Sapan Gai, CCO at Sovereign Metals, discusses their superior graphite test results. Watch the video here.
I'm hoping for a lot more than this given there is £3.6BN so £2+/ DGi9 share of retained earnings in Arqiva?
Never mind the fact that Arqiva is a going concern that is throwing off £300M+ in cash per annum, on £800m of net assets!
Seizing effective control of Arqiva pre-float should be the no 1 priority of the board.
or have I misunderstood this?!
This is exactly the transparency I want to see. What Dgi9 needs now is - pretty obviously - more buyers. Buyers will come in when there is clear and evidenced upside potential through cash distributions - i.e income from the portfolio NOT any analysis over 'NAV'. Unlocking the value in Arqiva about the largest potential catalyst to shareholder value, we're hearing NOTHING about it - how exactly do they imagine the shareprice to react and the market price to NAV to narrow.
"carefully chosen words"
Too true. And I've no doubt the scenario is more complex that I am aware of / perhaps can even comprehend.
Which is why I employ 'experts' as managers of my assets!
I would have thought that the alleged Macquarie situation would be an ideal time to force the issue - bizarre that the IPO price is a secondary issue to the IPO itself as a restructure....
""Regarding your email received 28 March, if the VLN has been fully repaid and Arqiva pays a dividend, D9 will receive its pro rata portion of that dividend (51.76% based on D9’s current economic interest). Following your email dated 30 March, we would like to clarify the mechanics around the VLN and dividends. You state that D9 cannot receive dividends before a corporate restructuring or IPO, but this is not correct: until the VLN has been repaid, D9 still has limited rights to Arqiva’s dividends. Specifically, if Arqiva pays dividends before October 2026, D9’s pro rata share must first be used to repay any outstanding accrued VLN interest; once the accrued interest has been repaid, D9 retains the remainder. If Arqiva pays dividends after October 2026, D9’s pro rata share must first be used to repay the total outstanding VLN amount (principal + accrued interest); once the total amount has been repaid, D9 receives the remainder. For context, as of 30 June 2023, the VLN consisted of £163m principal + £7m accrued interest.""
I have put it to them that this is semantics, pure and simple. The board this the only one that can agree to distributions, irrespective of VLN capital paid off, interest etc. Bizarre strategy to he held hostage like this as a dividend focused trust but there you go. Ive put it to Charlotte in the strongest terms: the only reasonanle strategy to Triple point is to agree a positions with other shareholders, and force a restructure.
Im reading on other boards that Macquiarie want to sell their stake in Arqiva....if true why can't DGi9 and them assume effective control of the company with a combined 73% shareholding, insist on dividends, and push towards a float and a crystaliization of these supposed enomormous reserves to realise the value?!
I am no lawyer. But I am a pedant. And this 'sounds' very much to me that DGi9 is being sold as having the rights to Arquiva's cashflows. This is direct from the June 2023 update, and I have asked the chair for clarification on this: "Accrued interest must be repaid in full before distributions can be made to the Group. After the fourth anniversary of the VLN, the Group can only receive distributions if the entirety of the VLN principal and any rolled up interest has been repaid in full. The Company expects Arqiva’s future cashflows to cover D9’s VLN interest payments.""
Just very frustrating looking a comparable metering businesses being taken private at x20 where (according to Oak bloke) Arquiva smart metering business has more market share etc - and it's value is trapped in this structure. I wonder if a build up and float could be on the cards, when the business is more established and the timing's right. One lives in hope etc.
To me this suggests these reserves are explicitly tied to equity, the issue is how they are realised into cash in any form - and into DGi9's share price. Conceivably, this requires an IPO if we cannot restructure the company from a largest shareholder but minority position and take distributions. Penny for any other Arquiva large shareholder's thoughts who might want an IPO to realise some cash...and when?!
Looking for some clarity on how the distributions work at Arquiva - if we can sell another asset to get access to the dividends, do we have a 'right' to them if we have a minority share? Does anyone have any idea what they could be, given the inflation swap payment for this year could be 75% less than last year and profitability was 200m+ last year (our share 100M). I understand the asset is private and somewhat 'murky', but it seems insane to be valuing an asset at ~5x profit or 10x cash divis at div cover =2. Quite frankly id be keen to keep it, develop it and float it, not sell it for a song for some PE company to do...Very keen to hear your tuppence!