The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
In terms of bang for your buck, this is the roller coaster ride that keeps on giving!
Anyone on here sell on the recent peak? Should have known any brief surge of confidence will be hosed down again....
Blueskyboy, RI won't happen without the underwriters, otherwise they cannot guarantee the 19:1 dilution. If there is genuinely a reasonable sized group of shareholders that could come together to underwrite the RI (I.e cover the £45M in the worst case - no one buys any) then they should be talking to the BOD. This is what was suggested by one of the shareholders on the last call and the BOD said they were open to it. To be fair if they have got some form investors already, they may not need new investors for the full 45.
Itsagame, will be interesting to see how it pans out. Don't forget RI will not go ahead without full coverage of the £45M underwritten. I assume this means that non taken up rights will be bought then by the underwriters rather than available to the open market, so hopefully that would prevent too much of a SP free fall.
Scotcha, may need to tail swallow then (assuming it will be an option at the time). Can't imagine SP rising too much until underwriters are secured, although who knows.
Ha ha, surely still a gamble until RI complete and we have a new SP baseline. Then an investment.... Maybe...or perhaps after a couple of years performance are demonstrated.
In the Guardian and BBC News as well. Obviously media field day with Amigo managing to avoid a fine.
Viking, it is probably just the FCA being pragmatic. It has been some weeks now since the call and still no underwriters announced. I guess this unknown fine was a big factor in securing anyone and time is ticking down. Imposing the fine would have definitely killed Amigo off. Amigo resuscitated gives the best redress to those that were wronged.
I do not think this is a good move. My understanding is that the process currently in motion is legally agreed and would require going back to court to submit a new proposal. Any new proposal will also require agreement of the FCA (unlikely as they pushed for the dilution) to get approved. Realistically, the time it would take to even get started on such a course would get us past the deadline for the RI and we would revert to wind down scheme - we get nothing.
Hopefully, all we should really lose in the RI is influence ( unless you take up all your rights), as usually you have the option to sell rights if you don't want to take them. For minor shareholders with little influence already, i don't see much issue here, the biggest risk at the moment in my view is not securing the underwriters for the RI.
If we are going for an EGM, I would have thought it should be related to ensuring the RI goes ahead, so we don't end up in wind down.
Stevie, it depends how many rights each shareholder takes up. Any unsold would be bought by the underwriter (assuming they can get the underwriters of course). So a shareholder could choose to not take up any and it would still go through (obviously at a loss of %), hence I understand the BOD are looking for investors to underwrite the entire £45M. I assume we will be able to sell rights if not taking them all up.
Seems reasonably positive. I imagine validation of the vetting processes and FCA contentment would help with securing the investors.
I find it odd though that it seems to be soley up to the board to decide if they don't think they can secure investment and wind up the company. Surely it needs at minimum a court agreement? Some kind of independent process? I appreciate it was in the scheme agreement, but did shareholders bestow this power on deciding when to give up?
At this point a regular call does seem sensible. The last RNS issued looks like a direct response to the questions/comments raised in the shareholders call. Better engagement between board and shareholders could make all the difference at this critical stage.
Luckysods, the £45M is coming from the RI. So you just need to buy your 19:1 rights.
Luckysods, no I believe the 19:1 dilution is part of the legal agreement.
In retrospect, they said that they are talking with multiple investors interested in underwriting a minor stake. What they didn't say was how many of those investors were firm commitments and if they had full coverage of the £45M yet.
Any consortium from existing shareholders would only have to plug the gap, not underwrite the full £45M. And the amount of actual cash that would have to be stumped up would be dependent on the take up of the RI.
Just in case anyone missed the call/transcript and was unclear. The investors being sought are to underwrite the RI. The RI is to raise the £45M, but any unsold rights will be bought by the underwriters.
Presumably, because of the 19-1 dilution, that has been made part of pre-requistes to relaunch there can't be a partial funding, all shares will need to be bought.
Am I losing the plot here? The RNS suggests that if they don't get investors in place for the funding, then it will go to wind down the business. But, what about the RI? Surely that was about raising some cash as well as dilution of shareholders? Is it it just a game to put pressure on the shareholders to approve whatever is asked for when it comes to the RI?
Do you think there is any point in tail swallowing, rather than selling off some shares so that you can take up all your rights? That is on the assumption that the RI price will be less than the SP. Would be interested in opinions.
Thanks Magpies! I guess the capital for RI will only go so far, the credit access and debt was scaled back significantly since the first hearing, so presumably they will seek to put that back in place in order to transition to full scale business.
Hi all, long term lurker here. Does anyone have an opinion on the RNS in relation to "meetings with potential investors in relation to a capital raise are now also underway". Does this mean that the 19 shares being issued per current share, may be sold directly to a large investor rather being offered to existing share holders? In this case, would it require current shareholder approval or does the board already have that power?