Member Info for casapinos

HI wwguk
Yes , in fact the OO is essentially underwritten by(presumably ) the same II's who have bought in the placing, so as ,i say the oo cannot fail to be fulfilled. I would guess the excess ,if there is any, goes first to PI's who have bid for excess shares and then to the placees if all excess bids are all fulfilled.
What it does demonstrates is that there was, and probably still is an appetite from II's for at least a further 280 mill shares, which may be bought once the dust settles.
I think you may have misunderstood the para you quote "directors may.... that is a standard disclaimer that investors may get no excess shares at all. SXX will not be seeking approval at the GM to offer more shares even if excess bids are enormous, the logistics of that are complex.

Typo 9th line starts
SO,

For those of you with doubts about the short term future of the SP, it's worth revisiting the terms of the placing and OO in the RNS of 1 May.
Specifically, the placing consists of firm commitments to buy ~2bill shares at 15p which represents around 28% of the company's equity upon admission.the benefits of this to the stability of the SP are likely to be significant.
In addition 208 mill shares have been conditionally placed, (which represents ALL of the OO shares!) ie if PI's buy no shares in the OO placees will take them up to add a further 3% of the MC to their holdings .
SOP, essentially the OO CANNOT fail, indeed apart from mine I would prefer all of the rest to go into II hands!!
I think it unlikely that the placed shares with Insti's will be immediately be dropped into the market place , when we see who holds these shares I expect to find some relatively staid and traditional long-term holders eg insurers , maybe private equity, a well known sovereign wealth fund!, etc...the more short-term agents will be buyers of the CB's or Straight bonds
The placees have bought , at a heavy discount, for the medium to long term , a funded mining venture with a certain level of risk , but sound prospects.
So have I.

If you really are interested enough to want to understand the implications of a takeover bid whether private or by another Listed company I refer you to :
https://www.slaughterandmay.com/media/39320/a-guide-to-takeovers-in-the-united-kingdom.pdf

The pertinent facts are that any takeover bid must be approved by 75% of the shareholders and would typically require a bidder to offer a premium over the current SP of maybe 40%. As often repeated SXX's heavily skewed PI shareholder register means that Pi's would largely decide whether or not to accept.
The business papers are full of stories of private equity buying up companies stripping out their saleable assets and paying themselves significant dividends before selling on the hollowed out core of the company to some other mugs. That will not happen here , until production there is no revenue to extract, no working asset to sell , no basis for overpaid dividends.
A takeover, if it comes, will be from an existing mining company looking for diversification from Iron ore, coal, copper etc. My own Guess would be that only when BHP abandons its Jansen project will a takeover become a real prospect.

Avo It's quite likely that some of the shorts are buyers of the new convertible bonds and hedging their exposure.They may be the usual suspects or new players. I have been thinking about the terms of the new CB's and how they may/will be balanced by shorts.
There a couple of things to ponder , first the "new " CB's are at a much lower coupon , offset by generous "closure terms " and what now looks like an exceptionally generous conversion price(24 cents)ie 18p. As things currently stand some of the CB holders could exit in the low 20's (say 21p)at a very tidy 16% profit in weeks!!Though they need to exit carefully so as not to trash the SP.
In addition , it currently looks like there is a view that the downside is limited, if the SP doesn't fall below 15p in the near future, or if there is no flood of "15p" shares on to the market over the coming weeks , then it is my suspicion that some of the shorters may close out their shorts and either accept the 5% coupon and/or the terminal 160% payout (which in the current low interest world is a very high ROR) or perhaps sell on the bonds to other searchers for high interest . I I know of insurers and private equity who would be happy to sit on a guaranteed 10% YTM
I need to run a few scenarios to fully understand the implications but , for now it looks like a different ball-game from the ST1 CB strategy.

Thornback The placing will reduce PI holdings to something in the region of 50-60% , that's still high , but as and when Convertible bonds become shares it will fall , maybe to <40%, depending of course if converters hold or sell, if it gets down to that level SXX begins to look more like a conventional £billion market cap co.

Trion as I suggested -that is why SXX is amongst the most volatile shares in the market, see both recent volume and number of small trades.

Paul c it's impossible to know what allocation will be made IF there are any excess shares to offer. But It may well be that dividing your bid into three smaller amounts is more likely to achieve some excess shares . IT could be that SXX choose eg to fill all bids for excess below a certain level. As often stated the company recognise the issues that having a significant number of PI's on the register creates but may well seek to placate as many as possible with at least a few cheap shares.I have been involved in a few placings/open offers in the past and certainly don't recall any filled from the highest to the lowest bids.
From a SP sentiment point of view you should be happiest if you get no excess ie the offer is near fully subscribed!!

Fred I don't think there will be many extra shares available (if any).SXX have IMV deliberately set the ratio low at 1:22 'cos they don't think most II's could find the cash for a much higher ratio. Lets imagine a 1:2 allocation would all II's rush to add 33% to their holding at a <10% discount? I think not. Imagine the blow to confidence if the offer was not taken up. These things are designed to be oversubscribed for what I hope are obvious reasons.
So accept the chance for a few at a discount and at a lower price than has been available for the last three years and sit tight, happy in the knowledge that your investment is safer now than it has been for quite a while.

The allocation of 1 for 22 illustrates that SXX aren't confident that most shareholders have the cash to stump up for more. That said I don't expect there to be a lot of spare shares from those who don't take up their allocation. It is very unlikely that the bids for significant excess shares will be met .Normally , if any excess shares are available a simple formula for allocation is adopted :

Examples only;
Everybody who applies for excess gets 1%, 10%,50% of their bid depending on how many are available.
Only bids for <10k shares are met.
Bids are filled from the top down or bottom up ie from highest to lowest or vice versa.

Given SXX's expressed desire to reduce stock in the hands of PI's and increase II holdings the solution might be to only fill the big bids and actively discourage small PI holdings.

I wouldn't adopt a strategy which involves selling existing holdings in the hope of getting excess stock at 15p, I think that is unlikely to work.

Simply wall st. is a"bot" ie the raw data is fed in and it applies an algorithm , there is no human intervention and their data is almost always wrong.If you care to check their is a "simply wall st" analysis for almost every company on the planet and the format is identical .And equally useless.

Cherokee Hargreaves don't OWN any shares, they are an "investment service" to quote their own literature, who hold these shares on behalf of Individuals.You should seek to understand the difference between the many providers of services to II's who hold shares in this way, those who hold shares in a fund, which is again owned indirectly by II's and the relative few who own SXX shares "on their own account" ie who spend the company's money to buy SXX shares, not their customers.

SXX is unique in one specific way.It is that it has around 85k private investors, many based in the north, many who appear to have few other investments,many who appear to have significant sums invested here.that has several effects , one is that this board is active, querulous,deeply committed and quite entertaining at times!
It' s difficult to estimate just how much of the company is in private hands but my own view is that it is well above 50%, maybe nearer 70%(remember most of the larger holders as identified in the press are holding as agents of PI's)
From a stock market point of view though it causes several concerns , first is, that ,despite a market cap. of (currently) ~£750 mill ,the SP fluctuates quite widely as PI's either flock to buy or rush to sell .A glance at the Sp over a few years illustrates this clearly. second is that raising additional revenue for company operations via rights/open offers is at the mercy of the solvency/liquidity of those 85k.
Cf is on record as hoping to change the balance from Pi's as the company matures .

Fred I am far too modest to say that things have worked out as I expected!!!
But yes I am now re-invested and will add to my position unless circs. change . I am a long term holder by inclination ,. but only when I believe the balance of probability is in my/our favour. That IMV is now the situation though my objectives are still for >10%pa not a multi bagger.
MR Dt no need for apologies, I , like all the others here express an opinion , I could have been wrong, but If many here had attacked the argument not the author we might all have learned a little more.
Roulette I really don't think it was a 50/50 call.

Apols for my "infelicitous phrasing" yesterday, the point I was trying to make (rather badly) is that the Norges Bank RNS came at a time when all of the current "bad news" was known and that if they were buying in the market then the likelihood of them also buying in the placing was high. After all why buy at 17p when shares at 15p are available.So I think it highly likely that another RNS detailing a greater holding by NB is probable.
To return to another point I have made recently, JPM will NOT have entered in to commitments to arrange syndicated funding without talks with a variety of other institutions who will have committed to share in the process. These things are set up not to fail, as the reputational damage would be intolerable.
SO I feel it is as near certain as can be in a volatile world that the ST2 funding as set out WILL take place and that the lenders, the sums committed and the timing are already agreed.
There will still be alarms along the way and the SP may well rise and fall but there will be a time in the future when the SP is appreciably higher than now.

The Norges bank holding is a positive . The timing indicates that the threshold was crossed as a result of partaking in thew "bookbuild". The significance of this is that they, ie Norges, were in full knowledge of the detail of the funding and subsequent OO and recognise that the negative SP effects in the short term are substantially outweighed by the positive implications of near-certain funding.It very likely they are aware of other heavyweight investors also moving , perhaps gently, into SXX. (The city is a club with regular chatter between the various entities).

Verde Hi Just got back from a long lunch , so apols for delay. I haven't seen the figs you quote and I suspect SXX will be as surprised as me at that outcome if it doesn't change . This is the second attempt to sweep up the ST1 bonds and it may be that the 8.5% coupon is just to attractive to forgo, as I said the short-term likelihood of a >30p conversion is slim.I haven't checked to see what SXX plan if the ST1 CB's remain outstanding or what the effect on outstanding debt will be , but it's marginal in the grand scheme of things.

Verde

First one of the express purposes of the "new" CB's is to help sweep up the old ones, so SXX and JPM will have discussed terms with the holders and AGREED a new structure which existing holders will transfer to.
Then when we look at the new CB terms we see a lower coupon BUT much better conversion terms (18.75p versus 30p?)and existing bondholders might well conclude that conversion sufficiently far above 30p to be worthwhile is a distant prospect since the SP decline.
So the "new" CB holder swill have calculated that the lower coupon will be more than offset by the better conversion terms or the Final 60%bonus, which allows them to hold for the full period and achieve a 10% annual yield to maturity, in these times that's pretty good.
Make no mistake they will have been consulted and they will trade in old for new, perhaps hoping for a rise north of 18.75p within a short period of time , or my hope ,deciding to hold the CB' for some time and then convert profitably and hold the stock (see my 10.13 post)

MILO My thoughts.
There is a strong possibility of a period of relative inaction in the SP, indeed I hope for a degree of calm . It is my belief that by the end of this calendar year the effectiveness of the funding solution will be recognised by the city and , finally SXX might begin to attract some serious II interest, not spectacular but significant. That should lead to Sp upward progress, for my part I would be happy to be sitting on a holding worth 20/30/50% more in two years.
As an aside I have been thinking about the role of the CB's and my attention was drawn by a piece in today's FT , citing Softbank buying Wirecard convertibles worth 5% of the company as a way in to Equity ownership. I will be watching for any info on who holds the "new" CB's hoping that it might be Insurers, Pension funds....etc not Hedgies. Also if the %age of shorts does NOT rise in accordance with the increased %age of CB's that may be a clue that some new CB holders are future stock holders not short-term players
All that said my normal pattern is to accrue a holding over several months as , hopefully the SP rises, I will stick to that and will (probably) buy in tranches for the rest of this year , but am happy to amend that stance as events occur.

Addendum , I have a lot of time for PPVN?who helpfully dealt with a blizzard of questions from me about the details of CB's over on AD**N a few years ago .
His knowledge of project finance seems excellent , however I do not entirely agree with his recent gloomy take on the ST2 outcome as reported here in the last few days. That said, I am still in this for a modest profit over the medium term rather than the bonanza some have hoped for