Member Info for dflynch

My understanding is that TRMR, as an Israeli company, operate under a different set of rules to a UK company.

I also understand from my limited research that it is not necessary for TRMR to seek prior approval of shareholders if the company wishes to buy back its own shares.

Now whilst it would seem perverse to raise capital in the USA, by issuing the IPO shares, and then using the raised capital to repurchase shares from the UK market, the repurchase would forestall the current activities emanating from the USA. This would benefit all shareholders, wherever they trade.

Happy to be corrected and for Ofer Drucker and the Board to “earn their brass” by authorising a large and immediate repurchase of shares on the London market.

I await the future RNS that this has occurred.

“,,, require the Fund to "formulate proposals...to reorganise, reconstruct, or wind up the Company.”

I rather think that the fund will be restructured as part of a reorganisation of assets!

The problem with a total wind up” of the fund is that the quantity of shares delivered into the market in order to monetise one of the shareholdings is very likely to have a detrimental effect on the market and share price. Unless, of course, the sale is “out-of-the-market” to another investor at a price that reflects the current share price – or with a small premium. Note the problem faced by Woodford – late of this parish

CA could of course distribute all its share-holdings in specie to individual CA shareholders and allow them to make their decision to sell or retain. Messy, but a possible option.

Alternatively, as part of a restructure, CA could create a new fund and choose to place selected shareholding or shareholdings into that fund. Again, this would have to reflect the current share price. Proceeds from this particular transaction, and other disposals, would become available for distribution when the fund is “wound up” after 30 June 2022.

Problem of course is financing the transaction! For example, if one of the investee companies had a market cap of say £84million and CA has a 25% shareholding in that company then CA would have to jolly-up £21million to finance the initial part of the venture. Obviously, if more of the current investee companies are retained, or new ones identified, then more finance would be required.

Would this be a problem to a management that has successfully created wealth, in the past, for the shareholders?

It would appear that many of CA’s shareholders were content to continue but are now faced with receiving wads of cash in the second half of 2022. What might they invest it in?

Well on the 30 Sept HUR’s contribution to the NAV of a CA share valued at 152.85 was 21.7p!

I leave the future speculation and calculations to others – as previously stated we live in interesting times!

We live in interesting times!

LTT Fri 1226

Your contribution “Interesting read about Hurricane, their May 2021 presentation about the wind down of Lancaster. It would free up the BlueWater FPSO from June 2022, of course the timing would be off for us, but looking at the Lancaster field they have a small footprint, just two producing wells that were producing 12-14k barrels a day. I think currently they have only one well online and they have discovered they reservoir is highly fractured, hence they plan to possibly shutdown production and terminate the contract with Bluewater if they cannot come to up with a smaller extension to keep producing.”

Hurricane specifically set out to exploit the fractured basement reservoir of the Lancaster field. They certainly did not discover that it was highly fractured after drilling and that this fracturing was problematic. One well is currently operating at c 11000bpd. The contract extension negotiations for the Bluewater FPSO continues. That it was not extended on the original contract expiry, and that the previous BoD produced a presentation to wind-down Lancaster was, allegedly, a fraudulent scam by the BoD to deprive shareholders of their investment. The matter was settled in the Courts when the shareholders won. The non-executive members of the BoD resigned before they were sacked at a scheduled EGM.

I find mis-information unhelpful so I thought you might like to be corrected as the basis for your arguments lack credibility if they are based on information.

AGM 22 November - which I believe is this month - except for those who reside in last month / Hull :-)

With regard to Saba Capital Management I rather think that they might have had, as yet undisclosed, a change of mind regarding their intended action, as promulgated in the 25 June RNS.

Hurricane, although it might not look like it at the moment to everyone, are an attractive investment / acquisition opportunity. As stated in CA’s RNS today, and commented upon on the Hurricane BB, the previous BoD need to be held to account for the losses of approximately US$111 million. These losses are equivalent, according to CA, to more than 4p a share. Furthermore, the tax losses and allowances, which would feature in the event of a corporate transaction, are equivalent to 56p a share. That’s 60p a share of value and whilst that might not be reflected in any offer for HUR it is reasonable to expect a large percentage of that figure - which would be a multiple of today’s share price.

An investment in Hurricane at the time of the Saba June letter looks very different from how it can be viewed today. Particularly once the CB issue is dealt with, at maturity or before. Indeed, as CA comments in the RNS “… the Fund believes that Hurricane's prospects have been transformed.”

So, as a Saba investment decision maker, would it be justifiably sensible to continue and crystalise the CA fund investments, given CA's achievement with the Hurricane investment and the future prospects of that particular investment?

If CA were to wind-up their fund the market would have difficulty in redistributing the Hurricane shares – leading to a substantial fall in the SP (see Woodford, late of this parish). The investment would have been abysmal and despite the past profits on the investment of £43million, a return of capital c£10million might only be possible. This might be very much less than the overall amount invested overtime.

Of course, Saba might have someone in the wings ready to take these shares as part of an acquisition strategy – but would the other shareholders and the Oil companies allow this to happen?

The CA SP at the time of the letter was c100p today, four months later it is c115p. The NAV of the fund at the end of June was 146.81p per share and at the end of September it is 152.85p.

So do I invest in CA or HUR for the best return?

But if Saba is acting in concert with Kerogen then we certainly do live in interesting times!

Re Sedaka

But the cost of getting drunk goes down!

Gets more like Russia every day.

I rather think that Saba Capital Management might have had, as yet undisclosed, a change of mind regarding their intended action, as promulgated in the 25 June RNS.

Hurricane, although it might not look like it at the moment to everyone, are an attractive investment / acquisition opportunity. As stated in CA’s RNS today, and commented upon on the Hurricane BB, the previous BoD need to be held to account for the losses of approximately US$111 million. These losses are equivalent, according to CA, to more than 4p a share. Furthermore, the tax losses and allowances, which would feature in the event of a corporate transaction, are equivalent to 56p a share. That’s 60p a share of value and whilst that might not be reflected in any offer for HUR it is reasonable to expect a large percentage of that figure - which would be a multiple of today’s share price.

An investment in Hurricane at the time of the Saba June letter looks very different from how it can be viewed today. Particularly once the CB issue is dealt with, at maturity or before. Indeed, as CA comments in the RNS “… the Fund believes that Hurricane's prospects have been transformed.”

So, as a Saba investment decision maker, would it be justifiably sensible to continue and crystalise the CA fund investments, given CA's achievement with the Hurricane investment and the future prospects of that particular investment?

If CA were to wind-up their fund the market would have difficulty in redistributing the Hurricane shares – leading to a substantial fall in the SP (see Woodford, late of this parish). The investment would have been abysmal and despite the past profits on the investment of £43million, a return of capital c£10million might only be possible. This might be very much less than the overall amount invested overtime.

Of course, Saba might have someone in the wings ready to take these shares as part of an acquisition strategy – but would the other shareholders and the Oil companies allow this to happen?

The CA SP at the time of the letter was c100p today, four months later it is c115p. The NAV of the fund at the end of June was 146.81p per share and at the end of September it is 152.85p.

So do I invest in CA or HUR for the best return?

We live in interesting times!

Have I got that wrong?

From CA's RNS NAV @ 30 Sept

Hurricane has suffered losses of US$111 million equivalent to 4p per share.

Hurricane has tax losses and allowances that would be a material and factor in any corporate transaction. This could be a substantial amount and US$ figures of c468, c707 and c383 are mentioned giving a figure for discussion of circa US$1558 million. This gives an equivalence of 56p per share based on their figures.

Sort of puts the current undervaluation of Hurricanes share into perspective.

Please point out my error because the market doesnt seem to agree with this indicative valuation.

From CA’s RNS

Hurricane is an oil exploration and production company targeting naturally fractured basement reservoirs in the West of Shetland. The Fund has been an investor in Hurricane since 2013 and has to date realised profits of £43 million.

The Fund notes that Hurricane is evaluating options to bolster production from the Lancaster field, as well as pathways towards development of the substantial Lincoln discovery asset. The Fund believes that in addition to the existing P6 well, substantial quantities of oil can be recovered from the Hurricane portfolio.

Together with the $17 million spent on a restructuring plan that both Crystal Amber and more importantly the High Court found to be inappropriate, the Fund estimates that the Company has suffered losses of approximately $111 million, equivalent to more than 4p a share. The Fund believes that an investigation should determine grounds for redress and recoverability of this amount.

The Fund has asked Hurricane to assess the financial implications of these tax losses and allowances in the event of a corporate transaction. The Fund believes that the quantum may be very substantial.
12 months ago, the price of Brent Crude was $37.50 a barrel. It is now $85 a barrel. With production now running at more than 3.5 million barrels per annum, the Fund believes that Hurricane's prospects have been transformed.

I wonder how the market will react to this?

Correct

The problem is with the NOMAD who have stated that they will resign if the current CEO and CFO are removed without suitable replacements.

It would then be necessary to get a new NOMAD and the CEO and CFO replacements acceptable to the new NOMAD.

Far better to get replacement CEO and CFO acceptable to the present NOMAD and then dispense with the services of the present incumbents - particularly if it can demonstrated that their dismissal is a consequence of their performances as directors of the company.

Patience and the ability to deal with interesting times is what is needed here!

Not a mention of BYOTROL!

I wonder if this is why the SP is languishing; or is it because currently the BYOTROL website Product information page / link takes you to https://medi-mark.co.uk/products where you are greeted by the message “Not Found The requested URL /products was not found on this server.”

It’s the AGM on Wednesday morning - perhaps there will be explanations then as to the low profile the company has in the investment market and its consequential effect on the SP!

Careful - stack exchange information is based on American law practice

Completely barking strategy - it's not any greener than burning the Selby coalfield coal with the technology that now exists!

Time will tell

And as a reminder; the Companies Act 2006 specifies the general duties owed by a director of a company to the company.

S171 - Duty to act within powers

S172 - Duty to promote the success of the company

S173 - Duty to exercise independent judgment

S174 - Duty to exercise reasonable care, skill and diligence

S175 - Duty to avoid conflicts of interest

S176 - Duty not to accept benefits from third parties

S177 - Duty to declare interest in proposed transaction or arrangement

I don’t know if this is a relevant channel to travel in bringing the previous non-executive directors to account!

https://www.gov.uk/government/publications/reporting-misconduct-by-companies-directors-and-bankrupts-to-the-insolvency-service/reporting-misconduct-by-companies-directors-and-bankrupts-to-the-insolvency-service

Particularly the following extracts.

The Insolvency Service has powers given to it by law to consider complaints about:
• live companies where we’ve received reports of serious corporate abuse such as significant misconduct, fraud, scams or sharp practice in the way the company operates

Anybody can report misconduct relating to the above to us.

We will assess any information reported to us and consider whether to carry out further investigations.

We may take further action against the bankrupt, director or company if we find things that concern us during our investigations.

We can only investigate complaints that we have the legal powers to deal with and may suggest you contact another public body or pass your concerns on ourselves if this is appropriate. Please make it clear in your complaint if you don’t want us to do this.

If our enquiries show that a criminal offence may have been committed, we may send a report to the appropriate prosecuting authority (eg the police or our Criminal Investigations Team). That authority will then decide whether to carry out a criminal investigation, and criminal proceedings may begin. You may be asked to give a formal statement before proceedings start.

If you wish to make an anonymous complaint, we may still be able to submit the matter to the relevant investigating authority. However, please note that they may only be able to take further action if they have suitable evidence or an appropriate witness, or both.

Don't see a further tender offer for the bonds but perhaps CA is in the market for them?

It would reflect their confidence in the maturity payment being made and be a nice little earner for a c10 month investment at the present discount.

Could be that some other party has a similar thoughts?

Interesting times!

The reporting will be for the period up to the 30 June 2021.

The extension may have allowed the new auditors to get a better feel for the company. Consequently, if asked by the authors of the report, the auditors might be in a position to give guidance on the tone and content.

But somehow I doubt it!

Just an observation

“…has signalled its intention to vote against continuation and to reorganise, reconstruct, or wind up the Company.”

Intention – relevant at the time the statement was made as Hurricane’s prospects were precarious. Subsequently the Hurricane scam was rejected by the Courts, oil price has increased markedly, World economics are changing rapidly and so have the prospects of Hurricane. CA continues to increase its Hurricane investment. What is happening between SABA and CA we are not privy too. It was my intention to fly around the World next year – but will it happen? Things change! So much for past intent becoming reality!

Reorganise – this would allow CA to reconfigure the fund structure whilst retaining its investment in certain preferred investments with a view to enhance long-term shareholder value through active engagement with companies.

Reconstruct – change from an AIM-listed activist fund investing predominantly in small and mid-cap UK equities to a major oil and energy fund exploiting opportunities to enhance fund shareholder value through active long-term engagement with companies.

Wind up the Company –The present Discounted NAV might be in excess of what would be obtained in the event of the investments being liquidated. I refer to the problems faced by N Woodford of this parish when it was necessary to turn fund investments into cash!

It is the old Chinese curse once again – we live in interesting times!

FYI

https://www.telegraph.co.uk/business/2021/10/10/ey-sounds-alarm-sanjeev-gupta-backed-tidal-energy-firm/