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Rider75

I agree with you on the shocking financial statements here

Zenith made a loss of about £40 million last year and it seems to have another £40 million of debt

Even if Zenith were to get an eventual award of about £50 million then it seems that most of the money would have to go on paying back the debt

I also think that Tunisia will just find their own financial “experts” to argue that the claim is only worth the same as the $300,000 cost of the assets or perhaps a little more

So I see no guarantee of even £50 million, and perhaps £1 million will be closer to the final award

Anyway, the financial statements here are quite shocking and the shares at 5p look like they are now very fully valued

I would not be very surprised to see them fall back to about 3p or less

“The amount claimed for the ICSID Arbitration, determined by a panel of international quantum experts appointed by the Company, is for a total principal amount of US$503 million”

So it seems that Zenith have simply appointed their own “experts” to come up with a very high figure of $500 million

This is about 1,700x their $300,000 original purchase price!

So what is to prevent Tunisia from appointing their own “experts” to come up with a figure of $1 million?

Can any of the rampers here explain any of this?

Zenith bought these assets in Tunisia in 2020 for $300,000

Then in December 2023 they make a claim against Tunisia for $85 million !

And now Zenith are claiming $500 million from Tunisia !

Can anyone explain how Zenith get from $300,000 to $85 million to $500 million in 4 years? !

Or are Zenith and their lawyers just picking these figures out of thin air?

So Zenith bought these assets in 2020 for $300,000?

Then in December 2023 they make a claim against Tunisia for $85 million? !

And now Zenith are claiming $500 million from Tunisia? !

Can anyone explain how they get from $300,000 to $85 million to $500 million in 4 years? !

Or are Zenith and their lawyers just picking these figures out of thin air?

2020

China National Petroleum Corporation (CNPC) has agreed to sell its equity in the Sidi El Kilani Concession to Zenith Energy for 300 000 USD. The sale includes the 22.5% equity in the North Kairouan permit which contains the Sidi El Kilani oil field and 25% shareholding in the field operator, Compagnie Tuniso-Koweito-Chinoise de Pétrole

2023

Zenith Energy Ltd shares jumped up on Wednesday after it announced a formal claim for USD85 million in damages from the Republic of Tunisia over a blocked acquisition

Some questions

1. Were the Tunisia assets bought for $300,000?

2. So how is the ICSID Arbitration claim for $500 million or about 1700x this amount!

3. Is there any prospect of actually winning this amount from Tunisia?

4. Is it not possible that Tunisia will just refuse to pay or only pay about $500,000 or the original cost?

Some questions

1. Were the Tunisia assets bought for $300,000?

2. So how is the ICSID Arbitration claim for $500 million or about 170x this amount!

3. Is there any prospect of actually winning this amount from Tunisia?

4. Is it not possible that Tunisia will just refuse to pay or only pay about $500,000 or the original cost?

The analysis done by David Turver on Substack is proof that Renewable Energy is vastly more expensive than oil and gas and that it is completely uneconomic without receiving the vast subsidies that cost UK taxpayers and UK industry billions of pounds in wasted expense every year.

Eventually the UK will have to face the economic reality of this huge Renewable Energy scam and return to the only available sources of energy that are economic and efficient. And that is hydrocarbons and nuclear.

If this economic reality is not faced, the UK economy will continue to stagnate and eventually collapse through excessive “green” energy costs and excessive taxation.

There is nothing to be gained from virtue signalling to the rest of the world about how “green” the UK is, if the economy is stagnating and eventually collapsing.

China and India and the rest of the world must be laughing as the UK intentionally destroys its own economy.

The analysis done by David Turver on Substack is proof that Renewable Energy is vastly more expensive than oil and gas and that it is completely uneconomic without receiving the vast subsidies that cost UK taxpayers and UK industry billions of pounds in wasted expense every year.

Eventually the UK will have to face the economic reality of this huge Renewable Energy scam and return to the only available sources of energy that are economic and efficient. And that is hydrocarbons and nuclear.

If this economic reality is not faced, the UK economy will continue to stagnate and eventually collapse through excessive “green” energy costs and excessive taxation.

There is nothing to be gained from virtue signalling to the rest of the world about how “green” the UK is, if the economy is stagnating and eventually collapsing.

China and India and the rest of the world must be laughing as the UK intentionally destroys its own economy.

The analysis done by David Turver on Substack is proof that Renewable Energy is vastly more expensive than oil and gas and that it is completely uneconomic without receiving the vast subsidies that cost UK taxpayers and UK industry billions of pounds in wasted expense every year.

Eventually the UK will have to face the economic reality of this huge Renewable Energy scam and return to the only available sources of energy that are economic and efficient. And that is hydrocarbons and nuclear.

If this economic reality is not faced, the UK economy will continue to stagnate and eventually collapse through excessive “green” energy costs and excessive taxation.

There is nothing to be gained from virtue signalling to the rest of the world about how “green” the UK is, if the economy is stagnating and eventually collapsing.

China and India and the rest of the world must be laughing as the UK intentionally destroys its own economy.

The analysis done by David Turver on Substack is proof that Renewable Energy is vastly more expensive than oil and gas and that it is completely uneconomic without receiving the vast subsidies that cost UK taxpayers and UK industry billions of pounds in wasted expense every year.

Eventually the UK will have to face the economic reality of this huge Renewable Energy scam and return to the only available sources of energy that are economic and efficient. And that is hydrocarbons and nuclear.

If this economic reality is not faced, the UK economy will continue to stagnate and eventually collapse through excessive “green” energy costs and excessive taxation.

There is nothing to be gained from virtue signalling to the rest of the world about how “green” the UK is, if the economy is stagnating and eventually collapsing.

China and India and the rest of the world must be laughing as the UK intentionally destroys its own economy.

The analysis done by David Turver on Substack is proof that Renewable Energy is vastly more expensive than oil and gas and that it is completely uneconomic without receiving the vast subsidies that cost UK taxpayers and UK industry billions of pounds in wasted expense every year.

Eventually the UK will have to face the economic reality of this huge Renewable Energy scam and return to the only available sources of energy that are economic and efficient. And that is hydrocarbons and nuclear.

If this economic reality is not faced, the UK economy will continue to stagnate and eventually collapse through excessive “green” energy costs and excessive taxation.

There is nothing to be gained from virtue signalling to the rest of the world about how “green” the UK is, if the economy is stagnating and eventually collapsing.

China and India and the rest of the world must be laughing as the UK intentionally destroys its own economy.

The analysis done by David Turver on Substack is proof that Renewable Energy is vastly more expensive than oil and gas and that it is completely uneconomic without receiving the vast subsidies that cost UK taxpayers and UK industry billions of pounds in wasted expense every year.

Eventually the UK will have to face the economic reality of this huge Renewable Energy scam and return to the only available sources of energy that are economic and efficient. And that is hydrocarbons and nuclear.

If this economic reality is not faced, the UK economy will continue to stagnate and eventually collapse through excessive “green” energy costs and excessive taxation.

There is nothing to be gained from virtue signalling to the rest of the world about how “green” the UK is, if the economy is stagnating and eventually collapsing.

China and India and the rest of the world must be laughing as the UK intentionally destroys its own economy.

Other recent broker views are also available :

Analysts at Berenberg raised their target price on financial services firm OSB Group from 750p to 800p stating that the group was "sustainably strong" and "unsustainably cheap".

Analysts at Shore Capital have the shares on a forecast p/e ratio of 5

"Our fair value currently stands at 745p. OSB is a high-quality specialist bank, in our view, benefitting from a structurally high return on equity and a strong capital base”

Market Screener has an average analyst consensus eps for CBG of 80p for 2026 and 90p for 2027

And an average analyst consensus dividend for CBG of 30p for 2026 and 45p for 2027

So CBG has an average forecast PE from analysts of only 4

And an average forecast dividend yield of over 12%

I think most investors here will be more likely to follow the consensus of various analysts and brokers rather than your own forecast

According to all of these valuation measures :

70% discount to a NAV of £11

forecast earnings per share of 90p and a PE of only 4

forecast dividend yield of over 12%

CBG shares are extremely undervalued

CBG has a NAV of £11 and is now trading at a price NAV ratio of only 0.3 and that is unsustainably cheap for a UK bank

Lloyds and NatWest for example have a price NAV ratio of 0.8

NAV here is £11 and that is why a return to about £7 or £8 is very likely within the next few months

Also a very good chance of a takeover here as CBG and OSB are about the only mid size banks left remaining in the UK

A takeover of CBG would probably need to be at about £10 and nearer to NAV

The fall in share price here is beginning to look a bit absurd now

The most likely estimates for the final FCA liability according to analysts and for the expected CBG share price :

0-£150 million FCA liability

40% probability

Expected share price £8+

150 - £300 million FCA liability

40% probability

Expected share price £7+

300 - £450 million FCA liability

15% probability

Expected share price £6+

450 - £600 million FCA liability

4% probability

Expected share price £5+

over £600 million FCA liability

1% probability

Expected share price £4+

So the current share price seems to be pricing in by far the most pessimistic outcome

I think the final liability will be about £150 million and so I would expect a share price of over £8 after the FCA gives their decision

The most likely estimates for the final FCA liability according to analysts and for the expected CBG share price :

0-£150 million FCA liability

40% probability

Expected share price £8+

150 - £300 million FCA liability

40% probability

Expected share price £7+

300 - £450 million FCA liability

15% probability

Expected share price £6+

450 - £600 million FCA liability

4% probability

Expected share price £5+

over £600 million FCA liability

1% probability

Expected share price £4+

So the current share price seems to be pricing in by far the most pessimistic outcome

I think the final liability will be about £150 million and so I would expect a share price of over £8 after the FCA gives their decision

If by far the most pessimistic forecast from analysts is £350 million, and the average forecast from analysts is £150 million, and the lowest is £50 million, then you have to assume that between £150 million and £200 million is the most likely

CBG have already taken steps to increase their capital by £400 million and so the liability has already been easily covered

The actual figure could also be even nearer to zero if Barclays win their case or if the FCA finds that there was not much fault

If that happens, or even if the average forecast of between £150 million and £200 million is correct, then the shares will very likely return to above the £8 that they were at before the enquiry

RBC is by far the most pessimistic broker about the possible motor liability for CBG and they have a Target Price for CBG shares of £6.20

So the upside for CBG shares is significant even according to the most pessimistic RBC forecast of a £350 million total liability

Most other brokers and analysts have a total liability for CBG of somewhere between £100 million and £200 million and CBG have already set aside far more than this by strengthening their capital by over £400 million

Remember the dividend that was not paid for 2024 saved £100 million for CBG and if CBG do the same again for 2025 then the £200 million saved can be expected to cover almost every liability that has been forecast by analysts

The shares have also already fallen by over £600 million since the FCA news and so many would say that the CBG share price has already fallen by about twice the most pessimistic forecast liability of £350 million from RBC

The early share price reaction to the good results on Thursday was to rise to £5.50 as the eps of 76p would suggest that a dividend of about 40p will be easily affordable in 2026 at the latest and perhaps also in 2025

The selling that then took the shares below £5 did not seem to have any rational reason behind it

The results were good and the outlook was good and the sale of CBAM for £200 million will also make the balance sheet even stronger going forward and CBAM was also not a very significant contribution to CBG profits anyway

So if even the most pessimistic broker RBC sees a significant upside of £6.20 for the CBG share price with a total motor liability of £350 million, then the lower and the average expected liability of somewhere between £100 million and £200 million will probably see a share price for CBG significantly higher than £6.20

Lloyds were about 10x the size of CBG in the motor market and Lloyds only made a provision of £250 million

So a provision of about £25 million would probably have been appropriate for CBG

They were also not required to show any provision according to the reporting rules and so that is probably why they have not shown any provision

CBG shares look extremely undervalued now at a Price/Book of only 0.5