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In Nanoco's response letter they say the damages models were referred to in chat rooms, like this is somehow adequate disclosure under FCA and exchange rules?!?! Don't think that is going to fly with the regulator.
Intriguing stuff - a lot to digest - some which is very worrying.
1. Chris Richards confirms that phone calls were made to shareholders as Nanoco was "negotiating with a bunch of parties with a view to finalising an agreement with Samsung". What was discussed - surely they must have recording of these calls and can put shareholders fears at bay by releasing them?!
2. Tenner confirms that Nanoco were in possession of settlement offers in 6 to 9 months prior to agreeing a settlement and Lombard Odier are on the board, selling stock during this time.
Comforting that the proposed CEO, Greg Moeller, co-founded QDVision with Jonathan Steckel who is leading the QD charge at Nanoco's lead customer, STMicroelectronics.
Would be helpful if the board could just answer the questions laid out at the end of the document as there are some real important questions to be answered and Nanoco just continues to deny rather then answer them with any real clout.
Rough seas ahead but shareholders should have their vote!
This report has been commissioned by Nanoco Group and prepared and issued by Edison, in consideration of a fee payable by Nanoco Group. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.
Nanoco provided a perpetual license over the only patents with value (and likely the ENTIRE US portfolio) and sold over 100 patents.
REMEMBER THAT IN THE FY2022 RESULTS RNS (https://www.lse.co.uk/rns/NANO/preliminary-results-q4raty06416c5t3.html), THE COMPANY CALLED ITS 503 patents CORE, after reducing the size of the portfolio during the period... but now claim they sold 'NON CORE' patents.
Intellectual property
We continue to proactively manage our IP portfolio to maximise value and protect our core competencies. During the year, we focused the Group's IP portfolio on to a core of 503 (2021: 559) patents and patent applications with the most promising commercial potential. This net reduction reflected 24 new applications and 80 that were eliminated in territories or potential applications no longer felt worthwhile.
We continue to preserve trade secrets and have targeted our financial resources on strategic areas such as infra-red sensing where there is a strong overlap with our core IP. These are also areas with clear future commercial opportunities and benefits to be had from holding high quality patents.
They sold non-core patents for what is now the entire market cap of the company... who deemed these patents non-core, provided fairness opinions, was a competitive process launched since the IP was so valuable.
Disgraceful
What questions will you guys have for BT and co tomorrow? Here are a few of mine... would be great to get a broader list together!
1. Was Nanoco originally first in line to go to trial in September but having already been deeply engaged in settlement discussions delayed (or put 2nd in the queue) and then entered in to a January trial?
2. When did settlement discussions start with Samsung? There is some noise that the company had received settlement offers at a number of different points including right after IPRs?
3. What patents were sold as part of the Samsung settlement? Nanoco claims a "number" of patents were sold, but how many were actually sold and why these patents? The company called it's entire patent portfolio "core" over its FY22 results.
4. Why did Nanoco enter a patent box regime in FY 2022; the patent box regime allows for cashflows generated (related to UK and European patents) to be treated at a 10% rate of tax versus the normal rate of UK corporate case - was this settlement planning / was Nanoco actively engaged in settlement discussions at the time they entered this regime and looking to optimise its future tax situation?
5. Was Lombard Odier a member of Nanoco's litigation sub-committee? For some reason, the members of this committee were not disclosed in annual reports.
6. Did Lombard Odier have access to Nanoco's legal advisors (Mintz, Epitcentre, or others) on any occasion before trial? If so, what was discussed?
7. Were there private conversations between the Nanoco board , LOAM, and Griffiths on the eve of trial as Pallas refer to?
8. What patents have Nanoco sold? It looks like they have actually sold over 150 patents, including one which was originally in trial (even though I believe in a release BT said that no patents at trial were sold -LIES?!?)
9. Why was there no competitive process when the company issued the related party loan notes? The company had issued an equity in an oversubscribed raise prior to this so why wasn't an offering made to PIs?
10. LOAM was a 27% shareholder at the time the loan notes were issued, so issuing equity would have tipped them over 30%; did the company help them skirt takeover offer rules? Remember, then for some reason they didn't participate in the TURNER POPE rug pull raise.
Why would anyone buy VCP equity at current levels...
Looking at EV/EBITDA for Mohawk Industries, and Interface Inc, two better run and well capitalised businesses, they are are trading with a very low multiple of roughly 6x. Then we have VCP which has net leverage of 5x EBITDA and the equity trades at near 10x.
INTERFACE just had a bad quarter and is down 20% on the year and Mohawk is trading near its 52 week low (with the company buying back stock of course), whilst VCP is up 12% YTD. Makes very little sense! Perfect time for some Warren Buffett bullisht quote that Geoff would use in an annual report "Markets can remain irrational longer then one can remain solvent"
https://seekingalpha.com/article/4583700-interface-stock-extremely-cheap-at-current-prices
https://seekingalpha.com/article/4578295-mohawk-industries-wait-until-q2-results-before-taking-a-position
As I said before, I would not touch this stock on the long or short side.... short you run the risk of a big squeeze and longs make no sense when there are much cheaper and scaled businesses you can buy into in better markets (the US). VCP is artificially inflated due to the tight borrow and desperation for Geoff Wilding and co to squeeze. It is a pig with lipstick.
This stock will crash hard...
https://www.elperiodicomediterraneo.com/ceramica/2023/02/27/industria-ceramica-vive-etapa-incertidumbres-83675934.html
"The multinational Victoria Ceramics , owner of Keraben , Ibero, Metropol and Saloni, announced through an official statement that, in order to adapt the group's production capacity to the expected real demand, "in the plant it has in Sant Joan de Moró will continue to operate its atomizer, manufacturing red atomizer, and the rest of the products that this plant manufactured (red body and small porcelain formats) will be transferred to the other plants of the Group in l'Alcora and Nules, which will continue to serve all the group's brands."
So, Victoria put out an official press release to Spanish media but hasn't put out an RNS? Interesting... are they flouting disclosure obligations? This story also notes that the European Commission is looking to introduce anti-dumping legislation re tiles coming from TURKEY and India... so won't be as easy to bring in tiles from the Turkish plant as the company believes?
This part in the story also stood out:
The general director of Ceracasa , Carlos Cabrera , explains that "what began as a crisis of energy costs spread to raw materials and supplies, and all of this led to a drop in demand as the markets were unable to absorb the cost increases. Transferring these increases to sales prices means losing competitiveness. "This situation has meant a strong financial weakening of the companies aggravated by the lack of response to the demands of the sector, the insufficient support of the Generalitat and the neglect of companies by the central government ." In short, "the sector is in a worrying situation," says Cabrera.
Good luck all!
So closing down Saloni, Keraben, Balta, all at the same time to move capacity to the UK, which they already owned prior to these acquisitions, is all for production/cost optimization... yeah OK, have another hit of the crack pipe.
"As the reason for the transfer to the UK, the company refers to the difficult economic context with exponentially rising wage costs, the unstable energy policy and a falling demand for fixed carpet on the continent. As a result, a profitable production of wall-to-wall carpet in Belgium has become impossible. The contracts of 295 employees in the Balta Carpets division and in the support services would be phased out."
https://www.nieuwsblad.be/cnt/dmf20230215_93737317
UNION REPS SAY VOLUMES ARE DOWN 60%
“What is happening now is what we predicted”, responds trade union representative Steve Meseure of the ABVV. “During the takeover, the management said that it was not the intention to transfer the department, but the world has changed in the meantime: the energy crisis, the war in Ukraine. The decrease in volumes has dropped by 60 percent. The UK is still the largest market and there is also sufficient capacity there, which makes it more profitable for the employer.”
Victoria has decided to close down their Balta plant which they paid near £140m for... what is interesting is that last month, Hamers said they were going to "reoptimise" this plant only last month.
So between Saloni, Balta, and Keraben... what is really going on?!!? not one single RNS????
300 jobs gone...
https://www.tijd.be/ondernemen/textiel/tapijtmaker-balta-schrapt-300-jobs-in-west-vlaanderen/10447511.html
So, why the inconsistency in what they told Quoted Data and what they reported today? As you put below, Quoted Data reported it was an institutional investor and in today's RNS they say it is with a leading major European bank lender. If it was actually a bank lender, they wouldn't have had a problem with their name out there... Just a bit worried that this could be with an aggressive lender with very restrictive covenants and all the rest.
To fully draw down that piece and then doing a deal with a hedge fund or alternative credit type investor (if that is what it really is) is dancing with the devil.
Would be great to have some further clarity from the company on who the lender is and what covenants are like... I think it is quite material, dont you guys?
Anyway, at least the refi is out of the way!
Debt is not cashflow.
I understand that profits must flow out but as a REIT you are absolutely not required to draw down debt to pay out a dividend.
I just really wonder why they are hiding the name of the lender... put this together with the change in language about payments received, its all very murky...
Look at Home Reit this morning.... they claim to have received a NON-BINDING offer from Blue Start Limited who are a company with £170k of assets.
Civitas should be transparent and provide us all with more detail at the moment, not less... how do we go from knowing who the Lender is and the terms to not having a clue. Why don't they also share the cost of interest on this facility? Vert simple questions...
Saw this on Bloomberg this morning....
Home REIT Plc: The social housing landlord that’s been targeted by a short seller said it got an unsolicited approach from Bluestar Group Limited regarding a possible cash offer. Bluestar now has until March 16 to announce a firm intention to make an offer.
Then if you check and see who Bluestar is... well its a shell with £170k of assets. More sculduggery from these Home Reit scummies.
https://find-and-update.company-information.service.gov.uk/company/12260861/filing-history
Anyone have an idea? Seems odd and I don't get why they fully drew on the financing already. They replaced a £60m facility with a £70m facility and we are already fully drawn on it?!!
This means they are drawing down debt to fund a dividend - doesn't sound healthy.
How is it positive news? LTV is up and the financing is fully drawn...
Also, why don't they tell us who the lender is - more cloak and daggger. Don't see a reason why they cannot say who it is.
Seems like it is a very tough market out there. Mohawk Industries, who are a $7.5bn flooring giant, saw there net income down nearly 90% this quarter and closer to home, Malin Flooring in Mancehster, has collapsed into administration. Not a small business either with around £30m in sales; maybe its a good opportunity for Geoff to go out and acquire those assets?
Fast-growing floor specialist collapses into administration
https://www.constructionnews.co.uk/financial/fast-growing-floor-specialist-collapses-into-administration-07-02-2023/
07 FEB 2023 BY JOSHUA STEIN
A floor specialist that has worked with major contractors including Buckingham Group and Sir Robert McAlpine has collapsed into administration.
Malin Industrial Concrete Floors Ltd, a £25.6m-turnover company specialising in flooring production, appointed Mazars as administrators this week.
https://www.barrons.com/articles/mohawk-industries-profit-warning-low-demand-plant-closures-flooring-carpet-51673969712
Mohawk Industries shares were sliding Tuesday after the flooring company issued a profit warning, citing declining demand.
The company pointed to interest rate hikes, high inflation and “lagging consumer confidence” throughout the United States and Europe as reasons for the business slowdown.
As a result, Mohawk “increased temporary plant shutdowns, which further compressed margins,” according to a company release. Further, flooring demand in North America fell more than in other areas, which resulted in inventory being slashed.
I would advise people to listen into what was a very grim earnings call for Mohawk: https://finance.yahoo.com/news/mohawk-industries-inc-nyse-mhk-032147341.html
An investor I know in this situation is a UK fund who has had a couple of conversations with Brian over the last two or three weeks (since the original 1/6 and 1/9 release). Apparently Brian Tenner is telling investors like him that the company had their own 'internal ranges' for settlement or possible outcomes that Brian never disclosed to the market.
What I think is crazy is that LOAM knew what these ranges were having sat on the board and then the company put the RNS out on the 9th Jan, they would have known what the lower end of the range meant and therefore were absolutely an insider. They were selling after the 9th, so they had insider information. This is probably not the only insider info they had.
FCA has to take action here - god only knows what they actually knew and what has happened in the background. Brian Tenner has led a pump and dump on retail. I do now how this guy looks at himself in the mirror