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The clock is ticking away on the rights issue or placement to some strategic buyer to be in line with the debt restructure. I think they have to complete a rights issue by/before November, and SF's standstill ends around 25 November. To complete a rights issue in 2 months, they should set the ball rolling atleast now.

Rival bidders would have been DP World (because weirdly enough they got into oil and gas service by acquiring Renaissance) and Saudi based Bahri which runs the tankers for Aramco; but if they haven't shown any interest till now, I doubt they would come in now since SF has a blocking stake

https://cf-cdn.nmc.ae/Uploads/InvestorRelations/all-lender-call-presentation-19-aug-2020-e0436784-fae0-4d99-a9b6-2b2b24714448.pdf

Thanks Albatrox. So that puts to rest the possibility that Seafox had bought those shares.

I don't know about the loan getting paid through operational cash flow, atleast in the short term - need that rights issue (which is an overhang on the stock and puts a cap on the gains) to reduce debt. The board has a deadline to raise the $75m, and will be interesting to see how this evolves - will Seafox be ok with this scenario where they have to inject the largest chunk of cash? Or will they make an offer that the board sees as acceptable? Will be an interesting....

Can they do that? They can not make an official bid till they wait till November, but can they buy and trigger an MTO? I am not sure

Someone just sold (and obviously someone bought) a 2m block at 10.875....equivalent to 0.6% of outstanding. Mazroui buying up more?

Guess we are back to the silent period till the 6month period ends in November....

Not sure if this is a good or bad thing......on the face of it, I don't like it

I think I worded it wrong. What I meant was that there was no short term catalyst to buy this now (other than the possibility of a takeover) given the board power struggle, pending rights issue which is likely to shake some minority shareholders to sell etc. There is no guarantee of a 22p bid just looking at how the bid process has panned out: 7p bid followed by 10p bid and "no increment statement" followed by buying 9% at 22p.

Agree with you that the earnings is looking good and these are good prices, and if they sustain this, its worth more than the 22p .

The only guys who need to vote against Seafox are acting in concert with them - i doubt earnings will change their mind. Exciting day nevertheless! Also don't think better earnings will bring in incremental buyers and push up prices - only reason why anyone buys this today is for a takeover.

Any thoughts on how this is going to play out tomorrow? Was interesting to note that release last week on the bank's support for the current board and their statement that there won't be any negotiations on the restructuring.....

@driveat - very valid argument that Seafox stake helped push the board level changes and the management change last year (FYI I did vote for them in that AGM). However, s**t had hit the fan in late December 2018 (pre Seafox entry) and the changes were bound to happen as well with banks breathing down their neck.

But on this vote, if I were Mazrui, I would vote against it and make Seafox pay a premium to buy me out when the 6month standstill ends......unless of course Mazrui wants to stay invested with whatever value creation plans Seafox brings to the table :)

Considering the fact that only 85% shareholders voted, and Seafox & Co was 48% or 49% of the company, not surprised with their majority and the outcome. Mazroui did vote against the 10p bid; perhaps there is a 22p or higher bid coming and they want to take it. The poison pill would have made it difficult for Seafox to win in a second round bid I guess. That is my understanding. Any other thoughts?

But yes, this is a distraction to management and board, if the above hypothesis is incorrect. But the stock is at 12p - risk/reward looks ok

Its not just the directors, but also the poison pills on the agenda - will they get enough votes to push them through? Interesting end gam

Finally managed to read the AGM invite and the agenda. Check out Resolution 12 and 16 - basically grants the BoD the right to issue new securities upto 33% of outstanding (possibly to strategic investor), and a rights offering of upto 33% outstanding. I can see why Seafox picked up the 30% stake - they might want to block these resolutions, which would dilute their powers.

Also, if they are expanding the capital by 67% through both the measures above, the dilution to existing shareholders is 40% - which is not bad at all. Back of the envelope calculation - if they raise $75m by diluting existing investors by 40%, the post issue theoretical price would be 25p. Is that right?

I suspect that most likely the sellers are Ithmaar, plus some other shareholders who don't figure in the list.
I doubt Seafox has the firepower to make a bid for the remaining 70% at 22pence (~GBP 55m) on their own

Yes, it was a disappointing share price move, obviously because rights issue reduces the equity upside. So if there is no acquisition, and there is a rights issue at current prices to pare the debt, the upside to equity holders drops significantly.

Seafox is in an interesting situation. Their intention is clear - acquire GMS. But what is the price they are willing to pay? I am wondering if that 'supply chain & logistics agreement' with UAE based Zakher Marine means something more - will they come as a strategic investor in a rights issue? If that is the case, Seafox won't be in a good position as they appear to be a strategic investor, which means a buyout even at 22p might start to make sense for them.

@jlovie - i believe they have to take a waiver from independent shareholders. Seafox has specifically referred to this in their no-bid announcement (point C). The takeover code is a 400page spaghetti junction of legal terms :)

That is a good summary GruffJ. It is hard to read the intentions of Seafox, when on one hand they said no increment to the 10p, and then they buy 9% for 22p. Perhaps their play now is to hold 30% and get a seat on the board and push for some sort of merger with Seafox. Just playing the devils advocate here - wouldn't mind selling at 22p and would welcome the bid. Or perhaps them and Perella Weinberg underestimated the shareholder pushback on this

On the bid side, they can only make a bid within 6months under the following scenarios:
1. with board's blessings - rule this out
2. third party bid - possible, but a very likely scenario
3. 'whitewash' proposal - guess this is the rights issue or strategic investor coming in. My personal view is that they would try to bring onboard an investor at 20p or so, instead of doing a rights issue which would be very dilutive (they want to raise USD 75m i believe) at current prices
4. material change of circumstances - perhaps the bank debt agreement. But this would be linked to a rights issue or a strategic investor coming in at a higher price

Again, the 29% stake gives them some power on decision making I would think.

Also it was Belhoul who said he would not consider below 20p, and it seems that he has sold his shares in the last Seafox trade (number of shares he disclosed matches almost 100% the shares bought by Seafox)

Its a bit odd that we don't know who the seller is....9% bought at 22p. They can make a bid within 6 months only with the approval of the board, or if someone else makes a bid.

Someone mentioned in the forum that the trades from Tuesday at 22p were reversed. Couldn't find this data though......also doesnt make sense in light of the disclosure today

Seafox made the "no intention to bid" announcement last week, which means they can not make a bid for 6months (except in certain circumstances, which I am not aware of what they are). But these are large blocks - so who is the seller?