Acquisition?23 Jan 2020 09:02
The company has failed to RNS on the 17th April whether the $5m loan was repaid in cash or not (note: that is all we needed to know, not the following detail on the shares issued and price).
Forewarned by shareholders, the BoD has been prepared to damage the SP and investor confidence in order to, it seems, hand over 20m shares to vultures who it was known would then take advantage of us. The sensible option to close the loan early and arrange a loan on better terms (eg RBL against £10m monthly FCF) was not pursued.
This is three poor decisions that you would perhaps expect from third-rate management.
The question is why?
Why, instead, did they not use money from the Oragroup facility, the cash received from the 7E transaction, the £10m monthly FCF, or the £50m oil trading loan?
I note the Euro 11.4m Oragroup facility originally stated (Dec 2016): 'available for working capital, potential asset acquisitions and general corporate purposes' whereas the 13th Dec 2019 renewal states: 'The Facility was originally signed in December 2016 and was designed for working capital and general corporate purposes. The Facility has been renewed for a further three years and will continue to be used for the same purposes as in the original agreement.'
Thus the wording 'potential asset acquisition' was removed from the later RNS although it will still be part of the original agreement. (And I assume that the Oragroup facility was not largely spent when the 13th Dec 2019 RNS came out, making the RNS deliberately misleading). Thus, it seems, the Bod did not use the Oragroup facility (instead using the Riverfort/ Yorkville trash loan for working capital) as the Oragroup facility has been earmarked for asset acquisitions. Perhaps part of a large acquisition - the remaining 7E oil business? Lekoil assets? Many others?
An explanation, perhaps, as to why our BoD has made the decision to retain the $5m cash loan? (The other explanation being that they just make poor decisions).
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