Member Info for extrader

Hi allthatguff,

Maybe this is helping sentiment ?

https://www.reuters.com/article/column-russell-ironore-china/rpt-column-dont-mention-iron-ore-china-and-australia-dance-around-the-big-issue-russell-idUSL1N2IH0AT

ATB

Hi all,

The recent collapse of Arcadia Group before 1st Dec is likely to have been triggered by this change in regulations - 'crown preference ' - which now ranks sums owing to HMRC ahead of certain other creditors.

https://www.goodwinlaw.com/publications/2020/11/11_26-the-return-of-crown-preference

"...HMRC is often the largest unsecured creditor in a company’s insolvency. The return of Crown Preference will reduce the likely recovery for creditors with floating charge security and unsecured creditors. Additionally, in response, secured lenders will approach floating charge assets for the purpose of providing finance to UK businesses with increased caution. This will limit the sums which lenders are prepared to lend and thereby reduce liquidity in the market. Also, borrower covenants are likely to be introduced or tightened in order to monitor and regulate the borrower’s compliance with its tax payment obligations. Lending which is secured against floating charge assets is regularly utilised in a restructure or in connection with a business rescue. The return of Crown Preference is likely to reduce the financing options available to distressed companies.
This comes at a time when businesses will have built up significant arrears with HMRC as a result of the COVID-19 pandemic and, also, as Brexit looms...."

IF SYME can get its Inventory Monetisation signed off.....AND is careful about its choice of customers (ie basically sound, temporarily inconvenienced), this regulatory change will encourage take-up in the UK (at least) ...and in any other jurisdictions where local tax revenue - or lack thereof - is a concern.

ATB

...and coming back to Zanaga, what a great opportunity for GLEN to ease its 'pivot' from coal...and Ivan an opportunity to 'greenwash' the current DoJ difficulties...

ATB

Hi Longlad,

Thirty years ago I was involved in arranging a syndicated loan for an aluminium smelter in the Arabian Gulf. One of the interesting add-ons was to retrofit some of the existing kit to reduce environmental pollution, which seemed almost quaint at the time...'the idea that someone would pay a premium for 'cleaner' aluminium, really !"

Of course, they were using cheap gas to generate electricity, which kind of undermined the argument, given Canadian/Norwegian hydro, Icelandic geothermal and - dare I say it ? - even French and Russian nuclear... but their intentions were good !

ATB

Hi Longlad,

Great article !
And if Zanaga can use hydro (local) for extraction purposes and DRC (coastal) for smelting purposes, we'd have double-green premium ore for sale....

Tks again
ATB

Hi Trader_3,

Not a subscriber, unfortunately, for us outsiders could you precis, pls ?
No need for a thousand words......;->

TIA and ATB

Hi Sam12345,

.."news is due in the coming days and AZ's option is coming very soon :.."

People are hanging their hats on THAT 'call option' as a sure sign of things to come.

What the 'call option' actually says is .."Supply@Me has been notified by shareholder, Orchestra Group, that it has acquired an option giving it the right to RECEIVE [my caps] 630,000,000 ordinary shares of the Company if the share price is at or above 0.6945 pence per share on 31 December 2020. The option cost is £1.1million..."

It's a bet, not a 'call option' in the usual sense of the term, IMO. There's no evidence AZ would have to pay anything extra to 'receive' these shares, which if past practice is a guide, would be by 'direct transfer to custody account'.

The s/p on 24 Sept was around 0.51p.

If the SYME horse crosses the 31/12 tape below 0.6945, AZ forfeits his £1.1m stake, if above, he's paid out winnings of 630m shares.

For which he'd have paid £ 1.1m/630m = 0.1746p a share.

The shares themselves are nil cost Consideration Shares, the clue is in the reference price 0.6945p, see p 10 of the Prospectus.

.."The issue price of the Consideration Shares will be £0.006945p. "

Who knows ? Given that the Chairman 'unexpectedly' had to offload 295m shares 3 days later to meet 'unforeseen expenses', maybe this was an indirect way of AZ doing the same ?

To be clear, I'm not saying that is/was the case, but the RNS is silent on the reason behind the trade, leaving the reader free to speculate.

People should read what RNS's actually say....and what they don't.

HTH and ATB

Hi vonccf92,

Thanks for the snippet.

Brookfield says that .."The company is a global leader in hydroelectric power, which comprises approximately 64% of its portfolio. It is also an experienced owner, operator and investor of global wind, solar, distributed generation, and storage facilities..."
Given that and the 'renewables' bit, it's unlikely they do 'conventional'.

Unless Polenergia has an interest in OUR solar projects (Hanno's brother), which I haven't checked.

ATB

Hi calamari,

.."Can they just treat the SYME transaction as funding and ignore the sale for calculating all those numbers?.."

What ? Another set of accounts, to add to the three that the company probably already runs ? ;->

Can't speak to elsewhere, but in the M East that would be prima facie evidence that the whole 'true sale' was anything but...with unknown consequences.

True story : I worked for a UK leasing company in Saudi for a short spell. The company office was part of the boss's premises.
There was a theft and pretty easy to work out the culprit : he'd got in and - out of the 2,000 + files - stolen ONLY his own, to remove the paperwork, post-dated cheques and promissory notes, etc.
When chummy was found and brought to the judge, the judge asked the police as to adequacy of building security. They acknowledged the building was easy to break into.
The judge let the guy off with a warning, deeming the company 'complicit' for having made it easy and therefore put unreasonable temptation in the guy's way.
That was an interesting lesson...and maybe gave some read-across into the local attitude to women and dress code.

The second interesting lesson was the procedure for police investigation of the 'crime scene' : the local chief called my boss ahead of time, made an appointment to call in on his office/home ...where John kept his alcohol in a safe...and in passing cautioned him 'to make sure there was nothing for the police to find that might be embarrassing' .

Live and let live - a very pragmatic approach.

ATB

Hi caml,

Thanks for this.

When squirreling around to learn a bit more about the refinery builders Beijing Fortune Dingheng Investment, this came up. From the tone, I guess it's from the opposition....or a politician who wasn't taken care of...

https://www.facebook.com/BrazzaBreakingNews/posts/1643031365869984

ATB

Hi calamari,

Forgot to add, in terms of 'issues' that the duplicate 'true sale' , first to SYME SPC and - after re-purchase- to end -buyer, will play havoc with sales revenue figs ...reported profitability.....stock turnover days etc, plus other common credit KPI's.

ATB

Hi spotify,

.." I rest my case.."

I thought Trump set a pretty low bar, but you just limbo'd under it.
IMO
ATB

Hi calamari,

.."If it happens that the accountants decide that SYME funding is not really a sale, but actually a funding transaction in disguise, how much of a negative would that be? .."

Depends rather on how it's being 'sold' to the company, I'd have thought.

This isn't a consequence-free choice : there'll be an extra layer of tax issues (claims and refunds) and the need to 'square ' the current lender, who'll need to give up/waive the 'floating' part of any charge (or at least, specifically exclude inventory); and a prudent borrower might want then to pay down some of his bank debt with the extra liquidity he now has.

I'ts a bit of a broken record, but it would be really helpful if SYME could trot out an endorsement or two from amongst the pilots about how it worked for them in practice.

IMO
ATB

Hi Spotify,

.." A good statesman, like any other sensible human being, always learns more from his opponents than from his fervent supporters .."

Merry Xmas to you and yours
ATB

Hi Chalker,

It's not just 'collaborating'...it's M + S collaborating ! ..."agreeing an on-going collaboration with one of the Big Four[6] that is highly active in the development of International Financial Reporting Standards (IFRS) relating to the multi-jurisdictional themes of Inventory Monetisation..."

If the IFRS details apply, I think one of the big 4 (AZ worked for one, IIRC, and in the field of regulatory approvals) would have to 'sponsor' a question that addressed SYME's situation and walk it through the system.

Problem with that, I imagine, would be loss of SYME first mover / 'land grab' status in the interim : anybody interested would just follow the application and come up with their own structure/offering.

OTOH, in the big corporates, there's usually lots of people gunning for the top man's job, so it would be a brave CEO/CFO who'd try out an untested system on the simple say-so of a marketing man and his contact at your auditors.

It's a bit dated now, but remember the slogan : 'No one got fired for choosing IBM.."

It's a difficult circle to square, IMO.

ATB

Hi JustAHobby,

"..... for amusement and education check out "The Big Short"... and enjoy the Jenga clip..."

Great movie, with some interesting parallels.

If you've been following this for some time, you may remember that at one point there was discussion of getting a credit rating agency (or two) involved , so each package of securitised paper could get rated and then 'sliced and diced' according to potential funder risk/reward appetite....

ATB

Hi Wolf of Warks,

This seems to be how IFRS updates/interpretations are usually addressed, in order to gain proper recognition and widespread take-up :

https://www.ifrs.org/investor-centre/investor-update-hub/september-2020/

There's actually a current example of a query re interpretation of supply chain financing treatment - reverse factoring , unfortunately - if you drill down to the 'project page' there's an informative timeline of the various stages : background; published documents; supporting material; consultation feedback; etc.

Plus a project timeline.

I can see why AZ / SYME want 'first mover advantage', but most heavyweight CFO's/CEO's of mid-size corporates are surely going to want some official backing for a 'new interpretation', no ?

If there are any accountants or others with relevant experience, maybe they could comment from experience.

HTH and ATB

Hi apunter2,

Shoulda gone to specsavers, pal !

(1) I did in fact cover the 940m transfer to an interested II in my message, contrary to your claim.

(2) I note that you failed to address the concluding Q relating to the apparent failure of counterparts to honour the exercise by AZ of his call options on 7th July, viz :

..".."The transfer of a further 6.43% of SYME shares owned by TAG that will take the TAG holding [from 56.93%] to 50.5% as reported in the RNS earlier today [ 7th July ] are still to settle. ."

As at 8th Sept, TAG was still reporting a 56.93% holding , it would seem that several of the call options exercised and RNS'd 2 months earlier had not in fact been honoured at that date, and 6.43% of SYME shares (approx 2.1billion) were still in transit somewhere..."

From your silence , I take it that you don't have an answer.

That's OK, it happens.
ATB

Hi parm,

.."WHY would you have an 'issue' with any of this, you are not invested?.."

It's a mystery/soap opera / who-dunnit that's better than anything on the box...with the spice that the underlying concept is technically very interesting....and with a fair wind might just work.

Enjoy your weekend, I've got to play catch-up with the olive harvest.

ATB

Hi parm,

.."suggest you watch all of AZ interviews, he has said categorically he will not sell any of his shares!.."

From the 29/7 RNS : https://uk.advfn.com/stock-market/london/supply-me-capital-SYME/share-news/Supply-ME-Capital-PLC-Director-PDMR-Shareholding/82948847,

(1) He didn't actually sell ex 1AF2 , he just pledged 5.9billion SYME shares to 3 x lenders who were specifically (and unusually) allowed to 'trade pledged shares to diversify their portfolio concentration risks ('que ?') .." ie appears to have subcontracted the sale [ which most people appear now to agree have taken place] to third parties.

(2) Same RNS says " Mr Zamboni's 18.98% shareholding in SYME held through Orchestra Group remains unchanged..." But the 8 Sept RNS notifying 'direct transfer to security account' of 940m shares at a notional 0.6872p to an institutional investor shows a reduction in OG's holding via TAG to 18.02%, the 940m coming from a reduction in TAG's holding in SYME by 2.87% from 56.93% to 54.06%
Most people would consider that a disposal, if not necessarily a 'sale' as such. Remember, too, that this is after exercise of the 7/7 call options , under which AZ became 100% owner of TAG...

Or should have become 100% owner.

Because .."The transfer of a further 6.43% of SYME shares owned by TAG that will take the TAG holding [from 56.93%] to 50.5% as reported in the RNS earlier today [ 7th July ] are still to settle. ."

If, as at 8th Sept, TAG was still reporting a 56.93% holding , it would seem that several of the call options exercised and RNS'd 2 months earlier had not in fact been honoured at that date, and 6.43% of SYME shares (approx 2.1billion) were still in transit somewhere.

Which rather calls into question the reliance one can place on RNS's , as well.

IMO
ATB