Member Info for Cranleigh

I agree, chilting - Euroclear shows the June average number in CREST as 6,878,793,466...so the reduction in % level of shorts appears to be real.

Whether it will be sustained is another matter; the holders of the new CBs may not yet have got their hedging to the level they would wish, especially given the current level of SP.

He disappeared as a member from the old LSE site some 3 months back, but still appears as one on the new site. No posts since 5 Apr (but PLENTY before!).

What I find hysterical is that SL (remember him?) comes in as #3 in the list of top rampers. Surely some mistake (Ed.)?

wwguk, as you may have guessed, I am not a fan of so-called Technical Analysis, especially when, as in this case:
- it concentrates on share price not market cap, so takes no account of the large number of new shares issued (let alone issuable) due to Stage 2
- it produces such a laughably wide range of possible outcomes as to be certain to be “right”.

A forecast share price somewhere between 4p and 46p, the latter subject to potential upward revision, seems “safe”. And also totally baseless and useless.

Fox, you are confusing the intended high-yield bonds with the recently-issued 5% 2027 Convertible Bonds whose characteristics are briefly set out on page 234 of the Prospectus.

As each such bond is a nominal $200,000, they are the domain of IIs (including hedge funds) and professional investors, not small PIs.

Their main pros, as I see them, are:
- 5% coupon paid quarterly
- debt in escrow until Stage 2 completed
- attractive conversion rights including “make whole” cash payment of 3 years’ interest ($30K) on conversion
- protection of conversion rights against any further dilution
- ability to close short positions by conversion rather than buying in the market

And their cons are:
- err, that’s it.

IMHO

Fox, you are confusing the intended high-yield bonds with the recently-issued 5% 2027 Convertible Bonds whose characteristics are briefly set out on page 234 of the Prospectus.

As each such bond is a nominal $200,000, they are the domain of IIs (including hedge funds) and professional investors, not small PIs.

Their main pros, as I see them, are:
- 5% coupon paid quarterly
- debt in escrow until Stage 2 completed
- attractive conversion rights including “make whole” cash payment of 3 years’ interest ($30K) on conversion
- protection of conversion rights against any further dilution
- ability to close short positions by conversion rather than buying in the market

And their cons are:
- err, that’s it.

IMHO

Myo, a holder has to declare when their interest is at least 3%, and when they cross each 1% threshold after that (4%, 5% etc) - whether they cross it going up or down. There is no concession for delaying reporting "while still selling" (or buying) - how long would that piece of string be?!

Don't forget that the 7.2% will have (a) resulted from an expectation from the Placing (and if Jupiter didn't follow through, or only partly, on their promise, JPM will have taken some of those shares as underwriters), and (b) their Placing shares will have been scaled back by 10% due to the PIs' Open Offer. Also, they may have been making some sales in May, while staying above 6%, in anticipation of "replacing" them with Placing ones at 15p.

So maybe they are still between 6% and 7% despite having participated in the Placing as you were told. That said, they haven't IMHO been too diligent in the past about issuing TR-1s to Sirius.

Seems to me that only CF, with his triathlon the previous day, and RS, with all his pole vaults (you had to be there!), would have had any excuse for lack of energy....and they were still full of oomph!

Duracell, I don't know about the size of the B-rated bond market, but the Bank for International Settlements suggest that total bonds outstanding at Q4 2018 and issued by UK non-financial corporations were $388bn. A big pool indeed.

Whatever kept you silent so long, PAAA?

Surely not a wee bit of dilution (as some seem to view it) or a brief, interesting discussion about how many excess shares I’ll get/have got/when will I get the balance of my cash back, or even where and when is the AGM and how do I get admitted?

Welcome back!

I think it’s more about a bit of profit-taking, the actual and prospective (CBs, Gina...) dilution and the relative attraction of CBs than it is about the proposed high-yield $500m.

Would outfits like Capital, Norge, Pelham etc all take significant equity stakes if they thought this $500m issue managed by JPM carried a serious risk of not going through? They could all take a slug of it themselves if it seemed to be struggling!

Apologies, AscotMatt. It seems my calculator doesn't like more than 10 digits, so took my entry of 10bn as 1bn!

"20,000,000 tonnes x 120 USD per tonne profit / 10billion shares
= 24 cents per share before Gina / Taxes / Royalties."

I think your decimal point has slipped, AscotMatt - that's $2.40 in my book...for what it's worth.

Myo, I'm pretty sure each new bond gets 818,666 shares...but as that is a rounded number of shares (based on the initial exchange rate and a 25% premium to 15p), if a holder converts more than one bond at a time they may get the odd share or two more in total. But not as many as ten - I think you are right and there is probably a typo in the RNS.

As well as the benefit you point to, the holder also gets a $30K "make whole" payment on conversion - 3 years' interest at 5%. Not to be sneezed at.

So my arithmetic IS wrong ...it represents the conversion of 21 new bonds, 4% of the 533 exchanged bonds. Soz.

Myo, I agree with most of your figures FWIW....

Of the original 2,000 ($400m) old bonds, 1,221 ($244.2m) remained unconverted when Stage 2 was announced.

533 ($106.6m) of those were exchanged for new 23 May 2027 bonds, which carry the right to convert each into 818,666 shares (subject to rounding in the case of multiple conversions).

So today's announced "four" conversion notices into 17,191,975 shares must represent 17 new bonds, which is 3.2% of the 533 exchanged bonds.

Then again, it's early!!

- oh, and 3 years interest paid as “make whole” if holder converts by a certain date!

Indeed, the coupon will no doubt be attractive.

Though the CBs are IMHO very attractive for the big boys:
- no risk until Stage 2 is fully complete because held in escrow
- no dilution risk - conversion rights adjusted if further equity is issued before conversion, for instance due to build overrun
- convert at under 20p
- running yield 5% paid quarterly

Yes, GK, that is clear from the escrow conditions applying to the new CBs.

But Myo was building a whole scenario (holding some back, sweeteners etc) on a wrong assumption, that these new CBs had not yet been issued. They have - albeit maybe JPM are holding some!