Member Info for GeneK

Positive news on a debt facility today. My view was that this should be a key focus of the management team and it clearly was. LEnders will (almost certainly) have been provided with detailed technical reports as part of this process. ALthough there are conditions precedent to be satisfied before the facility becomes legally available, I suspect these are not hugely challenging. This is a major positive step forward in my view. DYOR

I think that is a very generous approach. I'd adopt it with my kids but maybe not with management teams.

Small investors are at a considerable disadvantage on this point. They don't get to share the room with management teams and really get to know them and see if they get it or not. Even then it is an art not a science in my experience.

I wasn't impressed with the video I watched of the management team here but then again, it may be that they were just "toning down" the content for a retail audience. Hard to tell.

Best of luck with it!

Yeah, the market seems to agree with my concerns (or perhaps others) but you keep backing your own opinion. I am not arrogant enough to think I am ever smarter than the market but rather try and understand a big divergence like this.

To be clear, I am neither long or short Kenmare so I genuinely hope you are right. I am simply trying to provide a rational explanation for the huge disconnect between the "asset in the ground" and the share price. My suspicion is that management credibility in relation to the cost & funding of capex is at the heart of this. I could of course be wrong.

FWIW I think if they can put together a credible funding structure, you will do well here. I think they will get there but I never, ever invest if I have concerns in relation to a management team and that is unfortunately the case here.

How to value an ETF?

I have a degree in finance, an MBA and 25 years of experience in investment banking so I am sceptical enough about most "financial innovations" but an ETF is not particularly complex. Anyone that can't understand an ETF should most certainly not be picking individual stocks.

There is plenty of simply drafted information on what an ETF is and why it might make sense for you all over the internet, so maybe take a look at that?

Making a call on the credibility / performance on individual management teams is much more difficult than getting a basic handle on ETFs in my opinion.

You asked for background to my comment and I provided it. The article sets out the near collapse of Kenmare, a distressed restructuring involving a write-off and a debt for equity swap. It isn't the first or last time this management team got "unlucky".

I don't post much because I am typically a ETF investor. I remember this company and I am intrigued by the valuation.

I set out my concern re the management team and I stand over it. I hope I am wrong though and ideally that financing plans are announced in the not too distant future.

Good luck with your investment. It's not for me, for now at least.

You asked for background to my comment and I provided it. The article sets out the near collapse of Kenmare, a distressed restructuring involving a write-off and a debt for equity swap. It isn't the first or last time this management team got "unlucky".

I don't post much because I am typically a ETF investor. I remember this company and I am intrigued by the valuation.

I set out my concern re the management team and I stand over it. I hope I am wrong though and ideally that financing plans are announced in the not too distant future.

Good luck with your investment. It's not for me, for now at least.

Https://www.independent.ie/business/irish/kenmare-climbing-back-from-the-edge/34944268.html

Some useful historical context here:

https://www.independent.ie/business/irish/kenmare-climbing-back-from-the-edge/34944268.html

I am tempted to invest here as there is a clear disconnect between the notional value "in the ground" and the share price.

I have just watched the Investor Webinar from August and I was very disappointed in the management team, especially the CFO.

There was a real lack of urgency or energy in relation to bottoming out the future financing need or explaining why it makes sense to pay a high dividend at present before the cost and funding of the move are set in stone.

That might be OK for a proven management team, with multiple major capex projects under their belt but Kenmare has a poor track record on this and a chequered history with lenders.

You just cant ignore the possibility that the project costs more and arrives when prices are under pressure. The key solution to this is a well structured (flexibility) fully committed debt facility designed for such an eventuality. That should have been management's absolute focus. Instead, it seems to be an afterthought. We should be hearing about advisory team appointments (banking, technical, geo, etc.) , outline terms, discussions with Export Credit Agencies etc.).

My fear is that Lenders are not convinced by these guys who seem just too comfortable when they shouldn't be.

Sorry to put a downer on this. I still think its a great opportunity, it just needs a reality check at the senior management level. Needless to say the board will be sleepwalking through this but making all the right noises about sustainability etc. (P.s. why is the board so pale for an African company?)

Management and board of this company deserve enormous credit for keeping this patient alive and a significant share of value intact for shareholders. A lesser team would have seen a firesale. I for one will give them the benefit of the four for as long as it reasonably takes. To suggest that they are waiting to bury bad news on a small add-on development is an insult to their hard work. If I thought that was their level of professionalism, I would sell my holding and await their departure in due course.

Indeed. Though we will never know all the details of whatever deal they are doing. Will be interesting to see if INM quietly drops any attempt to recover the costs of legal and regulatory action against 3rd parties connected to shareholders in due course. A topup for certain shareholders by the back door.....

Aligator, I like this company and its story. I especially like the management team. I think though that you are underestimating the existing dilution. The FinnCap report uses a fully diluted share count of 311 million. These pre-existing options are I think owned by LOG at very low strike prices as part of their funding deals with IOG. If, as we hope, the story is positive for IOG, then these options will be diluted and LOG will own (before further dilution) c. 60% of the company. That probably explains in part the gap between your valuation and FinnCap.

Thank you for the welcome!

- I have been invested here on a small scale since shortly after the IPO and read this chat on a daily basis. It has been an entertaining ride to say the least . My thoughts are that if they can get up and running at a cost of anything like £100m then it would be very impressive.

Like you, I am not that concerned about a dilution if they can raise a substantial proportion as senior/junior/other debt. What I think "trustatrade" is missing is that the EV is likely to increase considerably if they raise this funding, so even if they do need to raise £20m (or considerably more), they will be doing so not against the current EV but against a significantly higher one. In other words my view is that it is very possible to raise equity at a higher price than the current share price, if the raise is accompanied by information (funding confirmation) that leads to a higher EV.

Only one ignorant opinion but if they can get to production for c. £100m, then this is a very, very attractive prospect indeed.

GeneK

The key piece of information we are missing is the estimated capex spend to get to first gas. That is what will determine the scale of the fundraising and consequently the dilution. Has anyone any information / thoughts on this? Aligator?