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Jesus, not another one. The convertible bond repayments don't just keep raining down like some nuclear strike. They will happen every quarter, and will be around 2% per quarter. Otherwise we are funded, so that's it, no other dilution.
I'm not proposing a change in management at this stage, the trial is progressing well, that would just be disruption and a distraction from the end goal. The numbers were more of a demonstration that the company could fall back on the DX sale at some point, either to clear the bond, or even to fund this venture over the finishing line.
Launch was acquired for 24m and Coris for 7.4m, totalling 31.4m.
The CL has now been reduced to 35.7m.
If DX could be sold for a smallish loss, say 27m, and that cash put in the bank, it could be used to cover those payments from here until a genuine inflection point is reached.
Whether that's a likely scenario or not, who knows. Surely must be under consideration.
No idea how much dx is worth now, but also worth reminding ourselves that the sale of that division will put cash in the bank. Even if at a loss it would still be preferable to further dilution, and likely restore some sentiment. It's a card to be played at some point, even if questionable to begin with.
Yes you are right, it's 42.1p, must have mis-typed. Agree, makes little difference to the overall dilution. It's also a good message from management that they are keeping in mind the balance between dilution vs cash repayment.
Under the bond terms, the repayment of interest and amortization is covered by:
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Share Payments:
For any interest and amortisation payments made in Ordinary Shares (which shall be subject to certain conditions including no potential event of default having occurred and maintenance of a minimum free float), the Ordinary Shares to be delivered shall be calculated by dividing the interest or amortisation amount due by the lower of (a) the prevailing conversion price, in each case on the applicable repayment date and (b) 90 per cent. of the Market Price per Ordinary Share (as defined below)
The "Market Price" is the lower of the arithmetic average of the VWAP for the Ordinary Shares: (i) on the ten (10) trading days, ending on the applicable date or (ii) on the five (5) trading days, ending on the applicable date, but in no event shall it be greater than the VWAP of the Ordinary Shares on the applicable date
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How then has the market price been worked out at 45p (resulting in a conversion price of 41.4p), when we have not even been below 45.5p, let alone averages?
That's right Wyndrum, there are plenty of examples where it just was not known by the market before an event occurred. If the market was all knowing the price would remain constant. It is not, get over it.
No wishful thinking. Go back and watch the latest presentation, it's all there in plain sight. No conspiracies, the data out is compelling already. Just time and patience to get this through the phases.
The drop over the past few days could be attributable to the quarterly bond payment which is due Monday. Following this the next dilution event will be July 22nd, which also roughly coincides with the completion of the 2w arm. It’ll be an interesting battle of sentiment and it’s not clear how the next quarter will play out!
This one has had me scratching my head. There is nothing I could find online about a requirement for a 40 day blackout in this situation. Why would the funds want time to offload, unless they believed the price would recover by now?
I think it's more basic, in that there is no good news story around the raise other than it was handed to II's on the cheap, and maybe the thinking is that keeping quiet is better than admitting that. It would have been a double shock to the SP. Better to dangle a high quality european investment fund in front of a the baying crowds and then introduce a self-imposed 40 day blackout in the hope that the price has recovered by the time it was "lifted". Pope Turner wouldn't say any more on that when I spoke to them, but did say it was coming to an end at the end of this month. Tick followed tock followed tick....
I had a go at explaining it here: https://www.lse.co.uk/ShareChat.html?ShareTicker=AVCT&share=Avacta-Group&thread=EDF71E44-3D7F-4737-9698-C36A5B2A888D
So, on top of the placing which is the main driver behind the drop in price, trapping of liquidity and the dent in sentiment, you are asking me my view on the poster event in isolation? As a veteran of the AIM market, wyndrum, I'm sure you know the answer to this anyway ;)
The poster was a minor liquidity event, which was quickly filled in. In the days of yore there might have been a few more days of excitement, but we're now in a post-bs era where liquidity is scarce, particularly on AIM.
AIM has always attracted gannets, but they're now fighting over ever smaller plates of chips. Another quality of a gannet is that it doesn't look too far or wait too long for its chips. If you told it to wait patiently until next month when a massive plate of chips will arrive, this is no good for the gannet, as it has to feed daily on everyone's scraps.
So, until the massive plate of chips arrives, which could be the 2w results, or early p2 results, and until sentiment returns, minor events such as the poster will be sold into. I read absolutely zilch into the underlying trial performance, except to say that as a result of the dent in sentiment, many will now require further validation or trial progress before injecting further capital. If the placing had been at 90p, I'd wager that we wouldn't event be having this conversation, and the share price would be back up above 100p already.
The share price fall is clearly as a result of the placing, and the dent in sentiment as a result. A lot of capital has been trapped above 100p, and so PI liquidity has been reduced. There will be those that kept some on the side, and others that bailed at the placing price, so it's a waiting game now to see how low this goes before piling in. A few more localised waves to go before this is reached. In the short term this is at the whim of trading.