Member Info for deltavegatheta

Here's the maths:

- the new company has to be worth at least £30m (source Lunn and the FCA Listing Rules)

- to avoid 95% dilution the value of PPP currently would have to be greater than 5% of £30m, i.e. £1.5m.

- it is difficult to see how PPP is currently worth £1.5m as its balance sheet shows long-term assets of £0m.

- if you look at peer companies in a similar position, e.g. AC8, ASHI, PRIS, ROC they are all trading at a marcap of well under £1m.

Lunn confirmed two things:

- the post-RTO company does need to have assets of at least £30m (FCA Listing Rules)

- the valuations of the current PPP and the RMD assets are "poles apart"

So around 95% dilution does indeed seem likely.

The is no formal "vetting" process for directors, but companies do need to disclose other current and previous directorships and any bankruptcies, see Listing Rule 9.6.13.

CDL didn't do that in Evan's case, it failed to name Pennpetro (I wonder why) and that Tom was a director of Resource Bond II Ltd which is currently being liquidated.

The FCA did nothing to enforce its own rule.

PPP doesn't need to resume trading in order for Lunn to get 50% of Nobel US, it just needs resolution 8 to pass.

Lunn does need the shares to resume trading for any PPP holdings he has to carry any value.

Zag, you are correct I don't know what RMD are bringing to the table, but in order to be a Main market company the combined value of the RMD's and PPP's assets needs to be at least £30m. You can therefore get a good idea what the minimum dilution is likely to be by dividing whatever you think PPP is currently worth by £30m. Looking at comparison companies I don't see why PPP would be worth more currently than £1m.

Moving to AIM is possible (and probably more sensible), but Lunn states it will relist on the Main market.

Ssccss: "so why the performance?"

You can see why Lunn would play along, it keeps PPP alive. It is more unclear what RMD are playing at.

Zag: Where did you get that number from, because the suspension price as you are fully aware +£10 million.

Take at look at AC8, ASHI, PRIS and ROC.

What does PPP have that makes it more valuable than any of them? Remember the latest accounts show PPP's non-current assets worth £0.

The RNS from Oct 15 stated: “admission of the Enlarged Group to listing on the ‘equity shares (commercial companies)’ segment of the FCA’s Official List and to trading on the main market for listed securities of London Stock Exchange plc.”

The Main Market requires a minimum market cap of £30m. PPP currently benefits from a waiver under the Transitional category, but that exemption falls away if it switches categories (see Listing Rule 22).

Looking at other shells on the LSE chasing RTOs (AC8, ASHI, PRIS, ROC) they are all valued at under £1m. If PPP is worth less than £1m today, and the merged entity must clear £30m, existing holders would be diluted to roughly 3% of the new company.

That said, on the evidence so far, it’s hard to see how the enlarged group could credibly support a £30m valuation, so IMHO, the proposed RTO is a non-starter.

ASI: “Unless the AGM is delayed or an EGM is called with proper notice, the board cannot legally install another non-executive in time.”

The board have so far appointed one Executive Director (Kalugin) and no new executive directors.

The two RMD appointees would be executive directors as they will be Non-Executive Chairman and Executive Director (CEO).

So there is nothing in the Companies Act stopping all three directors being appointed before the AGM.

RMD has the right to appoint two directors which I suspect will happen before the AGM. So even if all three existing directors do get voted out there will still be three directors left.

ASI: “The text is from the Companies Act 2006 — I suppose you can’t rely on that either, eh?”

The shares are not held as collateral or under contractual lock-up.

"Pledged shares refer to already-issued shares that are held as collateral or under contractual lock-up. They do not increase the total share capital and do not require new issuance authority."

This isn't what is going on in PPP's case (which is highly unusual). The shares were borrowed by PPP and then sold to new investors without restrictions.

ASI: If you are going to use AI you need to question everything it says. There is warning as such next to their replies for a reason.

Gwilliams316:

So are you saying they should have delayed calling the AGM until all three new directors had been appointed, after completing the regulatory checks? I’m sure if Lunn had done that, you’d have been even angrier.

Rather than dumbly asking ChatGPT everything try looking at PPP’s website where they have published the actual Section 656 report:

https://pennpetroenergy.co.uk/notices-%26-reports

Not that it sheds much light on what Lunn’s plan is.

The detail of resolution 8 is in the "Report to Shareholders under Section 656 of the Companies Act 2006" published on the website.

However it is totally vague and generic, it doesn't give any details (just like the TG group's plans).

Good luck anyone trying to decide which path is the best one!

Zag: If that is the case Delta, why has this aspect not part of the resolutions for the upcoming Agm

It's included in resolution 8. However the AGM doesn't cover everything, for example there is no resolution regarding issuing more shares or approving the FY2025 accounts. Additional meetings will be required.

Don't forget this:

"In the event that the Heads of Agreement surrounding the contemplated new business activity, to be approved by shareholders, continues to advance as it currently is, then it is also reasonable to expect that the Company will be forced to remain in suspension pending that transaction completing. "

Which will need a prospectus, so a lot more to do in addition to the accounts before PPP can start trading again.

"Delta why does SL want 50% of nobel US? If its worth nothing?"

Good question, especially with all the legal claims for outstanding payments.

I suspect it was just a way to move forward and resolve the Petroquest situation. An RTO wouldn't of been possible if PPP still owed $5m.

"why would RMD be in the picture as well as Mendez joining and sticking around, as he hasn't been paid so why bother?"

When a listed company has no assets a reverse takeover is it only option apart from delisting. So:

- RMD wants to reverse into PPP

- Lunn & Menzel have probably been promised shares in resulting company (post-massive dilution)