I've been told they are funded for 2020. Obviously if a large deal lands which needs servicing then they may need to raise but the share price would be at multiples by then. So rest assured no raise around the corner and as I mentioned previously watch out for those warrants. They'll want share price north of 0.7p to have them exercised. We are well set up here for 2020.
I've been in touch with the board this week regarding those very discussions. They continue to progress discussions with blue chip clients and large public institutions. Getting to deal stage takes time and moreso since there was a temporary halt due to lockdown but now they are back in talks and making progress. Lots on the table and an update on any one area will take us swiftly back to 0.6p as first stop. They have issued warrants at 0.5p and are good for cash. I guess the warrants will be exercised when price is 0.7p+ which will further bolster the coffers without having to place. The directors are upbeat and positive about the future. They've out in over £1m of personal hard cash into the company and soon we will see why.
I hope we have as many people from here on the call this afternoon. Would be good to get some solid questions to them and some of the LTHs are best placed in this regard with their deeper knowledge and history of the company
its all in the rns....£3.5mm is contingent on the european asets we are selling producing 100kscm per day for 4 months, Zenith have also stated in RNS "Production is expected to reach 113,000 scm/day following the completion of a series of targeted interventions planned during the next 6-9 months for which all necessary approvals have already been obtained."
From the same interim results you can glean how much they will save of cash hence why the WC position now is secure for a much longer period as per the final accounts:
"Post period under review, the Group announced a restructuring of the Bulu PSC acquisition terms, which most notably involved an amendment to the payment schedule of the cash consideration components to be paid to AWE Limited ("AWE"). Originally the Group had agreed to pay AWE a total sum of $8m ($1.04m in back costs and working capital adjustments and $6.96m in cash consideration) upon closing of the transaction. The Group has now agreed with AWE to pay the same quantum of cash but now phased over four instalments with the first being a sum of $2.5m payable on completion of the acquisition (which is pending, inter alia, approval for the transfer of the 42.5% working interest to Coro). The next instalment of $1.5m will be payable to AWE on 1 September 2020"
"The operative word is "within". That is before next April. Only an idiot would leave it to the last minute. September 2020 was a deadline finding the company in the interims. That was before the uncertainty of Covid-19. The cash raise will be difficult and eye watering for shareholders."
I agree it will take place before April 2021 as that would be cutting it very fine as far as WC is concerned. Andy has confirmed it will not be in 2020; as they expect more favourable conditions for doing so in Q1 2021. This sentiment is echoed in the annual results as follows:
"Whilst recognising the current challenging market conditions, the Directors expect conditions in the capital markets and the broader economy to improve later in 2020 and are confident we will find the necessary financial support to continue in operation."
The September 2019 interim report is now outdated as it does not factor in the aggressive annualised cost saving of $2.3m and more importantly the money saved from the termination of the Bulu PSC acquision in January. As per RNS:
"The consideration for the Bulu Acquisition, which will not now be paid by the Company, was to be satisfied through total payments, in tranches, of US$6.94 million in cash, together with an additional US$1.04 million in working capital adjustments to AWE Limited. In addition, the Company was to pay an additional US$4 million by way of the issue of new Coro ordinary shares to Hyoil (Bulu) Pte. Ltd.
With the Bulu Acquisition not proceeding, this consideration will no longer be paid, preserving Coro's cash balances to progress other areas of its portfolio, including the Duyung PSC, and removing the need to issue further new ordinary shares in relation to this transaction."
The latest information we have with regards to WC is from the recent final results:
"The Company is therefore now proactively implementing a material cost reduction exercise to position the Company for current circumstances. This will see a reduction of approximately $2.3 million of General and Administrative costs on an annualised basis, resulting in the Company having sufficient working capital to meet its requirements until April 2021, when the second annual coupon payment becomes due on Tranche A of the Company's EUR 22.5m 2022 Eurobond."
The RNS couldn't be any clearer. WC covered till next April and approved by NOMAD. Partridge are you saying that this information is inaccurate or false?
Just to be clear, Andy has just confirmed that the company has sufficient capital on hand to meet it's working capital obligations beyond 2020. This was in response to an explicit question requesting clarity whether we envisage a need to revisit the market to raise funds in 2020
You are going on old information from the interims. Since then the company has aggressively cut costs and exited Bulu PSC. In the annuals the going concern is signed off until June 2021 which is past April up until which the company has RNSd sufficient liquidity. Andy has been emphatically clear that they have no need to revisit the market prior to April in light of the above. Feel free to contact him yourself to confirm.
Communicated with Andrew Dennan who confirmed today as per the RNS statement below there is NO fund raise required before April 2021.
“As at 31 March 2020 the Company had unaudited cash balances of approximately $4.5 million. Despite this strong cash position, the Company considers it to be commercially prudent to significantly reduce its cost base given it is not possible to predict how long current difficult market conditions will last.
The Company is therefore now proactively implementing a material cost reduction exercise to position the Company for current circumstances. This will see a reduction of approximately $2.3 million of General and Administrative costs on an annualised basis, resulting in the Company having sufficient working capital to meet its requirements until April 2021, when the second annual coupon payment becomes due on Tranche A of the Company's EUR 22.5m 2022 Eurobond.
I had comms with Igor today. Finance is on track as expected and terms are non dilutory as others have stated here before. Obviously he couldn't state when they would update the market but my feeling is it is imminent. A few regulatory delays but we're almost there
STAR investment case is compelling. Once the company confirms their non-dilutive funding plans for growth the potential SP appreciation from a £4.5m mcap is huge. AAA blue chip clients who are aligned and a healthy sales pipeline of deals waiting to be converted as per recent RNSs tells us all we need to know.
- FY revenue $59.4m
- Positive EBITDA
- MCAP £2.1m
- Nominal share value 1p
- Good prospects for winning further orders
- In "friendly" negotiations with Ruyi Group
- Fully resourced to support its current activities
- Open market buyer holds 13%
2. During April 2019, the Company raised £637,500 ($829) thousand before expenses through a placing of 51,000,000 Ordinary Shares.
3. During June 2019, the Company granted its Chairman 880,000 new Ordinary Shares of no par value at a price of 1.25p per share in order to partially set off his credit balance.
4. The Group has accumulated operating losses over the past few years and is dependent on securing financing or infusion of capital. The Group is convinced that sufficient loan facilities are available to cover its cash flow requirements.