Member Info for adzy2k11

Anyone want to guess? hopefully time to close out the short finally.

The current intention of the Board is to maintain the Company's listing, however in certain circumstances, proposed recapitalisation may result in the cancellation of the Company's listing

wouldn't be surprised if they came in again at a better offer than the one in May.

nope. we met with them today. we are shareholders.

removed it. don't want it to be wrongly interpreted. but very insightful non-mnpi information.

correct

19 Aug 2019 08:28
Subject: 9.6p for the gap close
Message: should reverse from there

AND
14 Aug 2019 11:23
Subject: message from broker
Message: yeah, can probably see that gap filling.

As I stated earlier, this was the closing of the gap from last Monday at 9.4p-9.6p. Simple

If you thought the house could be fixed up and be worth much much higher, then why not?

it's no lower liquidity that the big drops on 12-14 Aug.

should reverse from there

urgh - just got an email from IG saying security lenders are requesting their shares back and so borrow will no longer be available. looks like i will be forced to close

but buck - you just said it's crazy to think NK will make a bid for the equity, so why would the share price still be 8p...?! it's certainly not the PIs on here keeping the price up on "speculation", and surely the street is as smart of you to figure out 1p is coming? then why the HUGE discrepancy?

if you have more accurate figures on the resultant valuation of the new business - please post...
i do have a question for you though - if you convert $2bn of debt into equity - what is the resultant equity worth? ;-)

Buck - you are missing two vital bits of analysis from your thinking:
1) the valuation of the resultant debt-free business after D/E
2) the terms on which the existing shareholders MAY be given the opportunity to participate in the recapitalisation (let's assume this to be zero for the sake of this answer)

you can work out the dilution but YOU DO NOT KNOW the price at which the dilution will happen. It could be 1p, it could be 5p, nobody knows. A few sell-side analysts have it at 5p, and that's maybe why the price hovered around 4-5p before the NK news.

Here are my numbers:
New equity is issued at the share price of 5p
Current shares (m) 1,534
Market cap (£m) 77
Fosun equity (£m) 450
Bond equity (£m) 75% x 1700 = 1,300
New equity (£m)1,750
New shares 35,000

FY20
EEBIT 300
EBIT margin 2.5%
Revised interest cost -75
PBT 225
PAT (£m) 180
EPS (p) 0.50

You then have to assume the new business (with its significantly reduced debt) would re-rate, so I assume a P/E of 10x (same as comps) which then values the new business at 5p or $1.8bn market cap.

so yes, significant dilution, but you should also get a 10x re-rating in the new business which will leave you pretty much where we were before NK.

obviously all these numbers are estimates, and could be wildly wrong. If Fosun and TCG manage to turn around the business there could be upside to the numbers. There could obviously be significant downside too.

for the record - I AM SHORT - but constantly pushing myself to see the other side of the thesis.

You have no idea whatsoever what the dilution price will be - stop suggesting otherwise.

What’s the difference between what Amers stated re RNS coming vs Buck on numerous occasions suggesting an rns on 12th august (which ended up being true).

Yes buck - plenty of times you’ve said 1-2p, which suggests it’s not priced in, no?

You do realise that’s all ready-priced in, and more

You do realise that only a minority of TCG’s sales come from the UK? Have a look at their georev exposure

haha!