Thoughts on the offering docs16 Dec 2021 09:21
Morning all,
Just a few random thoughts all of which are pure conjecture:
I suspect the equity price won’t be crazily high; we’ll have needed this partner to do the deal and they’ll want a sweet one. I imagine the equity will be around 20-25% of the total ticket size for CC. A price of 40 pence (quite high!) at those sorts of levels would take us to the current limit of permissible dilution at 30% (if my maths is right). A lower price would lead me to think a special resolution for raising the current dilution ceiling would be necessary.
I also suspect the equity will be Vitol. Could easily be many other parties but I doubt very much that we’ll get a chance to re-up (so not a rights-issue style affair).
We’re all thinking about “terminal” value here based around the larger asset portfolio. I think we’ll open at a healthy premium but, as someone else mentioned, the price may take time to build. We know the story here, but the market won’t necessarily immediately cotton on. For me; it could be an opportunity to top up to a round number. If not, it’s great anyway.
I think the offering documents will be necessarily adequate to address the operational changes, strategic plans and(of course) debt and equity restructuring. However, they’ll be succinct and only as much as is necessary. I wouldn’t expect great detail on each asset and each piece of the strategy. Lawyers charge by the page as well as by the hour.
I expect management may structure a remuneration package for themselves and potentially employees, based around SP performance. I’ve no problem with this if it’s proportionate.
Finally, I wonder if the acting CFO will get the seat permanently.
Snaffleman: I did chuckle at your note re the turnips arriving on the bulletin board: thanks! Get your filter button ready, everyone.
Best wishes, all.
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