George Frangeskides, Chairman at ALBA, explains why the Pilbara Lithium option ‘was too good to miss’. Watch the video here.
Completely agree. I bought my first batch yesterday at 74p and will continue to add from time to time. The last issued NAV for DORE was 118p and even assuming it has come down since then, that is still a big margin of safety at these prices. Other than the yield curve moving down, you have to believe that with these discounts to NAV (throughout the Investment Trust Sector), the smart money will attempt to take these Trusts private and capture some of that discount or there will be consolidation within the sector. DORE being one of the small players ought to be a target.
Nothing from the latest RNS or the delay in receiving the ‘monthly’ loan repayment instalment from Lekoil has altered my view. As of today, $29.9m of net receivable ($43.5m gross and $29.9m after taking into account the SAVI loan balance of $13.6m, payment of which is conditional on actually receiving money from Lekoil) and $3m of cash gives a nominal NAV of $32.9m. Take off that number the costs of running Fenikso (which ought to be small) for the period before either the remaining loan balance has been fully received or a corporate event of some kind, all means to me that there is value available in excess of the price which you can buy these shares in the market. However, things are not guaranteed so caveat emptor and we will find out in due course. The end of your accounts will be helpful when they come out in the next month or so and if/when the Board presents its revised strategy of how it intends getting value back to us shareholders.
The price at which individuals are prepared to acquire this share continues to go up. However, in order to manage people’s expectations, the Nigerian economy and currency are really struggling and dollar generating businesses operating within Nigeria are probably economic targets for a government seeking dollars to help mitigate the ongoing Naira depreciation. The risk of seeing a multiple of your money from this point forward is centred around Lekoil’s ability and willingness to lift oil, get it to the refinery, get paid for it and for a percentage of those proceeds to get into Fenikso’s bank account. Whilst I remain bullish that this will end up at a 3.5 - 4.5p moneitisation event at some stage in the next year or two, there remains real risk for Fenikso that can’t be easily mitigated and where Fenikso is completely dependant on others. This is not a one-way bet and certainly not for widows and orphans!.
I don’t read too much into the irregular trades; just people who got bored or institutions cleaning house. I can’t believe there is much free float left for the market-maker / broker to buy up. I’m personally just looking forward to see what the Board has to say (maybe Q2 2024?) about how the monetisation of the receivable will be achieved and the plan to get the value (my view >GBP25m, note will need to be discounted back for time value of money and risk of non-receipt) back to long suffering shareholders of this stock. I still think it is 3.5-4.5x from here so will continue to hold my 2.5m shares to see but it is risky so not going to accumulate more. But DYOR and formulate your own view.
Per the 22/12/23 RNS, a further significant amount collected on the LOGI receivable. These payments are being received by FEN with increased regularity. The net assets by my calculation remain at the GBP25m level with $2m of that in cash on the FEN balance sheet, a reasonably low level of SGA (hopefully) and no other liabilities other than the SAIL loan (payments on that are contingent on FEN receiving payments from LOGI itself).
Perhaps the Board will manage to waste that ever increasing cash pile and/or the payments from LOGI may dry up - no guarantees. I anticipate the Board saying something about their plans in Q2 2024. Up until then, I too am sitting tight with my fingers crossed.
A few chunky trades going through on Aquis which I can only presume are individuals or institutions that have to sell, have just got fatigued, have no faith in the current Board and/or no confidence in LOGI continuing to be able or willing to continue to make instalment payments. We shall see.
Today’s RNS, is further validation of the hold and wait strategy and I am awaiting with anticipation for further news on what the Board will do next year to monetise the net receivable. With GBP37m of cash and receivable on the balance sheet less about GBP12m owed to SEIL, a net circa GBP25m of net assets. I’m hoping for a some form of corporate event so that we don’t have to wait 4-6 years to collect in the rest of the receivable. As always, DYOR and respect the cash collection risk this entity is exposed to.
Prep today’s RNS, further progress towards the monetisation of the LOGI loan and corresponding settlement of the SAVI liability. In theory, the Board should be coming forward in the next 3-6 months with a plan of how they intend returning excess cash to shareholders. For a company with net positive assets in excess of $30m and a reasonable track record of converting those assets into cash every 6-8 week s or so, I think there is a reasonable prospect of shareholders seeing some cash back next year or alternatively, some form of corporate action. DYOR
On the basis of today’s RNS, $47.8m owed to FNK by LOGI and $[15.4]m owed to SAVI by FNK (note - most of the payment of the SAVI liability is conditional upon receipt of funds by FNK from LOGI so a matching asset/liability - a net $32.4m owed to FNK. Costs of running FNK should be less than $[0.5]m per year. Time to collect from LOGI say 5-10 years. Apply a discount rate for the time value of money it will take to monetise that $32.4m net asset less annual operating costs and then take a view on the difference between the price you can buy these shares on the market now [market cap $5m] versus their inherent discounted value. DYOR and caveat emptor.
LEK changed its name to Fenikso and ticker code code to FEN when the settlement with Lekoil Nigeria was agreed Jan 2023. Fenikso ended up with 1 single asset - a $52m or so loan to Lekoil Nigeria who have been repaying that loan since then every 4-6 weeks out of proceeds they receive from Shell on their oil lifting. There is limited Fenikso shares being traded on the Aquis stock exchange. I am anticipating some form of corporate action and a monetisation event next year but all dependant on the oil lifting continuing and minimal shut-ins in the Delta (but please DYOR and make your own call).
Further evidence today on delivery of the revised plan by the current board / management with confirmation of the share cancellation. Hopefully, we will be seeing an announcement of cash back to Fenikso shareholders or a Fenikso share buy back programme in the coming months. Whilst there continues to be not insignificant risk around cash coming our way out of the LOGI oil lifting going forward, I see no point selling now unless you have to but please DYOR.
My understanding is that the 108m shares (previously owned by Lekoil Nigeria, Associates and Affiliates) are in the process of being cancelled.
With a remaining loan balance to be received of $48.5m less say $16m owed to Savannah, taking into account future costs to run Fenikso, and assuming 500m shares in issue (post cancellation) maybe a market cap of $30m or 6 US Cents per share versus a current price being traded of circa 1 US cent. All predicated on cash flow from LOGI continuing to flow our way. Maybe worth a further punt now? Views?
So outstanding creditors now paid, a good milestone, and a start made on paying down the Savannah loan of $16.2m. I think that Savannah get the first $1.5m and then a significant majority of the the subsequent LOGI payments are cash to Fenikso’s long suffering shareholders! It will either be a share buyback or dividends.
Yes - had not taken that into account. So let’s say, using round / broad numbers, in nominal terms, based on a net recovery from LOGI of $50m less SAVI’s $16m less $[4]m costs of running and then liquidating Fenikso over the likely [4-5] year time scale it might take to recover the remaining $50m from LOGI and assuming that it does actually get recovered and paid over to Fenikso) that gives a net nominal recovery of $30. In Sterling say, GBP24m divided by 600m shares in issue gives a nominal value of 4p per share versus 0.75p that some people (albeit very thin trading) are trading at. Would you concur with that analysis? Obviously, as the Chairman’s statement says, all prededicated on LOGI being able and then willing to send on the proceeds received from Shell Western
Anyone got any views on current value at the current market cap of GBP286m or so. The share price has taken a bit of hammering since the collapse of the Tullow and New Med deals, the ejecting of the old board and the shareholder special dividend now completed. Wondering whether or not to reinvest my dividend just received back into these shares at GBP194 per share? Any insights on a sum-of-the-parts valuation?
I will be more comfortable seeing an updated Fenikso balance sheet but on the face of it subject to the nuances of Nigerian commercial life impacting our future receipts of cash, hoping for a significant upward movement here. I can’t understand who would be selling out at this stage given the upside but I suppose some people just have to sell or lose interest. We shall see in due course.
Another $614k received bringing the creditors down to $1.1m - at this rate they will be cleared by August 2023. The amounts owed by LOGI will, by then, in theory, be $48m. Fenikso has a current market cap of $5m. Am I missing something here or do people, perhaps rightly or wrongly, don’t believe that LOGI will, or will be able to, continue to settle their debt?
3 million shares traded today which is unusual. Could be someone / one party buying in. I repeat my (personal) opinion that at a current market cap of less than $5m and a receivable owing to Fenikso of circa $50m and the recent (albeit limited) track record of payments against that receivable having been paid by Lekoil Nigeria, there is scope for this share to be marked up and at some stage, I expect someone to make an offer to buy the receivable (at a discount to par). But heavily caveated with DYOR.
Yes saw that. So net of the remaining unpaid creditors $1.75m, Fenikso should be worth $49m or so based on the face value of the loan, discounted back into today’s money but say north of $[30-35]m and currently trading with a market cap of $5m or so albeit on minimal trades. All obviously assuming that Lekoil are able and do actually keep selling and exporting out oil - A biggish assumption but probably not a bad punt now and I for one will be holding to find out..