Member Info for jimbogains

Am I right in thinking that if we have rights under a RI, we can sell them (assuming someone wants to buy them) if we aren’t looking to invest further whilst holding on to our existing shares? ie we can remain invested and potentially cash out without diluting our total position (cash + shares)?

I’m sure there’s something to read into the RNS, I’m just not entirely sure what that is. The lenders’ required reporting dates should have been very well known, so I can’t imagine bringing the day forward would be due to an earlier mistake. At the same time, what difference does one day actually make (particularly for the lenders who have more security than us shareholders). I wonder if the loan notes included a clause requiring some of the FCA/SOA issues to have been settled by end of November to avoid an event of default, and bringing reporting forward for a day gives them some extra time to reach agreement with them?

Not sure. Hopefully it’s good news anyway. Exciting!

Government prints land all the time… they just call it planning permission

Any idea what the timeframe between initial submission and rejection was last time around?

The only way there would be a rights issue is if there’s a good outcome to the SOA and the company wants to raise funds to ramp up its lending.

For now, the board runs the company for the benefit of the shareholders, it just has to satisfy its legal obligations (including paying creditors) in achieving that goal. It’s only if an insolvency process begins that the company is run for the benefit of creditors. As far as I understand it this hasn’t happened.

I’m interested by the talk of dilution. How would this work? Surely the ‘dilution’ is simply that there’s a compensation liability on the balance sheet based on whatever formula is agreed and that liability inherently reduces the value of the shares. If the agreed creditor leads to net liabilities on the balance sheet, the shareholder value has been destroyed and there’s no point in putting extra cash in - for a while, every £ you put in just goes to bringing you back to net nil. Might as well start from scratch with a new company in that case.

A good article on how deals are structured, milestones, etc… for anyone that’s coming at this from new:

https://www.nature.com/articles/d43747-020-00675-3

People are allowed to change their mind about a share. Porky did a great job in bringing attention to VAL but it wasn’t quite the deal he was after, so he pulled back and largely moved on. I would do the same if my view changed, as should each of you… no need for all these personal attacks, he had the same information as everyone else.

It’s like getting an Xbox for Christmas rather than a PlayStation. For some they will be disappointed because they didn’t get quite what they wanted. Others (like me and many of you) still see the benefit. Let’s try and stay positive on here people and don’t turn it into a forum for trash talking. I still have great faith in the management team who have shown themselves to be honest throughout this… looking forward to the Xbox in the coming weeks/months.

The reported results will be based on probable outcomes which, if there’s no SOA agreed, are likely to be on the same basis as before. Whilst I can see that the BoD will be keen to have something positive to announce before then, there’s no strict requirement for this to be the case… and the FCA will no doubt move at their own pace. I’m keen for good news when it comes (and sooner rather than later), but all these predictions on timing are pretty much baseless.

The market didn't know what deal was coming, and what with all the ramping, expectations got ahead of what was deliverable in the first RNS and as a result of various factors, the share price fell. That doesn't make it a bad deal... it just means that in the context of a heavily ramped up share price (at 3x what I invested at a few months back), the announcement didn't quite get investors comfortable that the risk-reward profile justified the previous pricing.

There is obviously still a lot of risk in this stock - as you note, the deal may not go ahead, and even if it does, there are questions over TRx and what level of income VAL201 could generate. That is why the market is still discounting the value of the business heavily compared to expected minimum levels of income if/when the deal comes to fruition. That doesn't make it a bad deal at all... and obviously if/when the deal is executed, TRx evidences its funds and ability to monetise this, etc etc, the share price will normalise at a much higher level.

It's the risk that makes it all so exciting (and so open to making significant gains/losses) - if you want low risk, go invest in a balanced fund! In my humble opinion, the market's view on risk appears to be overstated, and I have faith in the CEO that she will deliver the agreed deal in the very near future.

Thanks - yes it does make sense, cheers!

Hi Adam

I'm not sure what you mean by the following comment:

"The more I think about it, the more I think they should have placed a self-imposed cap on themselves, to drive it home for those of the more hard of hearing disposition:

"Milestones and royalties will be capped at a maximum of 4 indications".

It really is a low-bar swing."

... are you saying that VAL doesn't get paid any extra if there are more than 4 indications?

Also, to be clear, for the first indication, is $61m the absolute maximum that VAL can earn on VAL201 (other than e.g. on its service offering)? - i.e. do we have a maximum amount we can make at $61m + (3 x $32m)?

Sorry if this is all obvious

If that was his CV in 1999, just think what it must be like now in 2021!

https://www.nature.com/articles/nbt1199supp1_33.pdf?origin=ppub

Based on his background, he seems credible to me

1. Whether or not the FCA wants to encourage this type of business, guarantor loan providers do exist in other forms (with the FCA regulating a large number of them). Amigo performs a useful function.
2. In terms of the competitive environment, yes there are various others in the guarantor market - but based on a few Companies House searches, none of them seem to have anywhere near Amigo's scale (even after it's been out of the market for a while).
3. Whilst I appreciate that the directors might have an incentive to keep on earning their salaries, they have various fiduciary duties which would make it a bad idea to continue running a business if that prejudices creditors. Given that they must have lawyers all over the place at the moment, I can't imagine that they would not be fully aware of the personal consequences of continuing the business only to line their own pockets. The business continues, so presumably it can be inferred that they see a reasonable chance of success with the SOA and future business prospects for the company.
4. If, based on the close communications they must have had with the FCA as they went through the most recent process, the directors didn't feel that the FCA would sign off the SOA, then surely they would have just let the business fail already? The fact that they have formally submitted the plans to the ICC and FCA must surely imply there is an agreement in principle?

Thanks. I have researched and I’m not blind to the risks. I feel it’s not in the FCA’s interest to let the business go down, so I’m willing to take a punt. Just hoping that they make a decision soon as the suspense is killing me. I’m feeling positive… if there was no chance of reaching agreement with the FCA then wouldn’t Amigo have gone into administration some time ago eg when the lenders had the chance to call a default?

Thanks. So the next bit of meaningful news will come from the FCA, which presumably will take days/weeks rather than months. Seems like any changes in share price between now and then are purely down to speculation. Fingers crossed for a positive outcome - if amount of compensation to be paid is not too high and the company can restart its lending, there’s got to be a lot of money to be made. If it’s a bad outcome then I may lose my entire investment, but the potential upside seems to be far greater.

Is there likely to be messaging from the FCA before the court hearing? I had understood that the court would have waved it through last time around if the FCA was on board

How long did it take between submission of SOA and any news coming out of FCA/courts/etc last time around?

Kevin Cox stated in the broker appointment RNS: "We are very much looking forward to working closely with the Cenkos growth companies team to help deliver and further develop the strategy we have been building over the last year. After a period of consolidation and stability, this is a natural evolution in our growth plans."

Does the chat team have visibility over how Cenkos is likely to deliver value here? Their warrants are exercisable at 22p so they are already heavily in the money, but I can’t see that this is attributable to Cenkos (yet) - more down to people reading in between the lines from the Investor Q&As. I assume their job will be to ramp up interest when a deal is announced?