Member Info for 4Corners

I love the healthy debates here.....encouraging. The concern on the minorities being shafted is real - there is nothing to give us comfort that the board is acting in the interests of EVERYONE - each one of them is selected and appointed by Seafox, including the so called independent, and their allegiance lies with Seafox. And this is the biggest risk today, not operations.

@sirimcbonus - thanks for highlighting the points - fully agree

@AA2020 - ok with the capital raise, just not ok with the terms. Valuing it at 3p, when its trading at 7p, is just shafting the minority . This is a company they tried to buy some shares at 18p in 2019, and buy all at 10p in 2020, and bought a nice chunk at 22p only 12months ago. The amount raised is GBP 20m, and are we to believe that the board that negotiated an annual saving of $25m in interest cost can not raise new capital without giving new investors/underwriters a steep discount? Are we to believe that they could not convince institutional investors that the pre-money valuation is GBP 25m when things are looking bright? I would prefer for the VOTE to FAIL, warrants get issued, and EVERYONE gets diluted. OR push for liquidation and sell the assets - that would need special resolution which needs 75% vote (but correct me if I am wrong). I would also VOTE against re-electing the board - they have done a lousy job.

The timing of the issue - 9 june announcement, with date of record of 7 june - ensuring noone buys it to block the deal. And a 25 june general meeting to approve it when the capital raise closes on 23 june - that is some f**ed up timeline....isnt there regulation surrounding these? FCA sleeping at the wheel, as usual, till the boys from UAE rip off shareholders (remember NMC and Finablr?)

140m shares traded on 9 and 10 june combined - that is 40% of current shares in circulation - who are the new incoming shareholders? How did the board line up institutional investors to cover the open offer by 5PM on the 9th of June, the day it was announced?

BOTTOMLINE: SF wants maximum dilution so as to have fragmented ownership.The board is comprised of SF allies - in effect they control the company. I am scratching my head too as to why they haven't bought out the company if it was that great. Makes me extremely nervous. My thesis is that they wanted to make a bid at 10p, which would not have passed. 20p bid would have gotten approvals, but thats perhaps too much for SF - honestly it isn't. Will they make a new bid at 15p (7p post raise)? Time will tell. Will it get approved? Absolutely!

@sean Yes, not sure how many agree with our view. Also not sure if SF and friends have 50% of the votes since I dont see Horizon subscribing to the issue, although this could be to make it look like they are not acting in concert.

believe new shares start trading on 28 June.
And the AGM is on 30 June

@ seanx - the raise will fail ONLY if shareholders on record as of 7 June vote against it. The capital increase money has already been committed - 45% from Seafox, and the other 55% is covered by institutional investors if shareholders don't take up full allocation.

Voting against the capital raise is not a bad thing- theoretically you can not get less than 3p in such a scenario vs there are no guarantees on what you will make after the capital increase.

Why is it not trading at a higher price then, if everyone knows about the EBITDA for this year? Oddly enough, the new mgmt has not given any guidance or done an investor call or presentation, which has been the usual practice (and is standard for listed companies) since IPO.

Fergusinv - you are spot on. The question I asked myself is "are there better opportunities with lower risk of minority getting shafted".Personally think its a great opportunity with oil at current levels, but by scaring away institutional investors, this will remain a not so well bid stock, in my view.

on the bright side, we have millions of shares traded these days :))

@ AA2020 - always look forward to your well thought out and structured comments (ib background?)

I am undecided about my allocation - its a sizeable chunk. I am definitely VOTING AGAINST the capital raise though, and I would recommend the 55% of holders to do so – you can not lose more than 3p ??

" give comfort to the underwriter Panmure that they wouldn't be left holding a significant chunk of shares" (some doubts about the IB background now). The discounts don't matter, because the share price will adjust. And not like they are sitting on a big discount now to the offer price. Its all about the amount they are raising - the right question is "is panmure happy to hold $15.4m (55% of 28m) if enough institutional investors don’t bid in the offering?” and it seems they have been taken up by institutional investors already. Did you notice the 5pm deadline for bids? I guess SF already lined up someone

Messrs Aberforth - if you believe the prospectus, they will hold same number of shares post the raise. So perhaps they sold at 3.2 levels and will subscribe at 3p. I dont know why they hold it in their portfolio – miniscule. Do note however, that Mazroui has increased their stake at the 6 or 7p levels in April (they are an insider who definitely knew about the 3p) by purchasing from Aberforth. Makes me wonder if they have a ‘vote issue’ on the 25th

I do not debate on the value. There is definitely value, but so far my thesis on the fact that the board will screw minority has played out, and I don’t expect that to change.

I like how you said 5p – do u know something? So if you do the calculations, you will see that a 5p bid post-capital raise is the same as a 10p bid pre-capital raise and SF injecting $25m into the company. So that is the base case scenario, if they want to make a bid. Now, remember the 22p transaction for 8%? The equivalent of that would be 9p post-capital raise. My guess is that the bid, if they do decide to bid, will be somewhere between 5p and 9p. Each 1p = $10m off the purchase price. Most likely, they will have diluted all the previous investors who opposed the bid at 10p, replaced them with their ‘friends’ coming in at 3p, and make a bid which will be approved. Maybe I give too much credit to their financial engineering, but Seafox chairman is an ibanker, and so is Man Capital representative who joined the board last year (only to resign in few weeks).

Of course, I can think of multiple other ways for SF to screw us all. But since they have friends in the game, perhaps they will be a little nice to us, eh?

you have decided to throw good money after bad?

Still doesn't explain the prints in last two days of over 100million shares. Guessing Castro is out as well. Also should be seeing who the new shareholders are, if they are not shady middle eastern funds or investors affiliated with SF or Man Capital

Some serious prints today....did all the existing investors sell out?shares in circulation is only 350m, unless SF lend their shares to their friends for a quick short. But then, who is buying?

55m+ shares traded today - not much in $ terms, but this is sizeable part of pre-capital increase free float

@bigsmoke - marketcap is GBP 31m since the stock is trading ex.
For the ones who asked what happens if price goes below 3p, existing investors who intend to participate in the raise should buy it from the market and skip the open offer. Institutional investors have already covered the issue at 3p, so the raise is happening

Yes, shareholders knew a raise was in front of them, just not at 50%+ discount to market price!!!! I would think the price matters, especially given the announcement that the 371m ‘placing’ shares (the non SF&Co. portion of the 666m new shares) have been lapped up by institutional investors. Why not raise at 1p then? Or 10p? Yes, par value is just for accounting purpose, but I don’t think they needed to price this at 3p! Sinister motive behind this? Time will tell.

I guess you don’t appreciate my humour when I said ‘billions of shares’; anyways I thought it was funny there were issuing 700m shares to raise…….GBP 20m


The timing of the shareholder meet to approve the deal on 24 June……wow! “Guys…..thanks for putting in 3p/share. Should we go ahead and issue these shares?” Plus they made the announcement and conveniently placed the date of record two days prior, so that no one could buy and block the raise.Imagine if the trades of today had happened prior to record day – 40m shares traded today, and counting. That is a big chunk of existing freefloat. Sneaky bastards on the board without a doubt.

Did you read the document? Interestingly SeaFox is listed as a competitor. Remember last year when they said they are not competitors? Another interesting point is that vessels are valued at $500m - isn't there a case for someone to push for liquidation when mcap is $25m and debt is $400m?

I recommend to VOTE AGAINST THE DEAL as it seems they may not have enough votes without Horizon Energy

@Matthew125 - that was me being sarcastic - the best I could do on a painful day.
@ CaptNemo – anyone willing to pick 2m shares in a single trade would know what’s coming (I think)

The board could have done a raise at 5 or 6p, instead they choose 3p so as to dilute minority investors. Always believed that this board is there to rubberstamp SF’s decisions. See significant value in the stock, but SF’s rubber ducks will put a cap on share price gains through continuous frustrating actions.

SeaFox to everyone: Would you mind selling your shares at 10p now?

Hey AA - doubt Lord Rubberstamp cares - most like a retirement gig for him. He is also the chairman of IDH, an egyptian healthcare company in which SF owns a stake and is listed on LSE. On the plus side, that company appears to be well run, with the founders still owning a sizeable chunk.
Lack of investor presentation or details on the capital raise (even if saying "its not ready yet, but here is the timeline or the planned process") indicate that they absolutely don't give a rats ass about the rest of the shareholders. Part of the 'frustrate minority' playbook. We are about to be taken for a ride.

No doubt that the capital raise won't happen. Not sure if they can do an accelerated institutional placement since the board doesn't have the authority (in fact this is on the AGM agenda), and I am not sure they can wrap up something with all shareholders in under a month. The first option would be great if they can place at a higher price (less dilution to minorities). If those are not the options on the table, most likely some sort of bid next week (low ball ofcourse)

Courtesy BBG alerts

Hopefully something this coming week, but the "7th June" target date to publish the annual report seems to coincide with the the 12month anniversary of the 22p transaction. Anyways, the way things are calm indicates something is up, or that all is well and taken care of :)