The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
http://newziana.co.zw/2019/10/04/zcdc-plans-huge-diamond-output-leap/
Of course this deal is subject to shareholder approval, but if it is voted down, and alternative finance cannot be arranged, administration would follow. I would suggest the chances of that alternative finance being realised is slim at best - I would prefer the odds on Tom Winnifrith finally getting his wicked way with Cheryl Cole.
Shareholders in this company have demonstrated an ability to vote against common sense, as they did in January when they restricted the ability to raise capital via placings. I rather suspect shareholders will consider voting against this deal thinking this will deprive Minty of gaining control of MFDevCo. In my view such a move would likely fail – Minty would still obtain control of MFDevCo via negotiation with the administrator around the outstanding debt. So I see little option but for the shareholders to vote this deal through, but that does of course assume they are rational and I know many are not!
Meanwhile I feel sorry for genuine honest shareholders who have effectively lost pretty much all their investment, on what to me has always been a lifestyle AIM company, but I delight in the losses of those shareholders who insulted me and wished me to be set alight and to burn to death.
I see the equity having a fair value far below its current bid price, hence I can only conclude selling would be the only rational action at the current time, even if this crystallizes losses.
The company had a longstanding debt with Shard Capital, which it demonstrated zero ability to repay, and today we are told this debt was purchased by C4 Energy Ltd. We are not told what C4 Energy paid for this debt, but in my view £1 plus a bag of Golden Wonder crisps for each director of Shard Capital would have been fair. The proposed plan will see this debt re-stated at £2.5 million with this sum being convertible into shares at 0.05p. So that’s 5 billion shares to be issued in the future.
We are also told that, subject to this deal being voted through at an AGM, a further 1 billion shares will be placed at 0.05p raising £0.5 million with persons or bodies corporate introduced by C4 Energy. We are also told that Mr Jayanta Bhattacherjee, formally with Aminex (AEX) and Andrew Dennan, currently a director of Coro Energy (CORO) will be joining the board and effectively taking control, and that they are shareholders in C4 Energy. That’s rather interesting, as Companies House records, last updated on 27th September 2019 (last Friday) re-confirms the two directors and only shareholders of C4 Energy as James Parsons and Marco Furmagalli. Perhaps these records will be updated?
If this proposal goes through, the company will become a cash shell. At best it will have the £0.5 million of cash from the proposed placing, less of course the costs and residual liabilities after elimination of the RMRI debt. I would suggest its value would be no more than its listing value – say about £0.5 million assuming it retains sufficient cash to pay the corporate costs until an RTO can be sorted.
Current shareholders own 1.5 billion shares, but on a fully diluted basis there will be 7.5 billion shares in issue. So current shareholders would effectively own 20%, or £100,000 worth of that £0.5 million nominal cash shell value. With the shares trading at 0.05p as I type, that values the current equity at some £750,000 or 7 ½ times fair value in my book.
There is also the matter of the ongoing litigation in Canada. This litigation is between Enegi Oil Inc, a wholly owned subsidiary of the company, and its partner PVF Energy Services Inc. I can only assume this liability with either be resolved at minimal cost or the subsidiary, Enegi Oil Inc will be cut free, via an administration process or the like.
It would appear to me the attraction of this deal to James Parsons and Marco Furmagalli is both the convenience of having a listed shell and the accumulated losses, some £43 million at the end of last year, which the company has managed to accrue from spending shareholders cash to achieve nothing of any value. If my view on the debt purchase consideration is correct, Parsons and Furmagalli are currently risking £1 plus a few bags of crisps. Sounds ok to me.
NuOil & Gas (NUOG) has been a cornerstone of my crap quartet for some time and I read todays RNS with some delight. This company has caused me to write to the FCA / AIM regulation more than any other company in recent years and the social media insults aimed in my direction from “long and strong” shareholders have been truly disgusting. I am sure the dilution to practical oblivion by James Parsons and Marco Furmagalli of Sound Energy (SOU) infamy is a richly deserved reward for those moron shareholders.
Gary Newman has warned shareholders over many years about this company, most recently in July this year. The company has never really done anything other than raise cash via placings and spend it achieving nothing. It’s only assets are an investment into the Marginal Field Development Company and some crap asset in Newfoundland and tax losses. That asset in Newfoundland is currently in dispute via the courts and frankly looks far more a liability than an asset.
Over recent years there has been much shenanigans with this company. March 2018 saw me report the company to FCA and Aim Regulation for Market Abuse (inside information spewed across the LSE bulletin board). An RNS was swiftly issued. The AGM in January 2019 was always going to be a contentious meeting, with plenty of shareholders posting on LSE how they would vote down resolutions for further dilution. Contemporaneous social media posts during the meeting confirmed key resolutions had not been passed but the RNS reporting the meeting did not reflect this outcome. So a further letter from me to the FCA & Aim Regulation resulted, as did a totally separate letter from Gary Newman. Again an RNS was swiftly issued by the company to correct the matter. I continued to comment on the LSE asylum until I was permanently banned at the instigation of the company.
So here we are today with a proposal for wholesale change. I would have to say, this looks like a good outcome for shareholders as I was fully expecting a trip directly to the corporate knackers yard this month.
In effect Alan Minty, the former Exec Chairman, gains 100% control of MFDevCo in exchange for outstanding inter-company liability being extinguished with RMRI Ltd – a company he controls. The company has told us repeatedly via RNS and interviews and the like that MFDevCo represented the positive future with all sorts of possibilities of deals and revenue, none of which I considered had much merit. Regardless of my views, if social media posts are to be believed, MFDevCo was the light at the end of the tunnel for shareholders. If this plan goes through Minty obtains 100% of MFDevCo despite all that funding from placings.