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The way the solar assets would have been financed is with a mixture of shareholder loan and equity investment. Any distributions from the project later on are then used to pay the shareholder loan interest first and any excess is paid as a dividend.
The two instruments are usually thought of as "stapled" together i.e. the same entity will hold the equity and the shareholder loan. It looks like OPG as sold the equity portion but not the shareholder loan which is unusual.
The only reason I see for it to be structured like that is because the party acquiring the asset is interested in claiming that it owns 30% equity stake in solar assets with a capacity of 62MW. So on a pro-rata basis it has added c. 20MW to its portfolio at little to no cost. The power producers especially listed ones are typically focused on MW's Installed. It could also be that they didnt have readily available cash to buy the shareholder loan and that will come later.
The good thing is that essentially what this is implying is that OPG's investment in the solar assets as been valued by the acquirer of the equity stake at the value of the shareholder loan (£10.8m) + £210,000 so a total of £11m. This is higher than I expected, I value the shareholder loan + equity in the solar assets at ~£7m.
Already at 20m Shares, 2nd highest traded volume in a day in the last 12 months (only largest day was post signing of the AA JV in April 2023). Either the rumoured placing has leaked or the swedish fund is selling all that it had left
RF has some credit for having retained all his shares (actually bought a few more) since IPO. The IPO was at 5p and over the last 3 years, CRTM has traded all the way up to >30p. How tempting must it be for a CEO owning ~20% of a company to have at least partially sold some shares throughout this time? Even more so with his background given he's a Finance guy he knows exactly what valuation is and how volatile share prices can be. The fact that he's not sold 1 share means he actually believe this is worth quite a bit more than current levels and even levels we have consistently been at in the last 3 years. Yes, he probably overblows a lot of the news and delivery last few months have been questionable but hiccups do happen and I'm confident he'll find a path to overcome them and deliver shareholder value.
Never replied to me either. I've even sent an email to the Chairman and nothing either.
Need to find out who is behind Prana GP Limited and Talisman 37 Limited and get them to start pressuring the Guptas to focus on share price as well. However, the reality is they bought in at January 2023 when OPG was trading at 6p. So within 12 months they have doubled their investment from ~£2.5m to ~£5.0m so don't think they'll care much if this moves sideways for a couple of years.
From my calcs still about ~10,000,000 shares left (
Good news comings shortly, otherwise this wouldn't be in the calendar...
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Join us for an InvestorTalk with Russell Fryer from Critical Metals PLC (LSE: CRTM) from 9-920 AM EST on Wednesday, March 27, 2024
In other developments, FQM is making progress with its balance sheet initiatives, including the sale of smaller assets and minority stakes. CEO Tristan Pascall reported strong interest in the sale of the Las Cruces mine in Spain and the Zambian business. The Las Cruces sale is said to be well advanced.
First Quantum is also evaluating the possibility of a minority investment by strategic investors in its Zambian operations. Pascall expressed confidence in the investment climate in Zambia and reaffirmed the company's commitment to the S3 Expansion at Kansanshi.
Why are you including past costs for 2022?
30 June 2023 (Interim Position)
- Cash of £60k
- ST Investments of £230k (Listed Stock Positions)
- Trade Receivables £1.1m (£150k of Tingo Shares and £1.0m Shares to be issued in the listed vehicle that bought Casa, no update on this I don't think)
- Of this hence there was effectively ~£400k of liquidity
The payment from Anglo was not in the Interim Accounts, you can see no cash came in during those 6 months. So the expectation was that it was still at Unico Minerals JV level and hadn't been upstreamed. The payment to ARC was £1.9m
So that payment + liquidity at 30 June 2023 means Arc has liquidity of ~£2.3m. Another £500k will be received from Anglo in April 2024 so a total of £2.8m of Liquidity.
This will be used to pay:
~£1.25m (H2 2023 Cash Costs)
~£1.30m payable due to various members of the management team for some options they surrendered (note this may get extended if they act in good faith)
~In 2024, assuming a reduction in professional fees, there will be an additional £2m of Cash Costs
So there is a £1.7m funding gap until end of 2024 (if there is not an agreed delay for the options surrendered compensation).
£4m run-rate of admin expenses is NOT £4m of Cash-Outflows to cover admin expenses. The £4m is an accounting number in the Income Statement, not a number in the Cash Flow Statement.
There isn't a breakdown of admin expenses in the Interim Report (not a requirement) but there is one in the Annual Report for 2022. I would say the actual CASH Admin Expenses are:
Director Fees - £685k
Office Expenses - £114k
Travel and Subsitence Fees - £25k
Professional Fees - £787k
AIM Costs - £151k
Audit Costs - £117k
Other Expenses - £201k
ZACO Admin Costs - £129k
Zamsort Admin Costs - £3k
Handa Admin Costs - £36k
Alvis-Crest ADmin Costs - £7k
So its more like £2.5m than £4.0m of Cash Admin Expenses. And professional fees incurred in 2022 were surely related to the JV Anglo deal so those will come down dramatically now that its done.
The market is hot out there in Zambia....however the terms of this deal against ARCM are insanely different.
FQM is effectively getting 51% stake in each license if two conditions are met:
1) They spend $500,000 in initial exploration costs
2) The indicate mineral resource from initial exploration has to show >300,000 tonnes of contained copper in each license
Cheap for FQM....
Nice find on the Riksförbund (Lärarnas) divestment. Statement was from 31 January 2024 saying they had begun divesting so probably started in late January.
They own 61,287,240 prior to this announcement. On average post November when the Anglo JV was completed, the number of volume on aveage per day in ARCM is ~3,000,000 Shares. Since 30 January to now, it has increased to ~6,000,000. The excess volume since 30 January is about ~40,000,000 shares. Which means there's still a bit more to go but hopefully 2/3 of the way done. Don't think they need to formally disclose the reduction in holding as they own 4.97% so below 5%.
Think I've finally understood why the lack of move up on OPG despite the positive results and all the Coal stocks in India booming for a good few months now.
We obviously had M&G Investment divesting of 47,699,617 shares (~12% stake) last year because they no longer invest in coal related stocks as part of their Investment Policy. Of those, 40,000,000 found their way to Prana and Talisman GP (still unsure who is behind these entities). The remaining 8,000,000 shares were absorbed by us/retailers in the market.
The 4th largest shareholder is Pension Services Limited (13,177,222 or ~3.3% stake). Per companies house this was the Investment Manager of the British Steel Pension Scheme with the relationship terminated last year and the Pension Services Limited company formally dissolved in September 2023. Legal & General were appointed the new investment manager of British Steel Pension Scheme in September 2022 which means they are most likely in charge of the equities side including the legacy investment in OPG. In June 2022, Legal & General made a commitment to not invest in coal related stocks so OPG doesn’t meet that. Which means they are more likely in the process of selling / or have sold the ~3.3% stake.
Close Brothers Asset Management (6,921,819 or 1.7% stake) also have a coal exclusion policy and have been trimming their OPG exposure recently. They also seem to have a lot of internal problems (refer Close Brothers Group share price) so again wouldn’t surprise me if they are in the middle of liquidating the full position.
Time for the Guptas to sell this in its entirety and we would all be very happy with Adani last time in 2020 offering a rumoured ~£120m for OPG or 30p per share.
Results are out in BSE...some more profits to show for the quarter as expected. Slightly higher profits than prior quarter driven by a monster PLF.
Over the last two years the big seller was M&G Investment Management which disposed of over 12% stake in 2022/2023. They are out of the way.
If there is still a large seller could be Close Brothers Asset Management which still had about 2% stake as of July 2023. If you look at their stewardship policy online they say they don't invest in Coal or Tobacco for example so probably will need to divest of this by a certain date.
He is retaining his CFO role presumably. Also he seems to be on a CFO panel in February so would be weird if he had resigned and was participating on that.
They were allegedly approached regarding a buyout during COVID-19 (August 2020) by Adani. Rumoured price was 1,000 - 1,200 Crore which converts to roughly £110m to £132m. Obviously Balance Sheet has improved materially since then as well
Think I heard them say the October PLF was 91%(?) the highest ever in OPG's history.
I'm saying the opposite. Not worried at all....
Not surprising, Management confirming that based on the latest guidance from the Indian Government, a new thermal coal power plan would cost £820k per MW to build, which would imply a replacement value of £350m for OPG's plant.
Makes sense for the market cap to be at £50m lol
Another bullish signal, now by the largest credit rating agency in India (and rating OPG's debt).
Crisil Ratings Team Leader Mithun Vyas said, "Overall, we expect coal-based power plants rated by us to witness over 20 percent on-year rise in cash flow from operations (CFO) this fiscal year"