The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
Franky, if that’s true, he was a poor appointment in the first place. Gary already knew he wanted a scheme in October 2020 and Mike was brought in in November.
Amigo has publicly been talking about a rights issue for months so Gary has had time to work out whether Mike could do that successfully.
Mike left his role with immediate effect hours after a monumental and highly controversial RNS. Your explanation doesn’t ring true and, even if you are right, it is merely further evidence of incredible tactical naivety by Gary and BoD.
6 December RNS says the raise will need to generate £70m. To get that sum from 9 billion shares, each new share will need to be bought for 0.7777p per share. If you have to buy 19 new shares for each existing share, you’ll need to find around 15p for every share you currently hold.
You say you invested £50k at 10p per share. So you have 500,000 shares. 500,000 x 15p is £75k.
Jimbo, you are the first person I’ve seen who has said that the recent RNS was correct to say 95% is standard in these situations.
In which case, the question remains, why didn’t Gary and his well paid cronies from Freshfields realise that before they proposed Scheme 1? And why didn’t FCA / judge point out that they’d missed this important standard?
If these proposals fail, Gary has to go. Like Boris, he may cling on because there’s too much of an emergency going on for him to be removed.
From my perspective - it’s either the scheme with Gary at the helm. Or it’s a new scheme, Gary gone, but surely the moratorium gone too. And I don’t see Amigo surviving the end of the moratorium without a scheme.
I think it had to be released now because Amigo is going to court in three weeks for the first scheme hearing, which has to agree that a creditor vote can proceed. The judge will want to know that voters have certainty about what’s on the table.
I don’t share the view that this is a tactic to get a better offer for shareholders. Gary can’t afford for a second scheme proposal to fail. If the vote doesn’t get permission to proceed on 16 February as per these proposals, I think it’s game over.
Gary and team have had EIGHT MONTHS since the first scheme was rejected. They won’t be given more time to come up with new proposals. I can’t see FCA extending the moratorium again as it’s already over a year old. If/when the compensation taps get turned back on without a scheme, Amigo runs out of money very quickly. The directors would probably have to place the company in administration to protect secured creditors.
I am looking forward to the answers Gary gives the Action Group but I don’t see how another route opens up from here. This is Gary’s answer and it’s the only game in town.
They need to be asked on what basis they say a 95% dilution is a “UK market standard” where redress creditors are not paid in full.
And they need to be asked - if it really is a UK market standard - why their well paid lawyers and advisers proposed Scheme 1 without that dilution.
There’s a balls up somewhere…
Largey, good shout. Although rights issue isn’t finalised, the RNS of 6 December 2021 says they want a minimum of £70m in new equity.
That would require shareholders to stump up 15p per current share:
£70m / 9bn shares = 0.007777 POUNDS per share or 0.7777 PENCE per share. Multiplied by 19, that’s an outlay of nearly 15p per current share to raise £70m.
Preciousmaj. No the decimal point is in the right place on my post.
£15m / 9bn shares = 0.0016666 POUNDS which is 0.16666 PENCE. Multiplied by 19 = around 3p outlay for each current share.
BoD are misrepresenting this situation. There is no market standard 95% dilution in these circumstances.
Judge also said they’d misrepresented the position to redress claimants during first scheme.
There’s a pattern here with this new team. Gary can’t hide behind Naynesh or Hamish. This is his handpicked team. As a group, they’re either liars or incompetent. Good on Mike for walking.
This has looked like a car crash ever since Gary first whispered the words “Scheme of Arrangement” back in October 2020. His stewardship and oversight has been woeful. And expensive.
I don’t know why Vinson or his houses or the rest of his portfolio is relevant here. I don’t even really know what the point of a list of shareholders is, especially an inaccurate one.
If that group intends to make representations to Amigo, that would be relevant but that’s not clear. The list even includes Gary Jennison. What’s the point of listing him?!
Bladey / RosieNas - I don’t think there’s a shareholder vote on this - unless others know different? It’s just a question of whether you choose to take up the share rights when offered. If you don’t, you’d be diluted.
Claimants get a vote on the scheme but the rights issue is a separate process as far as I know.
Every single one of them should’ve been reluctant to sign off an RNS that says a 95% dilution is market standard.
How much have they paid their advisers? Either they spectacularly f***ed the first scheme by not conforming to that market standard. Or they’ve said something else that isn’t true in an RNS.
I have thought for a long time that this isn’t an investable management team, CEO especially.
But one thing he / they didn’t make a shambles of was their salary and LTIP negotiations. Would he have got £600k per year if he hadn’t been appointed in the aftermath of Glen Crawford’s departure?
StanleyPro, they might have that amount in cash. But their redress liabilities swallow the lot. Amigo is protected by the FCA moratorium which enables them to collect the loan book without paying redress. It’s only because they haven’t been forced to lay redress for over a year that the cash is there. That’s why market cap is lower than cash held.
Hi Mark, thanks for that.
Yep, agree those % are based on today’s price. But the cash figures should stay same I think. So, stripping out reliance on current share price and sticking to cash figures, for any shareholders taking part in full, is it looking like:
- the minimum raise (£15m for scheme and nothing for relending) will cost around £30 for every 1,000 shares held.
- for every additional £15m Amigo wants to raise to support relending, shareholders will have to pay another £30 approx for every 1,000 shares held.
Again, that’s very fag packet.
They’re issuing around 9 billion new shares. But isn’t the key how much they need to raise? Here’s a starter for ten…
The minimum the rights issue needs to raise is £15m for the scheme claimants. On that basis, the 9 billion shares would be offered at 0.1666p. To take part in full, a holder would have to buy 19 of them for each current share. 0.1666p x 19 is just over 3p, which is basically the price of an existing share. So, each holder will have to find approximately the value of the existing portfolio (as it stands this morning) to take part and all of that will be put in the pot for creditors.
If Amigo want to raise £45m, (£15m for the scheme claimants and £30m for new lending), the new shares would be offered at 0.5p (9 billion new shares x 0.5p is £45m). 19 shares at 0.5p would be 9.5p. So each shareholder would need to find around 3 times the value of their portfolio right now to fully participate.
Fag packet only, just having a first go and welcome any other ideas / perspectives.