Member Info for Franalex

Shareholders will get nothing in an administration. They are at the back of the queue behind secured debt, creditors etc. Debenhams, Interserve, Thomas Cook, etc all went into administration and in each total shareholder wipeout. Administrators act for creditors not shareholders.

If anyone invests more than they can afford to lose, it is their fault and nobody should ever borrow heavily to invest in a company that has yet to come into production. Mining companies are notoriously high risk and over the years have cost investors billions. By all means have these businesses in a balanced portfolio of investments but never risk everything regardless of what individuals or share tipsters write. It is more likely to go badly wrong than make a fortune as any research will show and this looks like another to add to that history.

Looking very unlikely, there are a limited number of companies who are large enough and would want it and PE Houses will be nervous about its evident capacity to consume cash. I am hanging on as I sold Hyder PLC too early a few years ago when a Board backed takeover flushed out other bidders but different sector and cash generative.

For some years, I have thought Amsterdam a more appropriate market than London, given how little business there is in the U.K. I personally would like to see the UK listing go, given the cost of this. Disappointed in the comment on ELWA as I believe a sector experienced executive board would have seen this coming and planned for it. I still believe it is under-valued but my long standing concerns over the current management team remain.

Do not disagree with what you say, and I do think I am more likely to make money on this rather than Sirius, just alerting those who think they are certain to make money and quickly, that there are risks along the way and I do think that another fund raise will be necessary at some point. I just hope they put it in place well before it gives an investor the upper hand in negotiations and they think long and hard about the relative merits of debt and equity.

I have a small holding in both this and Sirius and see them both as part of a speculative portfolio some of which may come good, but others will not and recognising that in these type of businesses there is often the need for significant funding to get the mines into production and cash generation. I attended the presentation last year by the CEO who made a compelling investment case, but he would. Nobody should ever commit more than they can avoid to lose in this type of venture. Sadly, particularly in the case of Sirius some seem to have fallen for the “get very rich quick” and “can not fail” cases and appear to have seriously over committed themselves.

John,
Supposing the share price had rocketed, would you have wanted to share your returns with bondholder whose returns would have been capped. The relative risk and reward of all elements of a capital structure are well known and anyone investing in ordinary shares should be aware of this.

Around 15 years ago Shanks and Viridor were estimated to have around the same market value and Shanks was first into the PFI market. Operating in the same sector, the current estimated difference in market value gives an indication of how poorly Renewi has been managed relative to its peers. As a long term holder I continue to hope that a decent, and sector experienced management team will start to create rather than destroy value.

Agree, a major downside seemingly off the table.

Also saw this and I think they are an activist investor who purchased their earlier holdings at a much higher price. In order to do something they probably need to get support from a number of other institutions. Over recent years there has been a lot of PE interest in the sector and whilst Renewi do not have the potential landfill liabilities of others, they do have a legacy defined benefit pension scheme and the seemingly unquantifiable ATM issue. Both of these are potential red flags to a PE House.

As one of those old (10years plus) Shanks shareholders I am pretty sick. Since turning down the Carlyle 120p per share on the basis that it undervalued the business, it has been on a continual downward trend. As I have posted before, I believe that the executive Board lack the sector experience to turn it around. Salaries have substantially increased and performance got worse. Until ATM is fully resolved then I can not see a bidder emerging meanwhile the major U.K. PFI contracts get closer to the end. I think it could recover but needs an activist investor to give it a good shake. In my view listing is in wrong country now and the money and time spent on branding as Renewi was a total waste. Everybody I speak to in the sector saw nothing wrong with the Shanks brand.

Agree with you. Why they have not moved the listing to Amsterdam has been beyond me for years and the change of name was expensive and confusing, particularly as the Dutch business trades under a range of names and had never adopted the Shanks name.

I think there is significant upside potential but only when the full extent of the ATM situation is clear and that probably includes being certain there is no major contamination clear up cost in the site and the adjacent canal. Also as I have said before, in my opinion it needs an executive on the Board who has long term experience (15 years +) in the sector. I would love someone in the company to explain why they thought that the £1.20 per share offer from Carlyle group under valued the business given what the Board has delivered since.

I agree it will get funded at some point but the potential funders will have little regard for the current shareholders. I suspect they will want it done via a pre-pack administration or by diluting the existing holders massively. In having access to funds in the knowledge that the business will eventually run out of money, they hold almost all of the cards.

Depends on your definition of failure. I think it will be built and deliver jobs, taxes etc but this may well be at the cost of the initial investors. Many believe that the Channel Tunnel has been a success but the initial investors lost substantially.

Russia who still mines asbestos and does not recognise the health risks.

Just hope none of your funds were managed by Woodford!

Not in aim. Still has a full listing just not in FTSE250

Whatever you think of him, he called Thomas Cook correctly all along although probably with far too many posts. Had people listened to him, rather than rubbishing his analysis, new investors would not have lost anything and long term investors would have got out with something.

Market Cap too low because of what someone paid.

Exactly what people were saying about Ashley on Debenhams or some Turkish investor on Thomas Cook. Market Cap is absolutely nothing to do what someone paid for a share and everything to do with the future outlook, generally immediate future outlook, on cash flows, and we all know Sirius has serious issues.