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Overall very frustrating, but has reconfirmed a lot of positives which will need to have been proved with evidence to the regulator:
- Seller hasn't pulled out
- Assets not nationalised
- No impact of sanctions
- DLA/UBS still working on deal
- Rosgeo licenses still expected to be transferring
All these things should now have been verified by the regulator.
The BOD has shown they don't care about propping up the SP with news. Even pre-war they didn'tcare about ramping the SP because even though they are in this with a large % of shares, they can't sell them. So SP is irrelevant to them. Not nice for PIs but that is the way it is.
The only RNS that will be +ve on the SP is a sale update with solid details in. Everything else will just be sold into.
Interesting question on the share options.
Do you know what the option prices are?
Logically thinking, you would expect the BOD to want to wrap any deal up in advance of the options expiring so they can exercise them in advance of the deal. They probably thought that November 2022 was plenty of time, before the war started.
My issue with the BOD pre-war was that they have sat on information that would have increased the sp. Eg
- Jorc details
- details of ballpark figures that were offered during FSP
- what is being sold under the new strategy and to how many counterparts
- I believe the company are sitting on the rosgeo license transfer paperwork
- clearer timeliness
To maximise SH value isn't all about the final deal. Some people want/need to sell out sooner.
All the secrecy has now ultimately cost sh now the war has started.
From CNN: Russia can still sell Nickel to US
Washington, DC (CNN)Vladimir Potanin, the richest man in Russia, has watched his fortune shrink by $8 billion this year as his country invaded Ukraine. But the company he leads as CEO, Norilsk Nickel, can still sell nickel, a critical metal in electric vehicle batteries, even after US sanctions targeted Russian energy.
"Today (Russian oil producer) Rosneft and Nornickel were able to make payments that have become urgent," Potanin said. He did not specify which type of debt."
This is potentially big news gone under the radar.
NN debt is 99% USD, it seems they to have been able to make debt payments in USD, presumably Internationally.
Mr Big is wanting to double down on his Nickel short position apparently.
I guess if he thinks he can't lose (because the market will not call his margin in), then why not?
IMO once the war ends, NN still will be the biggest provider of Nickel to the East/BRICS over the next decade. They still need EUA as a separate entity to greenwash their ESG image in order to work with the big Chinese/Japanese buyers. Hence why EUA got the Rosgeo JV license options, not NN who would have been in the pole position to take them. Still confident of a sale, but the fighting needs to stop before any progress.
Thinking about this, two options:
1) It is not clear whether the dividend sanction only apply to listed Russia companies not being allowed to pay overseas dividends. 100% owned subsidiaries MIGHT NOT be included.
2) It may lead to a full company sale, rather than part sale. It would probably be easier if the buyer was able to just buy all the company and pay the cash straight to the PLC shareholders.
From the POLY RNS:
"From 1 March 2022, certain foreign currency transactions involving Russian residents are restricted. Russian legal entities are prohibited to pay dividends to foreign persons, although formally these instructions apply only to dividends of joint-stock companies paid through professional participants of the securities market. It is currently unclear whether the Company will be able to remit dividends from its Russian subsidiaries to the holding company level"
Is there a way round this for the sale strategy? We are a UK top company with mix of Russian/Cyprus subsidiaries. YGK that holds the new Kola Nickel and Kola Mining subs is Russian. So if one of those is disposed, could the profit be dividended up to the UK PLC?
I think the BOD need to update on this.
It is quite clear that whilst UKR continues to be attacked, no deals are going to complete.
However what is a fact is that the buyer hasn't notified EUA that it is pulling out of the deal (would need to be RNSd)
I think I read that NN is now cap at $11bn. Largest Nickel producer in the world. One thing is for sure, there are going to be some of the oligarchs making even more fortunes buying into this volatility, particularly in the metals sector as the need for green energy is only going to get bigger for the next 20 years.
I think perhaps the sale strategy might simplify now and just be the sale to NN, rather than a multi-party structure on the JV (this might come later). So looking at it optimistically, it might accelerate the timeline, but won't happen whilst fighting is still occuring.
NN have a Cypriot subsidiary too, and USD to pay for the deal. I assume UK isn't blocking transfers from Cyprus to UK banks, which would allow for the dividend flow to investors.
With metals priced in USD the RUB collapse doesn't actually affect the value of EUA resources. What strikes me as strange is that a fellow UK-listed Russian-based company Raven Properties has their sp fall YTD roughly the same as EUA, despite their revenues being in RUB which is hugely devalued now in their reporting currency of GBP.
Couple of really interesting articles both from the last few days:
https://news.metal.com/newscontent/101758293/nornickel-nickel-is-likely-to-flow-into-chinese-market-or-lme-warehouses-pushing-up-premiums-of-other-nickel-brands-in-europe-and-us-markets
Conclusion: “sanctions will mean more Nornickel nickel is likely to be exported to China or delivered to warehouse stockpiles from which it would eventually be shipped to Chinese market.”
https://www.eenews.net/articles/could-russian-sanctions-hobble-u-s-clean-energy-push/
Conclusion: Western sanctions on battery metals would hurt the west more that it would hurt Russia.
Chinese still investing in Russian energy sector, deals still happening:
https://www.bloomberg.com/news/articles/2022-02-28/gazprom-paves-way-to-new-china-gas-deal-as-sanctions-hit-russia