The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
To have been able to add some more today at 14.8p, didn't expect to get the chance to do so at that price - averaging 15.3p overall. I wouldn't be at all surprised if the new team who came onboard already had at least one potential target in mind, given their previous experience in Africa and contacts at other companies. I certainly think it looks much better now than with the previous lot in control and basically just sitting on the cash doing nothing! Although oil prices have risen a lot since a year ago, we also now have a situation where the biggest oil companies are moving out of some parts of the world and looking to keep core assets as they start to move more towards renewable energy - Exxon for instance has walked away from both Ghana and South Africa during the past year, as part of an overall strategy to leave the continent and focus on its core assets.
All you can do is wait and see how things are resolved, and what that means for equity holders. One problem with administrators is that they aren’t cheap - often in these situations they are the ones who end up doing best as their fees come out of any money that is recovered before even the creditors get paid! Hence why you don’t tend to call them in if there are other avenues to go down. I’ve not followed this one closely recently but am aware changes have been made (obviously noticed the news on Friday though) - previously was one I was very bearish on under previous management with the UniLad stuff etc, plus of course the involvement of Sefton!
Cash2 - it’s not looking good here as administrators are usually the last resort, but hope things turn out better than they look. One thing I would bear in mind in future is that a main market listing isn’t necessarily a positive with these tiny companies and sometimes actually means they can get away with more, without scrutiny (no Nomad watching over them, like on AIM).
If the BOD here had a plan they would be crazy to have let it go into administration - administrators don’t do it for free and usually tend to be the ones who do beat out of it financially, due to it being a costly process and last resort! I’d be amazed if there was anything left over for shareholders once the debt has been settled and the administrators paid for their services.
Billgray - explains why the bonds are currently trading at 49.75-60.5, and with such a high YTM
No official announcement of the convening of an EGM
A lot is riding on the success of the appeal, as per the comments from the company itself in the January 25 2021 RNS when the SOR was launched:
‘Faced by the on-going serious problems arising from the current complaints situation, Amigo considers that the Scheme is the best way to treat the Redress Creditors, the FOS and all its stakeholders fairly. In deciding to commence a Scheme process, Amigo has considered the alternatives to a Scheme. If the Scheme fails, Amigo will likely go into insolvency and based on its calculations no compensation would be paid to customers.’
DiveCentre - interesting and shows I wasn’t imagining/mis-remembering things! As per my earlier post about my recollection of the OGA rejecting the Lincoln tie-back on the grounds of gas disposal/flaring limits.
Slift - I wouldn't dispute any of that in terms of impairments etc, but on an accounting basis, insolvency would mean that the company has net current liabilities (as opposed to assets), which currently it doesn't, but will do when the debt becomes due within 12 months and moves to a current liability.
Currently technically isn't insolvent as the current assets (although some of that is no doubt restricted cash anyway) exceed current liabilities (those due within the next 12 months), but that will change when the bond repayment becomes a current liability after July and is reflected in that accounting period.
adoubleuk - I can't recall exactly why either as was some time ago, and not even sure if the full details were ever revealed. Possibly down to how the excess gas would be handled and restrictions placed on flaring the excess that isn't utilised?
adoubleuk - wasn't Lincoln put on hold due to the OGA rejecting a tie-back to the EPS? Aside from Spirit (which in itself is in the process of seeing a large chunk of the company sold off by Centrica) deciding not to go ahead with the FID at that time?
Some bond covenants are listed here, in section 10. Including mention of those relating to a change of control:
https://www.hurricaneenergy.com/download_file/force/361/309
Form 8.5 are used by exempt principle traders I believe, who are basically acting on behalf of clients when they buy or sell, rather than on their own account. The 8.3 form is used for any holder with in excess of 1% of the shares in issue - they have to make an initial declaration of their holding size, and then update via further 8.3 forms whenever the size of their holding changes at all. That’s the gist of it anyway!