is a gamble, AIM is under regulated . The authorities are spineless. They do little to protect the private investor. The advisers get their fees from the companies they represent so that means that they are always protecting their own position and so and so on. Doctors, solicitors, barristers, dentists and to an extent accountants and IFAs are heavily regulated. Nomads no; the FCA no; brokers no and by no I mean that they fill out forms but that appears to be that. Professional people I use take their duties seriously.End of lectur
Daramuda Apologies for my earlier post. Let my frustration at the seeming senselessness of this annoy me. I am seeing something crazier over at Gulf Keystone (GKP) where I am also invested and both of these, happening in same week has annoyed me - or more accurately the apparent helplessness of the PI.
Gib always said that the key was Pala. I think that you may be right mhair and also Pala could get no more from anyone else. We and others including past directors felt the company, infrastructure and the quantity and quality of the resource was worth more but if no one was prepared to pay the price everyone thought that it was worth better a bird in the hand. Sisay told me at the agm held July 2015 that he wanted to increase liquidity and see the company move to the main market. That proved a non starter possibly because they could not raise more money/shareholders earlier this year or maybe he did not have the acumen and experience to effect it. They landed up with three corporate brokers; perhaps that said it all. It would be good if there was a white knight but surely if there was one that knight would have appeared.
It may well be that Pala are short of cash and had to sell which would explain the very strange timing of this. Lorich has had an annus horriblis with his mining stocks and maybe it was something of a forced sale not that that does any of us much good.
Here's a thought.... if you were invested in an illiquid investment and you saw an investment opportunity that may potentially 10 bag, would you take an 'out' at approximately 100% profit? That maybe why Pala are happy to move on, better opportunities elsewhere.
Unlikely as I read the release. A majority of votes is enough to carry the day at a meeting the date of which meeting have not been disclosed, Pala and Neon having given irrevocable undertakings in respect of their stock. Having settled down a bit, it is possible that Pala could not find any party who was willing to stump up more than 215 million for the company. They wanted out. It is possible that the price offered by ANOther in November 2013 was well down on the then price per share which at the time was 60 pence. It is possible that the deal to buy in that Pala effected in 2010/11 was not as good as they had thought. If an attempt is made to upset the deal one would need to exhaust Companies Act remedies first imo and one needs to have 5% to apply for a resolution. If you have connections within M&G and or JPMorgan it may be worth while getting in touch; I do not unfortunately.
tHE ISSUED STOCK AT 20P NOT SO LONG AGO. I WONDER IF SOME PAST DIRECTOR USED THIS OPORTUNITY TO MITIGATE ANY LOSSES FROM HIGHER PRICES PAID EARLIER?
Only hope now is another bid from someone who understands that there is so much more value in this stock.
Add the fact that it looks as if the Chinese were not as interested as some of us thought!!!!!
obritomf - many of us have been invested in this stock since say 2011 - corbs and Gib probably longer. Pala's normal MO is to take a financial interest give their expertise and sell out with a 3X return on their investment/. Sometime last year I calculated that over the years Pala's average was circa 17pence a figure with which Gib did not disagree (or so he posted at the time). Whilst many had a value higher than what would be 51pence on my calculation, they seemed to know more about the company than me. As corbs states Jan Castro was paying 50-55 pence per share before he stood down as chairman. Barton took over and he has now gone and left without any notice. The board was changed to make it "more independent". At least in 2011 when Pala offered 30 pence a share for the rest of the share cap it did not own as corbs says the matter was referred for independent advice. Now nothing but why. Why after all their hard work is Pala selling at a figure which looks insufficient. Was the figure offered in 2013 about the same. Cannot they get more? It is not as simple as saying big boys little boys or doing a Winnifrith and accusing the City of this and that. It is why have Pala sold so cheaply - nothing more nothing less. It makes no sense. And why have JP Morgan and M & G not given irrevocable undertakings?
The why is easy. Money. That and the fact that private investors don't count for anything. How? This looks like a classic stitch-up by the big boys. Don't expect the toothless Stock Exchange to do anything about it, though.
and how many of the pala/srx directors-castro and others were buying stock 40-60p? not so long back?
but I cannot see what us relative small fry can do. We speak for less than 5%. But why did not JP Morgan and M & G add their names to the irrevocable undertakings given to Iluka in respect of their stock?
I am simply speechless and have nothing to add. We have been sold down the river and I simply cannot understand how or why.
srx changed the bvi rules years ago if not txr did, and it was removed from web site circa 2011 ish?. i recall commenting on it a long time back-gave srx more ways to sell out, re admission doc, before the web was updated to modern srx one. anyway this deal is a pile of horse shiit imo. focussing on recent prices -yeh and? current price weighting means nothing, valimir iorich and srx dont need the money right now and the turnaround is not complete. srx have not reaped the benefits at this time from the expansion still ongoing. sisays changed his tune from previous buy out. lst time he advised against it, were better placed and futures better and this time we get nothing saying get lost. what a joke not happy and not playing ball. this co is worth multiples of sp even now, unless world went into big reccession next 6 months grubby lluka not happy
The shares that are sold at 34.75-35 will be picked up and those buyers will wait for the 36% and get a small uplift. tigerwoody - there is nothing that you have to do. On the basis that the deal completes the 36 pence per share will come to you. No response from Gib or Corbs both of whom must be flabbergasted by the news. Perhaps Pala have calls on them or perhaps they have found something better in which to invest. After 6 years they have doubled their money. I thought that their criteria would be a minimum of 3X.
So what happens now? Is that it? Do we have to sell what we have or can we hang on to what we have and sell later?
Now we know why they issued shares at 20p a few months ago - basically so that Pala could trouser some additional profit on the Iluka deal !!!!
If I have read it right they have 36 million shares - release to the market this morning. If part of those shares were acquired Friday 3 weeks ago why a disclosure only now? Do the rule as to disclosure only apply to UK companies? I doubt it.
from Pala and Neon Liberty who between them speak for 59% but not from the other iis. Might anyone else get busy?