Member Info for extrader

Hi Hawaiifive0,

.."The market makers could take the price to wherever they find retail buyers/volume.."

I look on the Shard subscription agreement as being supplementary/complementary to the 'normal' ebb and flow of market-makers, that's the point , surely ?
AIUI, they're incentivised to 'flush out' potential buyers who for whatever reason haven't bought so far. They do so on an arm's length basis and may (perish the thought) be a bit more 'promotional' than ZIOC can /wants to be.
Many of us walk around a shop, check out whatever we're interested in, badger the shop assistant for extra info....and then go home and buy on-line....
I'm not clear how (to pursue the analogy), Shard / ZIOC can stop that : I might be persuaded to buy by Shard's marketing, what's to stop me just buying in the market (rather than 'subscribing') , which doesn't give ZIOC any funds ?
Which brings me back to : the Shard structure only makes sense if it's intended to tap a discrete investor pool.

AFAICS, the only 'hard info' we'll have re progress (the first Tranche having already been issued) is when we're RNS'd of a 7M increase in 'shares in issue' , being the Second Tranche.
Proceeds of Subscriptions are to be paid to the Company on a weekly 'sweep' basis, it would be useful to be updated on how things are going.

Trahar mentioned in passing that 7M over 90 days was about 75,000 per week, which struck me as an interesting way of looking at things : perhaps there's a 'tame' subscriber or subscribers lined up, to provide funds only as-and-when needed. A

Glass half full/ glass half empty ?

ATB

Hi all,

From today's Africa Intelligence :

.."Sassou cosies up ever closer to Kagame

On frosty terms with Ali Bongo and going through a rocky patch with Félix Tshisekedi, the Congolese president Denis Sassou Nguesso has been tightening his ties with his Rwandan opposite number Paul Kagame. …"

So : scratch any prospect of co-operation with Gabon as an export route for Zanaga .....and downplay prospects of improved trade with DRC (power from Inga and improved transport links Kinshasa/Brazzaville)....

News due shortly on IMF review of its facility (July 7th)

ATB

Hi Longlad,

"Can anyone name an African Focused junior that has succeeded?"

CEY (Centamin), in Egypt, for one.

ATB

Hi Dr Remington,

"Did he sound upbeat at all or were there any tears?"
I think it's a job requirement to be positive in outlook, the frustrations must be enormous...and the 'payback' in professional or personal terms tantalisingly elusive...

Let's see what the RNS says...

ATB

Hi all,

Andrew has just called back.
I was told that an RNS will be out later today, delay due to some last-minute re-wording/reviewing needed to take account of Friday's RNS.
The Shard agreement should give funds sufficient to 'June or even year-end 2021'.
Re COIDIC, he said there has been progress but the RNS will be guarded in its comments because of the sensitivities.

ATB

Hi Sootysnipes,

Good point ! and you'd think that ZIOC would want to release on time, esp as they've just engaged Shard to entice some fresh money....and potential subscribers will want audited figs and an update as to what's happened since 31/12...

ATB

Hi Sooty,

Called and left msge.

Hi jonnychi,

.." I thought it was a regulatory requirement that had to update b4 30 jun,? "

AIM Rule 19 . I've left a message with Trahar asking for clarification.

ATB

Hi caml,

LSE doesn't show all RNS's.
The last 3 annual results have been RNS'd on 27/6/19, 29/6/18 and 29/6/17.
The RNS you refer to relates to the 'mailing out/availability on website' of the Annual Report and notice of AGM.

ATB

Hi G_G_G,

.."Do you think the bod would care if intermediaries are snapping up the shares..."

I think the BoD /management are, to coin a phrase ' gagging for it' ;-> but obviously will want any offer to be 'compelling'.

…" this could be allowing some dodgy Congolese officials onto the share register. .."
Quite. And let's not restrict 'dodginess' to the Congolese....That's the 'beauty' of tax havens....

ATB

HI G_G_G,

.." Question, what's to stop a Chinese entity snapping these up on the cheap? They would stay juts below the 3% threshold if split across two accounts and own close to 6% of the company. That's a 6% discount from any t/o offer..."

Or even take up all 3 tranches via three 'intermediaries' and end up with 6.84%...? Throw in Keith Everitt's 6 + % and Julian Higgin's 4+ % (IIRC) and the sums/influence could be material...
Thing is, you can bet Shard/BoD will be watching for subscriber identities like hawks....and I'm sure the process would be stopped if the BoD didn't like the way things were going.

Concert parties must be easier to arrange nowadays, thanks to modern communications and opaque ways of potentially doing business.

I remember when Lloyds Bank made an ultimately abortive bid (insufficient acceptances) for Standard Chartered - their M East officers had to field lots of calls from outraged sheikhs, who wanted to know why they hadn't been let in on the secret, because they'd have been happy to buy and 'park' shares for Sir Jeremy. They wouldn't even have asked for finance for the purchase. Mind you, Barclays seems to have managed it with the Qataris. ALLEGEDLY.

ATB

P.S,

It'll be interesting to see how long it takes to place the first tranche; at what price (s); and the amounts in each weekly 'sweep'.

ATB

Hi all,

The funding arrangement with SMC seems quite sensible :

- it addresses the co's funding requirement in a way that covers a number of bases : the timing (deal effective 25/6) should mean ZIOC avoids the possibility of any 'going concern' qualification; it sends a message to anyco hoping to 'wait us out' ; its phased nature minimizes shareholder dilution; by engaging SMC, ZIOC doesn't have to 'play favourites' amongst the 'inner circle ' or provide any commercially sensitive info not already in public domain to new investors - and a look at the parent website https://www.shardcapital.com, esp scroll down 'team', suggests they have access to HNWI's, family offices and other potentially interested parties; SMC's 5% rake-off seems OK, esp if you look at it in £ terms ( £ 21K @ 6p of gross £ 420K) , rising if they can place higher.

If there IS any COIDIC 'meat' in the upcoming RNS , the BoD /'connected parties/PMDRs would presumably have been unable to get involved in any of the more conventional financing alternatives (shareholder loans, etc) : this arm's length arrangement solves that issue - if it is an issue - whilst potentially flushing out some new money.
The tranches are each under the 3% disclosable level (2.38% sliding to 2.28% on full utilisation), with clawback rights to avoid unnecessary dilution if newsflow is positive.

Tie this in with the employee retention incentive and salaries in kind (shares, not specie) and you might get mildly positive about this development.

This may just be my confirmation bias talking, so DYOR, NAI etc etc

ATB

Hi G_G_G et al,

I'm with you that this trading update needs some meat on it. Perhaps that's why they've got the funding issue out of the way beforehand ?

.."The issue with this [ the project] is it could lead to the Chinese turning around and asking for their billions in loans back..."

Fair point, but AFAIAA, they haven't forgiven/written anything off, so far, only extended maturity profiles....and in the banking world it's not unknown for lenders to put up more funds if this improves their chances of overall recovery. Which control of a future income stream from a variety of sources would provide....

The phased, private placement via Shard Merchant Capital is interesting, I've been tied up on other things today but will have a look over the weekend.

ATB

Hi Longlad,

Thanks for this.
One of our erstwhile twitter posters 'bigged' the Kenyan rail project up a couple of years back, as the first step in a mooted rail link (Chinese supplied) between Mombasa and PN.
AIUI, there have been significant cost over-runs, a lack of commercial viability so far ...and domestic concern at the level of debt incurred, see https://www.voanews.com/africa/cost-china-built-railway-haunts-Kenya for one (okay, biased) view...

ATB

Hi G_G_G,

Agree your concluding point re this being an updated African version of 'the great game' and your observation that

.."But perhaps more importantly they'll have yet another port, probably with a 100 year lease, to further extend their influence over west Africa. The other infrastructure projects unlock the riches of ROC and will extend beyond these borders. .."
At the last AGM, Elphick made the point about PN/Pointe Indienne had 200m water, I think it was, a short distance offshore, contrasting with the 'ongoing dredging requirement ' he foresaw for Simandou's port, wherever located, because of the way the continental shelf there doesn't shelve.
You don't need 200m depth for an iron ore carrier.....

A rail link inland going past Zanaga to Franceville and beyond would unlock the Central African Republic, which is of interest to Russia (location and resources) as counterweight to the Chinese, see https://wgi.world/what-the-central-african-republics-military-deal-with-russia-means-for-the-country-and-africa/

'Great Game' mark 2 indeed !
And where does Zanaga fit in ? https://tenor.com/view/mongo-blazing-saddles-pawn-game-of-life-chess-gif-12812888

ATB

Hi G_G_G,

.."they [FMGL] went up against China for Simandou knowing the chequered history of that project..."

I think it quite likely (given my belief that they won't want to irritate the Chinese and lack international experience) that FMGL was acting as a straw man, to create the appearance of 'competition'...the ? $ 5 Bn difference in bids kind of suggests they hadn't sharpened their pencils particularly...;->
This may of course just be confirmation bias on my part.

Re NCCL, I commented briefly on AFC's possibly subdued role going forward (commitments elsewhere), the regulars esp.CF 73 and badeli seem to have covered most points.
Re your own somewhat 'dyspeptic ' observations re country risk, if you look at track records, Argentina is the worst serial defaulter of the 20th century....and Spain the worst of all time.....

Mind you, I had a colleague (ex Grindlays), who'd worked with the Lebanese in Nigeria, the Sindhis in HongKong and the Kuwaitis in the Gulf, before being posted pre-retirement to the motherland, his then bank's Small Business branch in Aylesbury (I had to look it up on a map). He later said somewhat bemusedly that, for sheer duplicity and inventiveness, he'd never seen anything to match the English small business owner....

;-<

ATB

Hi G_G_G,

…" China wouldn't be able to develop the planned infrastructure without our mine - it just wouldn't be economical. .."

(1) We were 1 of 5 companies asked to sign Letters of Interest confirming our wish to use the SEZ PN Port a while back, I believe to demonstrate commerciality to China EximBank.
Apart from Zanaga and Sapro Mayoko, I believe the others included Kore Potash (which strictly speaking doesn't need a deep water port , AIUI) and possibly the TopsoeHaldor promoted fertiliser plant...+ maybe a manganese exporter.
So, whilst important to the economics, I don't think Zanaga's presence is essential.

(2) And of course (a) it being commercially viable may not be top of China's priorities, in fact they may not want to show Nguesso a 'profit' inside C-B; and (b) no doubt, there's scope to play games through transfer pricing.

As to FMGL, I half get the sense that 'international' is anywhere outside WA ;->. The only exposure/experience they appear to have outside Oz is in South America, which OK can be challenging enough, but doesn't IMO prepare one for Africa ;-<

They'd be extremely unlikely, I feel, to be lead player in a greenfield project in an unfamiliar country where not only the natives ain't friendly but their best friends wouldn't be either....and their best friends would , rather unhelpfully, be FMGL's target/key customer.....

The UK fought a useful rearguard action with China over HongKong, playing a weak hand relatively well, but this was 35 years ago, when China was in a different place.
I think our current best chance with ZIOC is if their agreement with COIDIC can be manoeuvred into something halfway decent for Zanaga, with GLEN providing some value-added on the relationship/trading/debt - for- equity side of things.

ATB

Hi again,

NSF will also need to 'tweak' its credit-scoring systems, to take account of the changed circumstances of prospective borrowers : no one's sure yet how furlough ending and covid support phasing out will work in practice. If it's anything like Universal Credit, it won't be 'customer-friendly' or well thought out, NSF and other lenders will need to make 'real time changes' to their credit processes as they see how it all plays out.

ATB

Hi mbingo,

Everyone focusses on cash - understandably - but all NSF has been doing is running down its book. A prudent choice, but basically a 'harvest' policy....which is finite.

At some point, they'll want to go cashflow negative...because they're expanding the business.

ATB