Member Info for Maxi19

Mr_Nakhla what do you propose instead?

As expected, the delay was due to pushing the tax effects of the return into the next tax year. A reasonable thing to do but surely they could have communicated this might happen in advance?

Disappointing that only £33m is being distributed, particularly after the decent hedge.

Break even still expected for 2025. The closer we get to 2025 then the more likely it is that this will occur.

I get the feeling the board are really concerned about their bonuses under the LTIP. Doing a buyback will support the share price and give them a better shot at their 2024 and 2025 options vesting. Feels a bit grubby.

Neil, in the event you're wrong, I'd just like to thank you in advance for your great efforts to help collapse the share price and allow the multi-bag buying opportunity. And try not to cry by the way.

Bloomy, as much as NicName may well be right, if he's wrong then he doesn't need to be wrong by much to have missed a massive multibag opportunity. Probably shoiting himself at the thought.

The shares are suspended so there's no incentive for me to ramp. My judgment is often faulty and it's true that 95% of administrations don't provide a shareholder return so the odds are stacked against it here.

But I still struggle to see how the debts of the company are clearly higher than the value of its assets. If anyone can explain how patents projected to earn up to £20m in royalties over the next few years and a 49% stake in a company with EBITDA projections of £40m in a few years are worth next to nothing then I'm all ears.

RGhost, that example wasn't me saying Saietta has assets worth £100m, it was just an example.

Have you looked at the latest balance sheet for end of September? It doesn't show a mountain of debt. The company has no loans and no secured debt. It will need to pay outstanding creditors, accrued salaries and the costs of the administrator. After using its current cash and receivables and flogging off the plant and machinery and inventory I don't see how the net amount owed to creditors will be over £5-7m. They could well be significantly less.

So the question is, can the AFT IP, the Propel marine IP and the Saietta VNA 49% stake be sold for more than that amount? If they can't shareholders will lost everything. If they can shareholders will be in the money.

I personally don't know enough about the tech to know how much it can be sold for but I wouldn't bet that someone will pick it up for peanuts.

So that me

For those of you unable to even consider a possible shareholder on an administration, consider this hypothetical:

- I set up a company and use it to purchase a £100m diamond.

- the business is getting people to pay to see the diamond. The company rents a store for £1m/year, fits it out with expensive security devices and hires several staff.

- the entry price is £20, but not enough people buy tickets to cover the cost of the rent, salaries and insurance.

- the company goes into debt of £20m but the business is unviable. It runs out of working capital and goes into administration.

In that scenario, where the creditors are owed £20m but the diamond is worth £100m, would I, as shareholder of the company, get a return?

Neil, I don't think anything you've written here has engaged with the business fundamentals.

The administrator has to write a public report explaining what everything was sold for / what it was valued at, so there will be full transparency. So let's have your predictions on what the following will be sold for, either collectively or individually?

- the AFT IP

- the Propel IP

- the 49% stake in Saietta VNA

Or do you think they're all worthless?

What I suspect has happened is that potential buyers are interested in the AFT and other patents, the Saietta VNA stake and the Propel IP, maybe not one buyer interested in all of them but individually.

What they're probably not interested in is the UK operations, that is Silverstone and Sunderland, which on their own are hugely loss making. However, even though a buyer could have come in and shut all those operations down it would have generated very bad publicity and it's also possible the board, in order to support a takeover offer, would have wanted guarantees that the business would have been recapitalised.

Without Silverstone and Sunderland the business shouldn't have too much expenditure. If the Propel IP were sold for a decent amount it's even possible it could become a shell holding the AFT IP and the Saietta VNA stake.

FlyingHigher, I see where you're coming from but I don't think it quite works like that. Administrators have to value the assets and I don't think they can simply sell a company with an asset worth 1000 for 1 on the basis that the buyer assumes liabilities of 500. I think they would be obliged to sell the asset for 1000, settle the debts and shut down the enterprise. But to be honest I don't know that much about it.

In any case, LinkedIn suggests that most of the employees and directors have been made redundant. Which is very sad of course. So it seems that the administrators will try and sell the individual assets.

It feels grubby to be speculating about whether there's money to be made when people have lost their jobs so I may leave the posting for a while.

Saietta VNA for example is projected to have £42m EBITDA in FY 26/27. If you apply a modest 10x valuation then that would be a £420m valuation, so a £210m stake.

Obviously no-one is going to pay anything like that right now, but to think that the 49% is somehow worthless just doesn't make sense.

Neil, have you for one moment considered you might be wrong?

Have you even thought about how much the assets are worth and what they could be sold for?

I know I'm going to get it in the neck here, but that's my honest view.

I got it wrong on the entry into administration, which I said was "unlikely" to occur yesterday. So I am very aware that my judgment can go awry.

However, I spent yesterday researching IP valuation and I can't see how the AFT IP can realistically be valued at less than £10m. I realize that if there's a fire sale then the administrators may have to accept whatever price is offered to them. However, there are plenty of sophisticated IP players, including patent troll companies that can calculate the revenue potential from the ConMet and Saietta VNA licenses and make an appropriate offer.

Then there's the Propel IP which was described as "highly valuable" in the latest accounts.

There's also the Saietta VNA 49% stake. Saietta VNA is basically expected to be profitable from the next financial year. Often JV agreements include a put option whereby one party can force the other party to buy their stake (typically with a 15-25% discount to the fair market value). So there could well be decent value there.

This isn't a typical administration where creditors are chasing the company and there's massive debt. The company's run out of cash and doesn't have enough time to sort things out. However, that doesn't mean it doesn't have very valuable assets that are worth more than the debts.

So that UK retail investors get the benefit of paying any tax in January 2026 rather than January 2025.

Perhaps they haven't said as much because it may not be the best optics for the company to be so focused on tax planning. So they may explain it away by saying the decision making took time.

I think it's fair enough to wait so long, although (1) surely the comms could have been better, and (2) a lot of people won't actually pay tax, either because their shares are in an ISA or their cost base means they won't have a capital gain. That said, the directors' definitely will have to pay some tax, so perhaps it's a personal incentive.

It's amazing how everyone has simply assumed that shareholders have lost everything here.

Of course, going into admin is never a good thing and I was disappointed by this morning's RNS.

However, I bought in last week on the belief that there might be a takeover, and if not there would be a good chance of a return from the administration.

Firstly, it's still possible that there will be a share sale. Companies that go into administration can still be sold as a company. Saietta isn't insolvent yet so if the administrators receive a suitable offer they can accept it.

Second, the business and assets of all or part of the group can be sold.

Third, all lines of business can be discontinued (apart from the JV) and everyone made redundant, and a sale of the remaining assets takes place.

All three of those outcomes could return value to shareholders. It's impossible to know how much the IP is worth, but if a party offered £5m plus for it you are quite possibly looking at a return to shareholders. I'm definitely not saying that it's worth that amount, but I definitely wouldn't bet against it let's put it that way.

So I advise everyone to wait for the eventual outcome here as it's not a company saddled with debt and creditors and until we know how much its assets are really worth it's impossible to know how this will end.

Bloomy, I don't think it's a given that there will be a 7am RNS tomorrow. Good chance there is, but if they've made good progress and are near to announcing a firm offer for a takeover or new financing then I reckon they'll stay silent as they only said they've update the market in due course.

In that event, I'd take it as a positive sign that they're making progress.

Of course, there's also a reasonable chance that they'll announce an intention to appoint administrators.

Davey, it's not that complicated:

1. The business appears to be viable. If the company's forecasts are to be believed, there is a clear route to quite significant profitability. The problem is it has run of cash before getting there. The kind of businesses that go into admin more generally are those which are unviable - i.e. there's no clear route to profitability.

2. Even if the company goes into administration , the assets could well be worth more than the liabilities. The only creditors are trade creditors. The company has (1) a small amount of cash (2) trade receivables (3) inventory (4) patented IP, some of which is licensed to ConMet and projected to bring in $20m over the next 6 years (5) plant and machinery and (6) a 49% stake in Saietta VNA. Without knowing all the details I'd say there's a decent chance those could be sold for more than the debts.

I think with these RNSs you have to remember that the sellers are sitting on enormous losses even if the company does end up being sold for e.g. 5p a share. If you're faced with selling out at a 99% loss or holding on and potentially realizing a 95% loss or realizing a 100% and having to explain to clients why they have a stake in shares in a company in administration then I don't think it's a hard choice.

EY will set a timetable for these things. For example, indicative proposals to be received by Thursday midday. Then the company weeds out the worst ones and enters into discussions with the good ones. The key for a takeover is to get a binding offer. Most bidders are unlikely to give a binding offer unless they know it'll be supported by the board.

Latino, not necessarily. There's basically no difference between an RNS on Friday pm and an RNS on Monday morning. If they haven't made progress then they could release an admin RNS on Monday.

That said, I do think it's positive that we've seen no RNS now. If they know the game's up they'd likely know it by now. Not sure what difference a few extra hours on Friday afternoon would make.