Speculative Investor - please read2 Nov 2023 07:20
Hi Speculative
I like you a lot, but this is my bread and butter - ten out of ten for the research but a little more UK accounting knowledge is needed.
As previously said on Page 53 of RRR PLC accounts at the bottom of Note 18 you will see.
“During the prior year on 6th November 2020 the companies 100% owned subsidiary RRR coal re-financed its existing loan facility with Riverfort Global Opportunities and YA 11 Pn Limited increasing the total amount available to draw down to US$2m”.
The intercompany balance on 30th June 2022 was £1.890m. So clearly a loan.
You are correct the payable loan to Riversfort in the accounts of RRR coal has been shown the revaluation reserve. A poor attempt to mask it.
The key difference is RRR PLC is subject to audit, so the substance of the transaction is revealed as above by the group company auditors . RRR coal has an audit exemption, so its accounts are prepared by you’ve guessed it Andrew Bell with no requirement for audit at all.
The give-away that an RRR Coal loan exists is the statement by the PLC’s independent auditors stating the loan exists (above in italics) , and for a company that had no loans payable on its balance sheet RRR Coal incurred a lot of finance charges and got no finance income in the year 😊 Laughable in some ways but perfectly legal.
On the plus side it was repaid by share issues in around July 23 (Riversfort Loan) although intriguingly a sum of I think 40k was left unpaid. I said at the time this was to keep the existing loan facility open and that was what was being used to keep the lights on in the last few months (Helpful at the time said loans under 200k did not need RNSs which is telling).
The audited accounts will tell us more and I would expect post balance sheet movements re the Riversfort arrangement to be disclosed in line with best practice.
The above is factual but I will add some conjecture. Riversfort is key, they have the loans, they have the single registered charge, and I would not all be surprised if they were not our new CLN holder. The accounts will reveal all. Andrew in dealing with Riversfort IMO has put RRR in a dangerous position.
You asked me if RRR will exist in its current form on AIM in ten months and this is one of the reasons I think the jury’s out. We could have a creditor foreclose, a suspension or a delisting. Andrews opaque governance makes that far more likely.
I agree the assets are worth more than the market capitalisation but the fact this is run by the few for the few means this is a share for trading rather than investing IMO.
Sign In
Follow the stocks
