Rainbow Rare Earths Phalaborwa project shaping up to be one of the lowest cost producers globally. Watch the video here.
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I’m not an investor with this share, however Mike Ashley Is currently at their head office
Do I remember rightly that Ashley made an offer for STU a while back, but the BOD and some shareholders refused saying it undervalued the company?
I think I’d be interested if I worked at Studio and wondered where my next pay check was coming from
This is a strong business, all it needs is one offer from PE and that will make Mike Ashley to act. If you sold parts of Studio now you will get a lot more then £100m. Just my thoughts.
Ashley is astute. He may take the company into the Frasers Group fold, but he'll do it cheaply and certainly won't be bailing out existing shareholders imo.
He did try do exactly that with Debenhams (save the company for all shareholders). Often there are too many parties with diverging interests....Directors, Bond holders, banks etc. Quite often a pre-pack is already agreed and no competitive tender is held.
Debenhams was a disgrace. Refused any offer by Ashley and the brand was bought out by BOO. The employees lost their jobs and pensions and will go into the lifeboat scheme which pays out about 50% on average over the pension term (90% at start but no or very small yearly increase so it falls away quickly over time
I’m not sure it is very fair to compare studio to Debenhams, one is still forecasting to make near their record profits for the year and the other was a department store plagued with high lease costs as customers were moving away from physical stores.
I think people are jumping the gun here, the rns states they are intending to appoint administrators, but it is a few days on now and still no confirmation that they have actually entered into administration which should tell you that something is going on in the background.
I suspect there will be a resolution on this tomorrow, or if not by Friday at the latest. If a company is making £30m a year and realistically can be picked up for £100m or less even with short term cash flow issues there will be buyers rubbing their hands together and queueing up. All parties involved will be trying to avoid administration in this case.
This will either be sold as a going concern, or there will be some form of equity financing deal agreed. I don’t think it will even reach administration.
People see the term administration and think of high profile cases like Debenhams and think that means it is the end, but that’s not necessarily the case especially when a company is profit making and still has substantial net assets excluding intangibles.
I’ve no position here although I did consider it at times, If you are a shareholder you will no doubt end up having to take a hit, but if you are an employee worried about your pay check I wouldn’t be too concerned personally.