Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
If HBR have any interest in SL, they should just take out RKH. It's an Aim share, no takeover premium, USD 50-60m or so would do it, and then voila they've got 100% and can farm down to a more compelling partner. And if this were the case, they would have done it ages ago before OM arbitration result hits, just in case OM goes in RKH's favour and HBR all of a sudden have to pay a bit more for that arbitration cash result. But on the other hand, HBR ditching SL would result in a big hit to HBR's 2C resources. A lottery ticket indeed.
This might be completely rubbish - but is there not a regulatory deadline of some sort to report H1 results by end of September? They are not idiots. No reason why they can't publish a reporting date. One has to assume they consciously choose not to. Any why would that be? To frustrate everyone, keep share price down, etc. And then come in with a lowball bid. Time will tell, and I hope I'm wrong.
Agree with 4C on this. MCATEE - I think few doubt the fundamental merits of the business and the turnaround story which you rightly point out. That's why I'm invested here to begin with. Question is why the market has not yet recognised it, as this is all public knowledge. I suspect the fear is around ultimate SF/ManCap motivations. Are they truly aligned with minority holders. Probably not entirely. Will there be an attempted low-ball bid at some point?
Highly possible. Ultimately the market is clearly taking a wait and see, show me the money first approach. That may take a good year or two. Plus there is also the dangling dilution knife of a (still as of now officially required) $50m equity raise by end 2022. Let's hope upcoming H1 results slowly begin to change the market sentiment.
Everything clearly appears structured (either intentionally or otherwise) such that post the $700m shareholder returns, the share price, if trading at NO discount to NAV, is around about the current level we see now (c. 190-200p). Obviously based on the to-be-reduced share count. At least on my numbers (which have been shaped a little by some of the SOTP valuations by the sell-side analysts I've seen). So, expect a big uptick once India cash in the bag, then a drop back to current levels once it goes ex-div (or more so, and then back up to current levels as the buyback commences). This also assumes the gap to NAV is fully closed - a likely optimistic assumption.
Anyone know what the interim period adjustment is on the purchase price for the Egypt acquisition? The headline price net to Cairn is $323m. But effective date is 1 JAN 2020, so would have thought final cash price is much reduced. But presentation from yesterday says pre-completion payment of $302m.....which would imply fu** all in terms of the interim period cashflows over last 18+ months
Any guesses on what the annual dividend is likely to be? On my maths, they're currently generating FCFE of c. USD 2.0bn per annum. They also keep comparing themselves to Aker and Lundin. So I'm guessing in the region of USD 500m (hopefully).
A tiny amount indeed. But what may be more interesting is the fact that he wouldn't be allowed to buy (insider trading!) if he were aware of an upcoming bid by SF (low ball bid or otherwise) of which he is of course also Chairman.
Indeed the market really hates the Egypt deal. Whatever your stance on long term pivot to gas, it would be a less bad deal if they actually had bloody proper exposure to the gas price. But no, instead they are locked into a single client for the gas and at an artificially low fixed price with limited or no upside gas price exposure. At a time when gas prices are now rocketing. It's all madness.
Great news. The management keep painting a very positive picture of the turnaround and recovery. You wouldn't really want to be doing that if your masters are about to make a low ball bid. Time will tell if perhaps SF/ManCap are genuinely looking to create value here for all equity shareholders after all.
Wow, so that's 55.59% between SF and Mazrui. How the two of them are not being classed as acting in concert during this whole situation is nuts.
Now to figure out the composition of the other 44.41%. I think we can safely assume Aberforth are indeed out of the picture entirely now. They went to 0% and there was speculation they used the proceeds to take up their share of the placing. If no TR1 by tomorrow then they must indeed be fully out. There is no TR1 in relation to Castro's exit - so they must still be here.
In my mind, what is done is done. The capital raise will obviously all go ahead. Looking forward, the big risk as I see it is SF and friends swoop in and bid for the company at a low ball price, like last time. Albeit this time, at somewhere between 5-7p. Even at 10p it would significantly undervalue the equity. I therefore have been scratching my head as to WHY the new Board are talking a big game around all the improvements and turn-around initiatives (cost cuts, higher vessel utilisatations, higher day rates, significant interest savings, etc.). I mean, that's all wonderful stuff, but it doesn't do them any favours IF the grand plan all along is to launch the next bid at a low ball price. Additionally, while they may get over 50% of the votes with any low ball bid, they would be a far cry from the 90% required for a squeeze out and de-listing.