Member Info for extrader

Hi Kyle17,

The £ 225m (in Prospectus 'intangible fixed asset' = value of IP) was written down post RTO with a change of accounting treatment, described as 'deemed costs of Placing'.
The RTO was of a Main Board, not AIM company, Abal, a cash shell (worth abt £ 2m net).
Chalker has said that the retained loss resulting from the £225m write-off is at consolidated accounts level and will (apparently) not impact 'solus' co ability to pay a dividend. However, SYME has said it doesn't intend one for the foreseeable.
None of this has anything to do with the Euro 300 M funding being ARRANGED/STRUCTURED by SYME, involving 30 or so Italian companies working with a special purpose company 'StockCo' set up by SYME to bring companies and funders together .

HTH and ATB

Hi alwayznow,

.."This is why AZ has said recently he is keen to get fundamentals out to the market and why I believe the annual report date was pushed back to Jan 21. SYME is currently making money and by the time that annual report is due, AZ is going to want the numbers to be as high as possible..."

To be clear, the Jan 21 report date will cover results to Sept 2020. From earlier comments, these are unlikely to show revenue of more than £ 2-3 million and there are likely to be a number of exceptional/one-off 'start-up' costs that mean negligible 'net' profit at that date.
Anything subsequent, including whatever is reported this month/November won't be notified in detail until the interim trading update to endMarch 2021.

ATB

Hi Beforegolf

Thanks for ‘reporting back’.
If golf is a ‘good walk spoiled‘, a high-end lunch without an investable tip must be a contender for similar frustration.
I’m in the ‘still undecided’ camp.

As a matter of interest, what would you do or say if your lunch companion had , even qualified, endorsed the concept / SYME ?

There’s a story that old man Wallenberg - Swedish magnate - never got involved in the recruitment process for CEOs in his empire : he invited them to lunch.
Anyone who added salt and pepper to his dish before tasting never made it further, Wallenberg wasn’t keen on people with pre-conceived notions.....

ATB

Hi beardozer,

It's not what we'd like that's relevant, but what the other side can be persuaded to pay.

If you accept G_G_G's view that the Chinese are probably the only game in town, you've got to look at things from THEIR perspective :
- Simandou is a card to play in a few years' time, to keep the Aussies quiet;
- Zanaga is a card to play to keep Simandou straight (OK, maybe one drunk using another for support, but you get the drift);
- both are still more expensive (transport costs) than Oz, but quality maybe better = less domestic pollution, therefore good for domestic politics;
- Congo Inc offers a number of pluses : small population, large area, lots of resources (eg phosphate), near-to but not DRC (hydro/Inga), 'pliable' host government, deepwater port covering S Atlantic, facing Brazil, etc etc.

What's Zanaga 'worth' to the (only ?) buyer ? The first rule of haggling, that usually surprises Westerners , is that you don't start by offering 50% of what something's worth, you offer 10% and wait and see what happens. You may even make as if to walk away.....
I think Mitch has covered this better than me.
GLEN is the unknown quantity, our boys have been on this for over a decade and I'm sure were hoping for a quick turn shortly post IPO.
None of us/them are getting any younger and the coronavirus is changing people's perspectives and priorities.
I for one no longer aspire to be the richest man in the cemetery, I'd like to be comfortable , but that's it ;->

I also don't think China will be interested in making any commitments anywhere (except maybe military action in view of Trump's latest) until the dust has settled post US election...;-<

ATB

ATB

Hi calamari,

.."Cows are not a good example. If there's an outbreak of foot and mouth disease and all the cows die, game over..."

(1) AIUI, one of the first pilots was with cattle, as it happens. Hence AZ's puns about the original' stock control'. You might think that's a load of bull...
(2) Insurance. The farmer might not think of it but you can bet anybody lending to him will. " Any fool can lend money, it takes a banker to (usually, knock on wood) get it back..."
A good UK example being ASC, which had a disastrous fire at its warehouse in the early days and lost practically all its inventory. In fact, IIRC, ended up ahead of the game as it had 'business interruption insurance'.
I had 100,000 shares (@ 5.2p) in ASC at the time, these lessons tend to stick...

Note to AZ : if you're thinking of offering insurance as an add-on (nice twist, btw), remember to re-insure...

ATB

Hi Longlad,

.."A cynic would say an ipo isa metric to let insiders cash out at an inflated price where everyone involved can have their slice of the pie, the brokers, the bankers etc..."

Most peeps forget that at the time of ZIOC's IPO, the Directors offered up an equivalent number of shares as were placed, so (a) there was a 'read-across' benchmark for the balance of their holdings and (b) they probably got most of their 'promoter/developer' costs back.
Which is why - I think - any linkage/reference to IPO price of £ 1.56 is false 'anchoring' : the key shareholders don't need to see this (or anything like it) to be 'quids in', the only relevance is any vague sense there might be of 'wanting to do the right thing' by those initial public shareholders and let them get their capital (at least) back...
Zanaga had already been substantially written down by Xstrata by the time GLEN swooped, so GLEN won't have any anchoring either. Just greed.....which might be a help or an obstacle to doing a deal....

ATB

Hi thistinhat,

To reduce confusion , stick with RR cars (owned by BMW), which is separate from RR (jets, turbines, powerplants etc), a different company.

Think of the manufacturing process for cars as a railway line running from raw materials to parts to factory to showroom to end buyer. It costs money to use the track.
The train doesn't run continuously (that would be 'just in time), there's 'dead time' as the train stops and starts (that's where inventory 'builds up'). The meter (cost of working capital) is running continuously.
SYME's concept , grossly simplified, is to create a siding[= StockCo] , where- for a fee - trains can park ['sale']and the meter stops running until they rejoin the main line [re-purchase].

Coming to slomo's Q - as I think you and I both understand it - the client's original route to market/train destination hasn't changed : he'll pay StockCo to come out of the siding when the track ahead/next stage of the sale process is clear. He'll pay a variable fee [AIUI] depending on how long he's been parked in the siding.

On the contractual side [AIUI] the client is offering standard, readily saleable inventory that SYME's sub-contracted agent can confirm is 'merchantable', I'm pretty certain there'll be a 'First In, First Out' clause somewhere, to make sure that client can't just 'park' older, difficult-to-sell stuff. SYME/StockCo could simply say 'I'll take every third / random wagon-load", to make cheating difficult. Blockchain would make such granular control possible and easy.
I understand StockCo will only pay around 85% of parked inventory 'value', so client has an incentive to get it moving asap, to realise his profit on sale higher up the chain. SYME/Stockco will have a number of other protections agst client default/deviousness eg re-selling direct, insurance etc. and will/should have done a proper creditworthiness check up-front.
There's a trade-off between credit-worthiness and return that'll be reflected in the 'fee' for using the siding, the trick for SYME will be to optimise the 2.

Hope this is (a) correct (all IMO) and (b) helpful.

ATB

Hi apunter2,

.."But you need to understand for a funders point of view it’s 4% per transaction, not per year lol.."

Surely not? If client turned over stock every 90 days he'd effectively be paying 16% p.a. for the ability to monetise his inventory and pay down his normal working capital cost. At every 60 days , 24% p.a. , etc

IMO
ATB

Hi apunter2,

Good summary ! I've interleaved an intermediate step (in CAPS) :

.."Financial side clients are manufactures or any company with a stock
Funders buy the stock including vat, clients hold the stock ( inventory)

Tech each part making up the inventory is given a digital token (like a bar code say) and the platform can track these tokens
When the client [sells to a third party] BUYS BACK the inventory, the platform registers the [sell] PURCHASE and the cost of the funders ORIGINAL purchase is repaid plus the 4% fee ANNUALISED, FOR THE PERIOD BETWEEN SALE AND REPURCHASE, PLUS .vat
THE CLIENT THEN SELLS TO THE THIRD PARTY AS IT USED TO, AT WHATEVER MARK-UP/TERMS IT CAN GET>
Syme get upfront yearly fees from the client
The benefits for the client is that it is true sells. So not debt and they get cash
Funder benefit from the 4% .."

HTH and ATB

Hi apunter2/Weathergeek,

Thanks for the feedback !

All down to 1.36% bar Pictet and Belgrave are 'founder shareholders', and I see AZ's direct holding in AZ + Orchestra, but can't see how to get to TAG's holding. Maybe I'm double-counting somewhere ?

Enough for now, off to the dogs !

ATB

Hi apunter 2,

Give me a hint where I might find this 'new register', pls !

There's nothing I can see on SYME's own site, trawling through the RNS's we have :

- 25 Sept, DW's small sale, not to worry, he's still 'a committed investor' at 19.53%. Three days later, he's out. And they say a week is a long time in politics .....;->
- 24 Sept, AZ's call option, taking him/OG to 25.97%. He's described as 'owner', singular. Ditto in the 28 Aug Rns.
- 08 Sept, TAG decreases stake to 54.06% from 56.93 %, 940M to an interested II, AZ is described as 'sole director' of TAG.
-29 July, 1AF2 transfers down to 3x stocklenders , from 23.91% to 5.92%. AZ is 'a Director of 1AF2.

Then we get https://www.ilnordestquotidiano.it/2020/10/01/il-ceo-e-fondatore-alessandro-zamboni-torna-a-detenere-il-100-di-the-avantgarde-group/

Under this, AZ has acquired 100% of TAG, picking up the 2/3rds he didn't own, lastly DW/IWEP's, so his direct interest is OG (25.97%) + TAG (partial 33%x 54.06= 17.8%, now goes > 54.06%) + whatever he has in 1AF2.
His direct interest in SYME would appear to have gone from 43.77% to 80.03% (plus whatever he has of 1AF2's 5.92%) and the Chairman has zero skin in the game.

His now 100% in TAG has been acquired either by 1AF2, which should report an increase of 54.06% from 5.92% = 59.98%, which can be AZ + others, or by a new entity A1F2, which should appear in an RNS as a new PDMR (AZ) -controlled entity.

Whichever way I try to parse it, that's how I read the RNS's : AZ should report a major increase in holding(s); and DW should report his sell-out.

Do the numbers I've shown above tie in at all with whatever you've seen on your screen shot ?

ATB

Hi IraMil7,

.."Is 20% not a case for TR1?.."

Anything involving PMDR's is reportable.
Here you've got the Chairman apparently selling out 20% of the Co to the CEO, to an investment vehicle A1F2 that might or might not be the same investment vehicle 1AF2 that AZ has previously used to move shareholdings around and - I think apunter2 has argued , I'm open to correction - has been used to 'on-board' new II's (who can't yet be identified , because of formalities/NDA's etc).
A lot of this is speculation on my part, I freely admit.
Another bit of speculation on my part - the most charitable explanation for delay in RNS'ing these material events that occurs to me - is that the lawyers screwed up and released info early and AZ/DW and co are currently in a huddle with their lawyers working out how to present this to the market.

Well, it is Friday afternoon...and you know what people usually start saying in the build-up to close of business !
ATB

Hi WFH-,

This is what I said yesterday afternoon :
.."Pending the RNS, as a 'wild-assed guess', I'd say (I get the impression that DW has been working with AZ in Italy for a few years) , it looks as though the TAG 'consortium' formed to help get SYME srl a London main market listing has served its purpose and is now being unwound.
It'll be interesting to see what, if anything , the RNS says about DW's position."

I've added the apparent mistake? / deliberate confusion ? / new uncertainty of 1AF2/A1F2 because all 3 interpretations (and , for all I know, there may be more) point in different directions.

ATB

Hi Firststopthemoon,

If funding comes by way of a private placing amongst the existing major shareholders, then I agree it's no odds to them.
A bit tough if you're significant but don't 'make the cut' for whatever reason; and 'doubly tough' if any part of the placing is done with outsiders.

Che sara sara.
ATB

Hi all,

People are (t)wittering on about s/p, trades, MMs, other shares, etc.

The 'elephant in the room' (yet more livestock to the menagerie) is YESTERDAY'S early afternoon news that appeared to suggest that approx 20% of SYME changed hands and the Chairman has effectively sold out.

Various sources/newspapers/lawfirms report a deal between IWEP (ie Chairman) and TAG, whereby AZ has finalised the acquisition of a 100% interest in TAG.
These sources say this was done with AZ's vehicle "A1F2", a description repeated several times.
Do peeps think this is the same vehicle that has appeared in previous RNS's , always hitherto styled " 1AF2" ?

More to the point, whilst AZ's apparent decision to be more sparing in his public remarks is probably a Good Thing, silence on the uncertainties surrounding these reported material developments is going beyond Delphic to positively Sphinx-like.

This is surely Governance 101 that the Chairman should be addressing....oh, wait ......and the first RNS SYME issues.

ATB

Hi G_G_G,

" I feel/share your pain ;-< !"

I'd take it as a very poor signal to the market if the principal shareholder/lenders didn't step up to the plate at this stage of the game....a bit like someone nearing the tape at a marathon and suddenly resorting to 'mechanical assist'....

Apart from anything else, they'd be diluting themselves significantly/reducing 'imminent' upside, no?

ATB

ATB

Hi apunter2,

I gather you have a better handle on UK corporate dealings than most, 2 x quickies :
- are the thresholds quoted here https://murrellassociates.co.uk/news/five-ten-fifteen-twenty-five-key-voting-thresholds-uk-limited-companies/ applicable to SYME or are these for other types of company ?
- what is your understanding of SYME's free float' after the recent transfers in/out/around? I've heard anywhere from 10% to 40% bandied about. Would imagine it's nearer the former.

If near/under 10% , things might get v exciting.

ATB

Hi justthefactsmam,

I'd defer to apunter2 or Savvy 6, who (a) follow more closely and/or (b) have developed some kind of dialogue/rapport with AZ.
Pending the RNS, as a 'wild-assed guess', I'd say (I get the impression that DW has been working with AZ in Italy for a few years) , it looks as though the TAG 'consortium' formed to help get SYME srl a London main market listing has served its purpose and is now being unwound.
It'll be interesting to see what, if anything , the RNS says about DW's position.

HTH and ATB

Hi apunter2,

Continuing the banter ..."An offer everyone else couldn’t refuse !!..."

'Some people might say that, I couldn't possibly comment'.

Il Nordest Quotidiano is obviously Italy's answer to the Grauniad for its typos. " A1F2 Ltd, puhleaase".

As a matter of interest, where do you think 1AF2 is nestled , amongst these of AZ's companyies/directorships ?
The AvantGarde Group S.p.A.
Darwinsurance S.r.l.
RegTech Open Project S.r.l.
AZ Company S.r.l.
AvantGarde 4.0 S.r.l.
Orchestra Group
Future of Fintech S.r.l.
Supply@ME S.r.l. ?

ATB

Hi ironically-named SugarHORSE 789,

.."Yes Punter i do not believe AZ has this kind of money on his own..."

Maybe somebody made him an offer he couldn't refuse ?

I'll get my coat...
ATB