Charles Jillings, CEO of Utilico, energized by strong economic momentum across Latin America. Watch the video here.
Agreed, why no dividend and/or return or capital ? Also, why the fixation on on a liquidation ? As i have mentioned before surely it is better to let the directors sell all the remaining investments and then go into liquidation , rather than let the liquidator sell the investments at potentially a fire sale value
Don't forget that the RTW share price will adjust on completion for the issue of the new shares to Arix holders
Agreed.
I don't think the regular retail platforms support trading on the TISE so we are all going to be forced sellers !
What do people make of the news of the delisting from the LSE and admission to TISE ? Thanks
HNY everyone
Yes, i take the point that the liquidation may be "unconventional" to suit the particular circumstances of Dunedin. Presumably the Directors will recognise that retail shareholders form the majority of the shareholder base and will structure the liquidation accordingly.
Now trading ex div which partly explains the lower SP, but still looks good value to me
Hi both,
Delisting can happen at any time, it doesn't require a liquidation. If the Company enters a voluntary liquidation control would pass from the directors to the liquidator and delisting would then be their decision. The significance of a voluntary liquidation is that the shareholders vote for it and the company is solvent - but it is still a liquidation under the control of a liquidator.
To me it would make most sense if the bulk of the assets are distributed while listed and then ,if the liquidation is going to drag on, consider a delisting. If the shares were delisted today the deemed buy/cost price outside of the ISA would be c510, with a potential distribution of around the NAV of 617. So this would be a taxable gain of 20%. The situation would be even worse if some of the distribution was by way of dividend rather than capital. Further the proceeds when received will then be permanently outside of an ISA and will take time to reinvest back into an ISA (£20k annual limit)
The majority of Dunedin's share base is retail investors so the risk of a delisting is a big issue. Of course the problem would be that the institutional shareholders would vote a delisting through since it doesn't impact them, while retail shareholders are notoriously poor at voting.
I have contacted Dunedin to make them aware that the issue of delisting/lost of ISA is an important one for their shareholder base. Might be useful if you both did likewise ! - there is a contact email on the website.
I know there is no mention of a delisting at the moment but i would prefer to make the point now and avoid it, rather than have to fight a vote, which as i say will be problematic with institutional shareholders involved.
Re the tax treatment outside of the ISA, I too have never seen HMRC give guidance on what happens on a delisting. That said their published advice re CGT on unquoted shares is that the value should be what you would expect from an open market sale if one was possible. In which case i really can't see how HMRC can argue against using the value from the very last open market trade before the shares were delisted
Reading the circular, if you opt to convert into HHI shares this is done at the HHI NAV value rather than the lower SP. So why would you do this ? Aren't you better to take the cash and buy HHI in the market ? Or am i missing something ?
Thanks
If they go into liquidation the decision as to whether to delist will be made by the liquidator, not the directors since they have relinquished control.
HI Both,
I am not sure the listing fees are that much. if i use the calculator on the LSE website i only get c £10k
https://www.londonstockexchange.com/raise-finance/equity/how-list-equity/calculating-fees
So I still fail to see why a liquidation would be inthe best option of retail shareholders (is it being driven by the interests of the investment managers and institutional shareholders ?)
Re CGT, on leaving the ISA the cost base is deemed to be the market value on the date of leaving. see IC article below. There is certainly a negative in that if a significant amount it will take quite a few years to reinvest the funds back into an ISA wrapper.
https://www.investorschronicle.co.uk/ideas/2023/05/08/i-own-shares-in-a-delisted-company-do-i-have-to-pay-cgt/
I own shares in a delisted company – do I have to pay CGT?'
What happens to shares if they are removed from an Isa?
May 8, 2023
by Leonora Walters
What is the capital gains tax (CGT) treatment of shares that have been removed from an individual savings account (Isa) due to a delisting, which are then sold? What is the deemed cost?
I hold Allied Minds and another company whose shares delisted last year. These were removed from my Isa when the companies delisted and I now hold them in certificated form. My holdings' value was at a loss when they were in my Isa. So is the cost for CGT purposes the cost when I bought the shares within the Isa, or is it the deemed value when the shares were removed from the Isa? JL
Craig Harman, partner at Perrys Chartered Accountants, says:
The income received from investments held within a stocks and shares Isa such as dividends is free from UK income tax. And investors are not subject to CGT on any gains made from the sale of such investments within Isas.
Although it is possible to invest in a wide range of investments within an Isa, this is subject to certain restrictions. Shares, for example, must be officially listed on a recognised stock exchange, or admitted to trading on a recognised stock exchange in the UK or European Economic Area. If such shares are delisted from a stock exchange they can no longer be held within an Isa and must be transferred to the investor, as has happened in your case.
Under the Isa regulations, when the title to an account investment is transferred from the account manager to the investor, there is a deemed disposal of the shares and a subsequent reacquisition. For CGT purposes, this effectively means that the investor is treated as if they acquired the shares based on the market value at the date of the transfer. This value will form the base cost for any future sale.
If the shares increase in value following the transfer, it will give rise to a gain which is subject to CGT. Equally, if the shares fall in value before a sale this will result in a loss which may be offset against other gains now or in the future.
In your case, the shares were sitting at a loss in your Isa pri
Hi PB,
The RNS says "the Board and its advisers are exploring whether to wind-up the Company and return cash to shareholders, including the proceeds of the Premier Hytemp realisation, by way of a members' voluntary liquidation."
My understanding is that a member's voluntary liquidation will require the appointment of a liquidator/insolvency practitioner, with the power for "running" the Company passed over to them.
Hi PB & CIT,
I am still concerned that a liquidation would mean that control over the sales process would move from the directors to the liquidators , who may prioritise a quick payout over achieving fair value for the remaining investments. As shareholders we will be ceding our control to the liquidator. I don't understand why the directors don't continue to sell off the investments and then use a liquidation to distribute the assets. I would rather have the directors sell the remaining investments than a liquidator.
I guess we will have to see what the merits of the proposal are and vote accordingly.
Yes, a tender at this stage would be an unnecessary cost , better to dispose of the remaining investments and liquidate. The disposal would also release the £9m commitment for distribution.
The latest RNS says "in particular, the Board and its advisers are exploring whether to wind-up the Company and return cash to shareholders, including the proceeds of the Premier Hytemp realisation, by way of a members' voluntary liquidation." This makes it sound as if the liquidation would happen without disposing of the remaining investments, with just the Premier Hytemp cash returned ? What would happen to the remaining investments ?
Yes, still a good price. From the latest RNS looks like there won't be another tender but rather a liquidation. Why they are investigating a liquidation (controlled by the liquidators) rather than continuing the sales strategy (controlled by the directors) is not clear to me.
Struggling to find the tip in this week's issue. Could you give me the page number please. Obviously tipped somewhere today due to the jump. Thanks
NAV $68m v market cap of £7.5m.
Something not adding up !
Well said shareaction. Further ST who has backed this share is on holiday and won't be commenting until the New Year at the earliest. So much for IC keeping up with events.
HI,
I am having problems finding the conversion ratio of Electra to Hostmore shares . Has anyone any detail on that please
Doesn't look good:
PCF announces that trading in the Group's shares has been temporarily suspended while the Group undertakes a further review in relation to its financial controls and reporting processes. This work is progressing and a further announcement including regarding the timing of the full year results will be made in due course.
A useful discussion. Can I add:
In 2019 financials issued in May 2020 the CFO stated :
"JOG’s cash position was £12.3m as of
31 December 2019. Our cash comfortably
funds the Company through its currently
contracted work programme of Concept
Select, after which we will launch a sales
process to sell a proportion of our equity
in the Greater Buchan Area licences.
Based on current estimates our cash
therefore funds us through to at least the
end of 2021. This provides us ample time
for realising significant proceeds from a
sales process to secure funds to progress
the project work through to submission
of a Field Development Plan and to
progress the Project through to first oil
and beyond."
From this clear that funds would come from the farm out deal. So perhaps there is some credence to the possibility that the fundraising is not an equity raise. But if this is the case why not issue an RNS that simply sys there are no plans for an equity fund raise.
Either way it is a mess. Any fundraise will now be at lower price and higher dilution level, alternatively a failure to raise will leave the market worried over cash burn and why the fundraise has failed. Particularly as less than a year ago the CFO said there was no rush since there was enough cash until the end of 2021
Something here doesn't make sense. In particular what concerns me here is why they are seemingly looking at an equity fund raise that will dilute significantly more than linking to the sale of a share of the assets as part of farm out.
My conclusion, at the moment we simply don't know ! - not helpful I know. On balance still probably worth the risk of holding, given potential upside.
Looking at the recent presentation I see that the chance of success for all fields ranges between 16% and 30%. What exactly does this mean please ? (is it the probability of just one drill being successful or is it referring to the entire field, regardless of how many drills ?)
Many thanks