Member Info for fbrj

I think people are over complicating the spin out mechanism and why/how it is beneficial to us KAV (POW) shareholders.

Stage 1 - POW and KAV assets put into vehicle (Kanye). This may have been completed already or, as KeithOz alluded to, there may be other assets to go in. As part of the IPO/spin out preparations the management structure etc will be set up, plus a shareholders agreement between KAV/POW (probably mainly about management, selling out etc etc) and setting up the operational structures/organisation etc. Let us assume the vehicle is owned 50/50 pre IPO.

Stage 2 - IPO/spin out. This could be achieved by:
1. Offer/place NEW shares in Kanye to the public for cash. All proceeds go into Kanye; "public" might include existing KAV/POW shareholders with some pro rata preferential allocation (but an added complication). KAV/POW will get diluted down to say 35-40% each in the enlarged vehicle. This would depend on the value ascribed to Kanye and the amount of cash required. AIM does not require a minimum to be held by the public. Main listing: minimum of 25% and more onerous re track record etc etc - so v unlikely!

2. KAV/POW sell down existing shares in Kanye to public (maybe to existing shareholders too?). The big difference here, compared to (1) above is that the cash proceeds go into KAV and POW (as they are the selling shareholders) and NO cash goes into Kanye. That is quite a hard sell, because how do you explain how Kanye is funded without recourse to KAV/POW.

3. A combination of 1 and 2 above. This might be the case if KAV/POW need some cash for other projects.

So, what is the benefit to KAV/POW of this exercise?
First, they have a vehicle for future cash raising for Kanye which could be partly/wholly funded by outside parties. KAV /POW could participate or not depending on whether they wished to maintain their % holdings in Kanye.
Secondly, Kanye will have a market value because it will have a share price. This will fluctuate over time. Right now none of us know what KAV's 50% in Kanye is actually worth. It is "lost" somewhere in the overall market cap.
Let's say, by way of example, the IPO/spinout is by way of method 1 above and KAV/POW get diluted down to 40% each. Just prior to the new shares being issued Kanye is worth X and post listing X + Y (where Y is the new cash raised). So, the 40% might be worth more than the original 50% (depending on IPO valuation).

When the terms /structure are announced it might be apparent there is a value gap in KAV, because the value of Kanye has not been taken properly into account. To take an extreme example, to make the point, suppose the market cap of KAV is £20m but the issue terms demonstrate the 40% of Kanye held by KAV is also worth £20m (ie all other assets are in for zero) - what would you do? That is one reason why a spin out can benefit existing KAV holders - a market value can be attributed to a chunk of assets (Kanye) and indirectly

Not forgetting that BT was granted options just 6 months ago. The Remuneration Committee has certainly been busy - third meeting this year!!

Hard to believe they were not in possession of inside info....why sneak this out 4.45pm?

We'll all just brush this aside on the basis that we benefit too. But really.....

Conduity Capital PLC Proposed reverse takeover of Smarttech247

Smarttech247 valued at £33.5m
hTTps://uk.advfn.com/stock-market/london/conduity-capital-CCAP/share-news/Conduity-Capital-PLC-Proposed-reverse-takeover-of/85747670

Slowly...good summary post if I may say so! I've been here 3yrs + so my average is higher yours at 3.5p but at least I have a decent sized holding. My only slight reservation is that the board tends to issue paper like confetti; I think the issued share cap is something like treble what it was when I first started here. There are a lot of options and warrants still floating around.

Provided the sp keeps motoring I guess we can live with that!

https://www.voxmXXkets.co.uk/articles/alan-green-on-ab-dynamics-echo-energy-kavango-resources-73f5b12/

XX=ar

Alan Green pretty busy on KAV. Also today on **********. Concluded with something like: KAV should be on the top of your list for an investment in the resource sector....

https://www.**********.co.uk/articles/alan-green-on-ab-dynamics-echo-energy-kavango-resources-73f5b12/

Thanks! I had listened to him on 16/06. Now just heard his 20/6 musings where he said...."some theorise that...."

FKC - an interesting comment. Could you tell us exactly who the "people" are who are saying KSZ could be even bigger than Norilsk? Presumably not some random on twxttr?

Ecwhke - care to expand/context?

I would be surprised if they announce a major piece of information just as the market closes. That to me would appear to be too contrived. Far more likely is a release either tomorrow or Wednesday morning; it would give everyone a chance to digest it and be more prepared to ask questions during the evening presentation - much more difficult if it is released a couple of hours before BT appears!

Ismalia - Per 2020 AR DW held 17.2m shares at 19 April 2021.

Yesterday's TR1 showed that holding is now 14.1m shares.

I must admit - seems a slightly odd time to be selling down just as things are progressing!

Ismalia - Per AR 2020 DW held 17.2m as at 19 April 2021.
Yesterday's TR1 showed his holding has dropped to 14.1m shares.

Ismalia. His holding has dropped 3.1m shares check out the TR1s

That's our ex chairman - just dumped 3.1m shares - probably having just having exercised warrants/CLN/shares originally issued as directors remuneration at 0.8p/share. For a net £92k, directors and managers were issued with 13.8m shares and 13.8m warrants. The warrants were issued at 1p exercise price but if exercised within 12 months (at 1p) would then be issued with a "B" warrant with a life of 3 years with an exercise price of 2.5p. So, for £92k the holders have shares now worth £621k and warrants in the money worth £138k - taking current sp of 4.5p. Not a bad return on the face of it. 8x return in 14 months. Just remember that when BT reminds everyone how low directors' remuneration is.

I'm very happy to be corrected by anyone else who is tracking KAV warrants and shares in issue. KAV does issue shares like confetti; at 31 Dec 2019 the shares in issue where 160m, 290m by 31 12 2020 and 360m today. In other words the number of shares in issue has more than doubled in 18 months.

We are where we are, as the saying goes and I think we are poised for potentially a very exciting few months ahead and, importantly, cashed up to progress with surveys and drilling (although seeking an equity partner for the latter). Please don't think I'm trying to bash KAV or anything. I've been a holder for nearly 3 years and I expect like most people have traded a bit in between; I now hold just over 3m shares and actually added 100k shares today

BCB - sounds as if you are well past your 1st glass!
Have always liked an enthusiastic half glass full man/woman!
I've finished the last bit of fine tuning to my holding today...now circa 3m.

I agree with a comment earlier - it is quite difficult to accumulate in size when others are buying. There are only 4MMs in this stock. Best to accumulate when there is a lull. The downside obviously is that if there is a little "bad" news it's difficult to sell. However, whichever way it goes, it's time to buckle on those seatbelts for the next couple of months - see you on the other side!

Thornback - FWIW todays Cenkos note (about ASD-1X) shows PBT of US$12.1m ie about £8.6m for 2021

DavidWK. I do not know what the market cap should be. What I was pointing out was that I don't think your revenue figures made any allowance for the PSC. Under that arrangement I think I'm correct in saying that the max share of revenue is approx 42%.

DavidWK - I don't think you've allowed for the PSC impact?

cont.....

I think BL and CL were ill advised by people who should know better!

I admit I have sold down part of my holding - partly because I want to invest elsewhere. I think UOG will prosper but, dare I say it, there is not actually that much going on that is under the control of UOG and our board (eg Egypt and Italy) - with the exception of Jamaica and some N Sea. I'm slightly surprised they have not seen fit to announce the delayed Hibiscus payment. I will be pleasently surprised if BL really expects to be in a permanent "closed period" over the next 12 months - sounds like a lot of activity!

I've made my views on this whole warrant issue before - now way down thread but I'm not repeating them all again now. However I still think it was very clumsily managed by the brokers and could have been handled much better. Above all it demonstrates a weakness in the composition on the shareholder base. This also, I think, is the root of the problem some have identified as come sort of consortium who have a downer on UOG and are always selling into any strength, thus depressing the SP.

What I'm getting at is that, especially after the Rockhopper acquisition, there is no real institutional base - it is all virtually PIs. As many have noticed, several new holdings were just under the 3% notifiable level and why do you think that was? A PI holding of course. Institutions do not mind 3%+ holdings being disclosed because it adds stability. You know you would be reassured if you saw names like Schroders, L&G, Baillie Gifford, M&G, Prudential etc etc you would think " if it's good enough for them then....". However we have one - Premier Miton and possibly Jarvis IM but I think the latter is essentially a retail broking business under different brands. It's all very well well listing top 10 shareholders - Hargreaves L, Interactive Investor etc etc - but they are where we PIs hold our shares - ie it is all retail.

If I can take you back to Rockhopper - some 167m shares were issued (placing, subscription ) plus a further 114m to Rockhopper. The latter had to be placed out later (I think Miton appeared at this point but haven't checked). So, I don't think there is some great conspiracy but merely a ton of shares held mainly by the likes of you and me - who probably trade part of their holdings too! I don't think UOG is ever going to attract "hot" money but a relatively small volume of shares can affect the SP quite dramatically as we have seen recently.

Some of us (ie me!) have been holders since May 2018. So, I get slightly irritated by being told to be patient, take a long term view - well in my case I have been a holder for 3 years and the SP is now lower than it was for most of 2018!

What should have happened with the warrant issue was the following:
1. BL and CL beg/ borrow /scrape together say £15 - £20k each - at least "something" out of their net salaries of £125k and £120k respectively (my estimates - excluding 2020 cash bonuses of £70k net)
2. The brokers should have brought in as "institutional insiders" say 4-5 to preplace the £0.9m, conditional only on listing, at say 4.5- 4.6p and announce it as all done and dusted on the main announcement - which also should have explained the directors involvement/position.

This goes back to my shareholder constitution point. The institutions were just not there. Instead we just watched the SP dribble down for 4 whole days, while nothing seemed to be happening, and the brokers were trying to get them placed into a declining SP before it was "got away" at 4.25p.

cont....