Member Info for Barry5

ALL resolutions passed.

The vote will be based only on those that vote and those that don't will simply be ignored so the votes almost certainly will pass and my guess is it will be c lose to 100% in favour of the resolutions as we all hope for something positive to come out of this having virtually written off our investment.

Not sure how many are following the comments on the Rapier Capital website:

https://rapercapital.com/2023/01/12/an-open-letter-to-the-board-of-serica-energy-plc/

One exchange particularly interested me, which was between Daniel Baldini and Jeremy. Daniel asked Jeremy why he had no mention of the tax losses in his letter to Tony Craven Walker. The full exchange is interesting but I highlight below Jeremy's thoughts on the tax losses:

"1) Tax assets: you are right they have some value, but i believe nowhere near 470mm. firstly that is a gross number, not discounted, you would need at the very least to NPV it versus the likely applicability. assuming zero changes in the tax rules and full utilization, it would take i believe 2-3yrs to extinguish that 470mm number, so you could say NPV is somewhere around 350mm? before considering…
…that Labour is likely to win in 2024 (polls) and is extremely anti O&G. since using these tax losses is essentially just to dodge to excess profits levy, i wouldnt be surprised if there were further changes to the tax code, perhaps over night, to limit the applicability of legacy NOLs to specifically get out of the excess profits tax. you may argue this is punitive but SQZ management notably didnt want to talk about the NOLs on the call; and specifically avoided including any tax synergies in their numbers.

so even if you accorded the taxes some decent amount of value, given the riskiness inherent in actually getting the value, i would think a simple recapitlization strategy (ie buying back shares to create huge accretion) is far less risky than this transaction"

the other two sections were concerning Mercuria assets and Mercuria "control" . If the website can't be accessed I'd be happy to copy those paras over as well.

Dowgate show 2022 EBITDA as minus 6.2m and a loss before tax of 8.1m

i thought it was an encouraging RNS. I've just read the Dowgate Capital Research Note and they give a target SP of 150p based on Units sold being 12,000 in 2023, 30,000 in2024 and 60,000 in 2025.

The Cash Flow does indicate cash running out next year - currently showing minus 7.5m by 31 Dec 23 so it does look odds on for a fund raise, which i assume is why the SP has dropped.

But, all in all very encouraging.
GLA

jazbo, IMO Mitch, the CFO and maybe The Chairman (but not straight away as he would need to stay to calm the waters) would be toast. The non-execs should be safe as the whole BOD couldn't resign en masse.

I post (not frequently) on a number of boards but only on those where either my wife or I hold shares and i find this to be the most balanced and reasonable of all of them. At the moment most of us seem to be moving in the same direction but opposing views should always be welcomed and respected, as I hope does happen here. Good, sound arguments should always be preferable to threats and foul language.

I have never had to green box anybody on here, unlike most of the other companies I follow. GLA

This is also quite interesting. On twitter Iggy asked Jeremy "Have u spoken to any large shareholders yet? Or other interested parties?"

Jeremy replied "yes i have...will leave direct comments on this topic for now, suffice to say my views are widely shared"

NewKOTB I think Jeremy is certainly a man on a mission. My view is that it's great to have someone with passion and clout on our side.

NormaStits, the points that Jeremy Raper made, albeit somewhat more stridently, have all been made in this forum so are we all petulant children. i could find no fault with any of the observations that he made.

Jeremy has just emailed me the following:
"for what its worth, and for anyone involved here and sharing my aims – you can write directly to the company at info@serica-energy.com, requesting said message to be delivered to Mr Anthony Craven Walker (the Chairman), suggesting your support of this letter and intention to vote against. I believe it is worthwhile as every vote will count in this one and think it will be a close vote regardless."

11 JAN 2023: PLEASE NOTE THAT THIS IS A REVISION DUE TO MEETING TYPE HAS BEEN CHANGED FROM EGM TO OGM. IF YOU HAVE ALREADY SENT IN YOUR VOTES, PLEASE DO NOT VOTE AGAIN UNLESS YOU DECIDE TO AMEND YOUR ORIGINAL INSTRUCTIONS. THANK YOU.

Not sure what to make of that.

and thanks Fool on the for posting this. Should stir everybody up

Blimey.

"The proposed Combination immediately incinerates shareholder value"
"Flawed in its conception"
"fails the most basic of merger tests"
"rushed through in a matter of weeks"
"the Proposed Combination would destroy hundreds of millions of pounds of shareholder value at a stroke"
"The Proposed Combination surrenders de facto control, without a control premium"
"Management’s portrayal of the Proposed Combination as ‘accretive’ is highly deceptive"
"Management’s portrayal of Serica’s standalone earnings power is massively sandbagged"

Well they certainly aren't holding back. I don't think I've ever seen the like. All of the above have been made by the excellent posters on here but Raper have the clout. This should be of serious concern to BOD and the executives could not possibly survive if their gambit fails.

I agree Banburyboy. Mention of Kistos is a distraction. In any case I think it is too late for any bidder to come to the party now. They might (and probably would if this deal fails next week) if the SP slips. But the SP ain't showing much interest in the current deal anyway.

For the record I have always said that my holding in Kistos is a lot bigger than here as I followed AA after success at RRE. I came here because i liked the fundamentals of the company and because of the prospects that the cash mountain could be used for the benefit of the current shareholders. I never expected to see it used to facilitate a 28.9% blocking minority holding.

I suspect, as others have said, that Mitch has the votes - all the large holders would have been tapped up and the deal tightened if there had been any pushback. I am still a strong NO but I don't hold out much hope of success.

GLA and let's all hope for success in whatever outcome emerges.

Just keeps getting bigger and better. Just need the DFS now in "mid 2023" .

Sounds like that's a lazy, can't be bothered response from Halifax farsdak. I would give it another shot and insist on speaking to somebody who understands what is involved. Also suggest you have a moan and tell them that other brokers enable people to vote online as their platforms have moved into the 21st century!

Rationale based on one day! Did you not see the chart in the presentation with huge swings.

But I don't disagree with the diversification but let's be careful about confirmation bias.

The holding with which Mercuria is going to emerge is extremely concerning. A holding greater than 25% is a significant figure for a shareholder stake. It gives them the power to block a special resolution and, while most decisions of shareholders are passed on a simple majority, special resolutions require 75% or more of the votes. Accordingly, the value attached to a 25.01% holding in any share valuation is a lot higher than that for a 24.99% holding for that very reason.

it seems obvious to me that the best way to protect the company and its shareholders would have been for BOD to have insisted that Mercuria's stake must be below 25% and stay that way for at least a 2/3 year period.

Mitch's failure to do that is a mystery and, whatever he says, the company is at risk with such a large minority being held by one shareholder. In the presentation, Mitch mentioned that the company has experience of dealing with large minorities, referring specifically to the 18% holding that exited a couple of years ago. But there is a world of difference between an 18% and a 25% holding!

RELLIM, Presumably by the AA you mean Andrew Austin lol

Summed up nicely Tony.

Variable figures and statements depending on whether you want to buy or sell.

Mitch did a lot better and I am more comforted by the explanation of how soon the tax losses could be used plus the fact that tax advisers have carried out extensive due diligence. However, I don't believe that this deal is the answer as too much (everything) will be tied up with UK assets and I'd like to see some geographical diversification.

So its a thumbs down still from me.