The latest Investing Matters Podcast episode featuring financial educator and author Jared Dillian has been released. Listen here.
Charting targets from a more well known chartist.
https://m.youtube.com/watch?v=eAtwCbbgDio
28 March RNS
“The Hilco Facility is to be extended by six months to 7 February 2025 and will see an additional £10m made available immediately and a further £10m available for the working capital peak between September and November, subject to the approval and implementation of cost saving measures. “
GR only placed just under 1/4 of the available 4.5b shares. Perhaps this is a good sign he wanted to limit the damage to the sp raising only what’s needed at this low sp. For the next placing lets hope GR expects the sp to be much higher.
“If that’s the case, JD will be the only holder voting that through.”
Perhaps he was hoping the shareholders would be distressed enough to accept and vote for a lower buyout offer for going private?
You’re right though I still can’t see how this would bypass the BOD wouldn’t they still have to recommend such a motion to shareholders just as they would have to recommend an offer?
Just speculation and reading between the lines on my part.
I think JD released that awful RNS to deliberately knock the sp down in the hope of panic-forcing remaining share holders to accept a lower offer from him either via an official offer or as a buy-out due to going private.
Maybe out of frustration/desperation that his lowball offer was rejected. If he did make a lowball offer shame the BOD didn’t state the figure in the rns.
Perhaps this too was by design because if a figure was published it probably would have kept the sp floating at that offer level, which was not the desired outcome.
There’s no raise on its own on the cards in my opinion because the company already have a £20m facility not all used up yet. A raise at this mcap would be peanuts and not achieve anything.
The raise at 5p is not for cash, but for JD to get hold of 51% of the company and full control before taking it private. The two items were conditional, JD underwrites equity raise (ie he picks them all up) upon the condition that company delists.
I expect such a motion would require a EGM and a special resolution to be voted through which usually means 75% voting for. So I don’t expect a raise out of the blue, but a EGM announcement if board is happy to recommend such a motion.
Just my opinion, could be wrong of course.
Fft fair enough. I still think it fairly unlikely it will go into admin tomorrow or next week. In 3 months time very likely.
The BOD would look very foolish if just one week after securing a £20m loan facility for a turn around plan they turn around and say nah, lets just go into admin tomorrow.
But anything is possible.
“So, instead of the usual 30-60 days credit, SDRY will now not be getting any new stock unless cash is paid”
And they have access to cash, £20million of it, extended to 2025 (although its not going to last anywhere near that long).
So explain again your reasoning why a lender would extend and increase the loan facility to a company apparently about to go into administration tomorrow?
“ not let it go into admin ?”
Maybe because JD already had trouble finding the cash even for a lowball offer.
Next or a similar giant would easily outbid him out of admin (if anybody wants it that is, lol)
Taverham I think it would have to be a special resolution at a EGM, as it is hand in hand part of an equity raise fully underwritten by him waiving first offer rights to shareholders (I forgot the technical name).
In other companies O have seen this requires a 75% vote for the motion. I could be wrong.
The impatience of retail is unmatched!
It has only been 2 trading days since those nasty RNSs and already most are calling for company to suspend trading and go into admin tomorrow!
Lol!
It only just got a £20m loan facility only £10m of which is planned to be used so far.
It may well go into admin but probably a few months down the line. Patience! :)
True anything could happen tomorrow and there is risk of getting trapped on a permanent downhill slope, but there may also be opportunities to get out at a better price than today or yesterday.
Its a risk and everyone needs to assess their own risk they are willing to take. There’s a risk in selling now, theres a risk in holding, etc etc.
Taverham thanks for that info, that is very worrying.
In this case though I would have though the buy out would have to be made very clear for shareholders to vote for it at a EGM? Normally this kind of resolution requires 75% to pass. I doubt shareholders would vote for if it is in any way unclear value wise or time wise.
If Dunkerton does go for the equity raise as per rns we might be ok (ish). I assume de-list means he takes it private and has to but us out. Otherwise it makes no sense for retail shareholders to hold stock in a delisted company which they can’t trade.
He doesn’t want to make an offer, he wants to get it for dirt cheap. My guess is:
1) underwrite 63m new shares to control 51% & take it private (at 5p that will only cost him 3m, get investors to buy out remaining shareholders)
2) buy it out if admin