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Way over done I think, especially as any changes are likely to be made after the next election.
Whilst a decent currency gain was made on the acquisition of Avantus, they should be integrated this quarter giving significant upside.
Maybe city slickers making a few quid, on flaky news flow.
Jack
I thought Govt had committed to 3% Defence spending ?
Either way , QQ are the biggest FTSE 250 faller today at 6.6%.
Where is the RNS stating “Management have no reason for the drop” ?
Jack
After the strong results yesterday, I cannot believe the 4.25% drop.
Mind you BAE down 5.56% but FTSE flat ?
Jack
My RBD document turned up this weekend setting out the case for S&S.
The document it states vote by 08th Nov for your vote to count with brokers.
Coincidental that the investor briefing is 2:30 on the 08th.
Maybe another rouse to cut off Shareholder votes.
I have now voted for all 11 resolutions, mainly because you never reinforce failure.
Make sure all votes are cast tomorrow to ensure your vote counts.
Jack
Lenin
On the contrary. I have been here quite some time and have been a consistent backer of the existing Management. I understand that not all investments will come good and was prepared to write off Coulter, Wick et al on the basis that Management would back some winners.
In reality, nothing has materialised thus far. To call Victory a success, investing £7.5M to get back £12.5M does not cut it for me. The approach on Deltic was woefully inadequate and it appears to me that WN is proceeding at such a slow pace, it might as well be mothballed.
As far as I can see the existing Management are trying to bat away the requisition team by calling them out, rather than a solid defence of strategy and existing assets.
We know that Sattar has access to funds and contacts in the capital markets. He held up a RBD placing and went in 50% on the Corallian convertibles. He is on record that advancement of existing assets would be done in a non dilutive manner.
They will focus on assets rather than invest in companies.
They will cut the admin exorbitant admin expenses of the two CEOs and replace with someone who has relevant technical and commercial expertise.
They have skin in the game and are much more aligned with other Shareholders.
They will look at assets that have production capabilities to start Revenue and Profit generation.
The proposed £4M dividend will be replaced with a share buy back or continue to invest in credible projects.
They appear to be seasoned professionals with a track record of making things happen, at pace. Unfortunately S&S are throwing stones in glass houses as there track record of value creation is abysmal.
I am not after a Tom, Dick or Harry but I think all Shareholders need a step change in positive, value accretive activity.
Jack
Lenin
Acquisition Premium ?
What like when S&S spent my hard earned cash trying to buy Deltic with RBD shares, equivalent to the value of Deltic's cash holding.
Not only was there NO Acquisition Premium, buy S&S thought the Deltic licenses should be thrown in for free. This included Pensacola and Selene which are both operated by Shell.
As Michael Spencer said at the time "the RBD offer lacked any compelling strategic rationale, commercial logic or operational synergies"
Now that the BOD are on the back foot, its a bit rich talking about Premiums when they blundered into Deltic on the same premise?
Jack
I doubt it.
Why would the existing Tax relief on new oil and gas investments be changed ? And for what conceivable reason in a sector that needs support to continue their investment.
I would be expecting Shell to full offset the pensacola cost against other taxable profits.
Companies can be exempt from the Energy Profits Levy through a new Investment Allowance, and a First Year Capital Allowance. Altogether, this doubles tax relief on investments made in new oil and gas fields from 46.25p on every pound to 91.25p in every pound.
https://www.gov.uk/government/publications/cost-of-living-support/energy-profits-levy-factsheet-26-may-2022
91.25p recovery not to be sniffed at.
Maybe a relook at windfall taxes on excess profits due to Putin, but why would the Government try to stifle investment in a key area.
Jack
Smythery,
"Oza’s wife owns 2.6% of the company"
Are you able to provide a source for that statement, as WIFE holdings are a notifiable event under DTR 5 and AIM rules, mainly to avoid purchasing in Closed periods ?
https://docs.londonstockexchange.com/sites/default/files/documents/aim-rules-for-companies.pdf
On 23 Jul 2020, during the Deltic fiasco, we were notified of the Directors and close relatives holding:
https://www.lse.co.uk/rns/RBD/form-8-opd-reabold-resources-plc-4ca68c3jejw2vny.html
The website as at 08 Aug 2022 and the last set of Statutory results shows that the Directors hold 3.11%:
....................................Shares.........................................Options
Jeremy Edelman........173,545,454
Sachin Oza....................36,551,821...(0.409%)...........150,000,000
Stephen Williams..........29,643,953...(0.332%)...........150,000,000
Marcos Mozetic...............4,545,454
Michael Felton..............25,240,599
Anthony Samaha............7,818,182................................25,000,000
Directors.....................277,345,463...............................325,000,000
..........................................3.11%
Total.........................8,929,612,550
Unless the option expiry dates have been extended again, they are all time expired.
I make S&S holding at a mere 0.741%, which is not an indication of "Skin in the Game"
Jack
Good to see the SP back at the 3.5p cash raise.
Despite all the adverse comments, PIs have had a great opportunity to get in at significantly under the raise.
IMO good value ATM
Jack
Itsawrap
RBD went first, long before UJO, and Rathlin also did a similar exercise.
https://www.lse.co.uk/rns/RBD/capital-reduction-update-8dfgsbtt4qs410l.html
Jack
"The Board believes the next 12 months could prove to be an exciting time for Reabold and its Shareholders. The Board expects to see the results from the Pensacola well, future drilling on the North Sea portfolio following the farmout process, and of course the drilling of the first horizontal well at West Newton."
Quoted from our BOD, the next 12 Months looks like slim pickings:
1. No mention of RBD's 42% stake in Daybreak, with Kamran Sattar holding 7% and Portillion 33% = 82%. Development of the Cali assets therefore looks remote with Daybreak cash at $413k at 31 Aug ?
2. No mention of RBD's 50.8% stake in Danube or how the Parta licenses will play out ?
3. "expects to see the results from the Pensacola well" - This is a Deltic play with Shell, so why is it one of RBD highlights ?
4. "North Sea Portfolio". Hmmm Two parts to this I guess?
a. The six licenses bought from Corallian for £250k. As RBD were a 49.99% shareholder, RBD technically already owned half of the intrinsic license value? Equally, paying over £250k to Corallian, half of that cash also belonged to RBD. So effectively RBD bought six licenses for £125k, say £21k each. Any value dependent on a farm out process ?
b. Simwell Resources - four licenses for £1M effectively paying off Simwell Parent, Comtrack Ventures Ltd (Cyprus). At least only £333k was paid in Cash to Simwell Creditors, with Simwell picking up 134M shares and Creditors 113M shares. A further £150k payable to Simwell if License P2332 proceeds to drill. Operated 70% by Shell / 30% Simwell and wholly dependent on the pensacola result?
The other three licenses P2329, P2427 and P2486 are only 10% Simwell. The other license holders are Horizon Energy Partners Ltd 77.5%, who have negative net worth of £1.4M and owe their US Parent Horizon Energy Partners LLC £1.9M, and Ardent Oil 12.5%, who have negative net worth of £388k and ultimately owned by Ardent Oil (Luxembourg) S.A.
I can't help thinking that the BOD have bet £1M on a successful pensacola outcome?
5. "and of course the drilling of the first horizontal well at West Newton". That old chestnut ! Its like pulling teeth, waiting for some sort of confirmed extraction, where I'm too scared to do the NPV read across from WN to Victory to ascertain any great monetisation value.
Like others on here, the £4M potential return to Shareholders appears to be lastminute.com. I would have liked to hear how the horizontal drill will be financed by all Parties, rather than a last minute give away.
IMO I think the BOD have lost the plot.
Jack
https://www.otcmarkets.com/filing/html?id=16157367&guid=2Mz-k6_mgTa7B3h
I see Daybreak have finally filed to 31 Aug, after missing the deadline to file.
Note on page 17
“Our management cannot provide any assurances that Daybreak will ever operate profitably. While, in the past, we have had positive cash flow from our crude oil operations in the East Slopes project in California, we have not yet generated sustainable positive cash flow or earnings on a company-wide basis.“
I think having burned through the $2.5M capital raise, with $413k left, and negative net assets of $1.6M, I tend to agree with Managements assessment.
I hope RBD don’t throw any more cash into this, but it does beg the question why the Cali assets were wrapped up and discarded in this fashion?
I expect the Director update will address this issue and why no physical work has been carried out at WN for over 12 months and the dire Victory valuation.
Not a happy Jack
Taking a look at our Articles, files to Companies House on 02 Oct 20, its Clause 87 to 90 that deal with appointment and removal of Directors.
https://find-and-update.company-information.service.gov.uk/company/03542727/filing-history
Specifically, Clause 89 deals with removal, which is subject to an “Ordinary Resolution by Special Notice”
“A resolution to remove a director, or to appoint somebody in place of a director so removed at the same meeting, is not effective unless special notice of the intention to move the resolution is given to the company at least 28 clear days before the meeting at which it is moved.”
So, when the GM is announced add on at least 28 days for the actual meeting date.
When posting on the timeline for the Corallian sale, I stated that it was the Convertible loan that would be the driver for the completion date, due to the penalty to existing Corallian Shareholders (Other than RBD, which remained at 49.99%) in favour of the “Strategic Investors”.
https://www.lse.co.uk/rns/RBD/confirmation-of-increased-investment-in-corallian-uixmjhchyoyhvui.html
As Corallian have already executed the SPA to Shell, that deal is already in the bag.
https://www.lse.co.uk/rns/RBD/spa-for-sale-of-corallian-to-shell-for-16332-million-tq6foibxob1u11g.html
Whilst I did not like the Victory Price achieved, I think that the approach is opportunistic and deemed for failure. For an Ordinary Resolution to be passed, it would need a 50% majority from Shareholders voting.
Kamran Sattar is wasting Shareholder funds to bring this GM, however the only good thing out of this is that the existing Directors will need to convince all Shareholders why they should continue to believe in the existing strategy. Maybe they could answer why the sluggish development of WN is still dragging its heels, when we are in such an on-topic sector with Govt all over it.
Jack
Perish the thought……
Looking at the Corallian confirmation statement dated 22 Oct 21, Shareholding 46 = PERSHING NOMINEES LTD.
They are listed as having
295581 ORDINARY shares or 3.57% of Corallian.
No wonder the latest Articles kicked them into the long grass, if presumably they disagreed with the Victory valuation.
https://find-and-update.company-information.service.gov.uk/company/09835991/filing-history
The other interesting point is they had sold 138509 shares transferred on 2021-08-16 to RBD, along with others listed.
The conversion at 474 per Corallian share gave them 65,653,266 RBD shares, or 65.6M / 8,930M = 0.74%
https://www.lse.co.uk/rns/RBD/completion-of-offer-to-acquire-shares-of-corallian-vbfh9zj0wizn5ce.html
Whether they already had an RBD holding, and/or accumulated the difference afterwards, we are told Pershing now hold 6.93%.
Although Pershing Nominees Ltd are dormant and have a Net worth of £2, they are 100% owned by Pershing Securities Ltd
See Note 10
https://find-and-update.company-information.service.gov.uk/company/02474912/filing-history
Slightly larger entity with £13M pre tax profit and Net Worth of £146M.
Then Pershing Limited, all the way up to The Bank of New York Mellon Corporation.
Mellon are the world's largest custodian bank and securities services company and probably know their way around DTR 5 shareholding disclosures.
Mellon……you will need much more than 7% and a very convincing story to take me out.
Jack
OO
As I previously posted, the amendment to the Articles looks like a tidying up process and nothing to worry about. Clearly greater than 75% of Shareholders are for the deal with Shell, as 75% or more passed the resolution. At the end of the day 100% of Shareholders could be for the deal, which makes the whole thing academic anyway (But we don't know the %age for the deal).
Seems to me that the old 10.5 clause was unnecessary. The old 10.4 clause, already gave equal consideration for selling shares and remaining shares, so why would you give additional powers to the remainer's if 26% of them disagreed with the price . Ludicrous situation, and as we have seen, easily remedied.
Jack
OO
Here we go again. It is not uncommon for a Purchaser to require Articles to be changed, if their lawyers spot anything that might need further clarification.
Firstly, the new Articles were voted in by at least 75% of Shareholders (See the Resolution accompanying the Articles).
10.1 Just clarifies that existing Shareholders (Over 75%) can force any REMAINING MEMBERS (The NEW bit - "Including any Holder of any right or instrument convertible into Shares, including but not limited to the convertible loans")
What this means in practice is that 75% of Shareholders can force all other remaining Shareholders, and anyone holding a convertible instrument into Shares, to sell up. This sort of blows your previous theory out of the water, that there are numerous share options outstanding.
10.5 Just clarifies that ANY NON CASH consideration would be converted into CASH for any REMAINING MEMBERS and if the REMAINING MEMBERS disagreed with the conversion, it would go to the Auditors to decide as an expert. Remember that the offer is £32M in cash.
Also note in the link below that "Payments to Shareholders will be made following receipt of the funds from Shell, and AFTER payments have been made related to the transaction costs and other outstanding Corallian liabilities".
https://www.lse.co.uk/rns/RBD/agreed-terms-of-conditional-sale-of-corallian-hgw4nkr3yz73xsi.html
Obviously the Annual Confirmation Statement due on 22 Oct 22, will confirm number of Shares in Issue. I will check it just for fun :)
In a nutshell, nothing to worry about the Article changes
Jack
QQ delivered strong and consistent operational performance in the second quarter.
Order intake continues to remain excellent with first half orders at c. £800m, 18% higher than the first half of FY22
good organic revenue growth
profit in-line with expectations and
strong cash conversion.
With more than 90% of our FY23 revenue under contract
confident to deliver in-line with expectations for the full year
Excellent growth in Global Products ($ based)
Plus strategic milestones in the 2nd Qtr in M&A
“All three transactions demonstrate disciplined execution of our strategy and capital allocation policy - focusing our capital deployment into strategically-aligned businesses to support and drive our long-term growth in our six distinctive offerings in our three home countries, the UK, US and Australia, as we continue to build an integrated global defence and security company, delivering good shareholder returns.”
No bad in the current climate and excellent opportunity with the new acquisitions
Jack
OliveOil
Basically a complete misunderstanding of Corporate deals.
1: from the RNS : the gross sale proceeds are £32mm at £3.20 per share - that means there must be 10mm shares.
No – Companies House last update showed 7,540,686 shares in issue, across 57 Shareholders. RBD owned 3,769,487 or 49.99%
Gross £32M would be before legal fees and deal finder fees. It’s not uncommon when selling a private business to have an advisor and when the business is sold successfully, they pocket a %age of the Gross, typically 10-20%. This incentivises the advisor to get the best Gross price possible, but I have also seen fixed fees being agreed. H&P Advisory Ltd were doing a strategic review and were probably instrumental in the deal with Shell.
So your Gross would dance down to say: £32M * 15% = £4.8M Legal Fees c£500k = Net £26.7M
Businesses are normally sold on a debt free/cash free basis. For example, Corallian’s accounts to 31 Dec 21 had Debtors of £43k, Cash of £596k and Creditors of (£1,025k). Negative Net Assets of (£386k). Obviously, all liabilities of a business would need to be settled before any distribution to Shareholders and that includes movements to the transaction date. I would expect that liability to be c(£1M).
Enterprise value = £25.7M, 49.99% to RBD = c£12.7M
The £3.20 was a reference to the Enterprise value of the business post all liabilities.
2: RBD , as you pointed out, will hold 3.96mm shares after the converts. According to 1: That's 39.6% equity.
No – The Loan Note issued on 24/02/21 for £1M had 15% interest per annum, accruing daily. Half of the Loan Note was sold to Strategic Investors on 03/03/21. This was done to keep RBD %age at 49.99% after conversion.
So £500k plus Interest = c£625k / £3.20 = 195,416 conversion Shares for both RBD and the Strategic Investors. 195,416 * 2 = 390,832 plus Shares in issue 7,540,686 = 7,931,518 shares in total.
RBD share post conversion 3,769,487 + 195,416 = 3,964,903 / 7,931,518 = 49.99%
3 & 4
No & No – See above
Quite simply the numbers do add up but unfortunately £12.7M net to RBD was in my view on the low side. It’s a pity that the loan Note valuation was set at £3.20, as that’s the number the deal eventually gyrated to.
Jack
QQ were at FTSE position 149 as at 30 Sept 22, up 10 from 159 from the end of August. Despite coming off our SP high of £3.96, QQ have faired better than others in this tough market.
I want to see some reinforcement in the Interims next Wednesday on performance in the current market to plan, how the defence sector in general is perceived and also expecting a robust update and further information on the recent acquisitions. The sooner they are in, QQ can start to benefit from their earnings and EPS growth.
Jack
Deemule,
Daybreak were required to step through a number of conditions before it purchased the Cali Assets via an Equity Exchange. Restructuring their capital was one condition, converting debt to equity, and raising US$2.5M was another. Portallion Capital Ltd were used to raise the US$2.5M. Therefore other than having the connections to Capital, looking at Portallion is a red herring. End.
RBD are now a major Shareholder in Daybreak (OTC traded), who are experienced in Cali, and are now funded to grow Daybreaks existing oil portfolio and the Cali assets transferred from RBD. Daybreak are also operating in a much better oil price environment.
It was obvious to me that Total was not the purchaser of Victory, as I stated a while back that Total had sold 20% of the GLA to Kistos. Didn't make any sense that Total would then go and buy Victory as that would have made a nonsense of their stated strategy.
Shell stepped up, which is good news, as they are partnering with Deltic with their impending drill of Pensacola. Deltic just raised £15.9M, so are all cashed up to develop their relationship with Shell and Cairn Energy in the SNS. Happy to have a holding in Deltic, awaiting action.
Anyway clearly RBD were successful in selling Corallian to Shell, and that's probably why RBD then purchased Simwell Resources (See they licenses in the SNS - P2332 partnered with, you guess it, Shell.
Not happy with the 60% return on Victory £32M less legal fees and transaction %age for H&P Advisory Ltd. However, at least it provides the capital to advance WN, so that RBD can command a much high value of the implied NPV of $448M.
Unless of course, someone moves quicker on RBD (?)
Jack