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Daryl, I agree with your comments. The only thing I will add is that the BoD didn't want any shareholder input or representation when it came to the new Scheme. Our views were not welcome, and we weren't even consulted until after SOA2 had been constructed, which you say is hugely in favour of creditors and "new investors". It was clear that existing shareholders, especially retail shareholders as JPM/Bybrook sold out at this stage, didn't matter to the BoD.
Jimmyg56,
Lol you're not even a shareholder so not sure why you're even on this bb, or why you're concerned about retail shareholders all of a sudden.
However I am a shareholder and can apportion the blame where I want, with reason, which is what I'm doing. If I think the Board are failing then as a shareholder, I'm allowed to vote them out if there's enough support from other shareholders. I'm not saying this is the intention, just advising you what my rights are.
Shareholders can use whatever legal means they can to address issues and change the strategy if they wish to. We are owners of the company and the BoD work on our behald to look after our interests.
Anyway, its probably best to filter you now as I have no appetitie to go back and forth with you.
It's really sad seeing people bail out at huge losses. I don't think the Amigo BoD will pursue the wind-down option because they advised they're looking at other options last week including SOA3 but the uncertainty around the raise is troubling nevertheless.
Maybe they're just looking at other options to show to us that they've explored all ideas and looked at all avenues as a box ticking exercise. We may never know their true intentions but trust in this BoD has pretty much evaporated.
If we're going to apportion blame fairly then one thing is for certain, it was the Amigo BoD who got us in this mess and it's the Amigo BoD who are the only stakeholder to be benefitting from this situation. They've achieved nothing for shareholders apart from create uncertainty since the Scheme was sanctioned. The share price is substantially lower now than it was going into the high court hearing, which none of us could've imagined 12 months ago.
ASAG had a meeting with the BoD in Bournemouth and most of the issues we're facing today were highlighted in detail to them by my associate. We spent the whole afternoon discussing the flaws in the Scheme but the Board failed to act on them, and we were forced to make a submission to the high court.
An EGM needs to be called ASAP. We need to put forward credible resolutions to clear the uncertainty we're currently facing then create a route to take us out of this hole we find ourselves in. If anyone has any other ideas then feel free to advise.
I’ve just worked out the cost of the equity raise per share held. You’re insinuating the chart calculates the share price vs market cap, which is incorrect. We have all the information we need to calculate the cost per share held, which is what I’ve done to help those who want to work out the cost to them.
This chart may be helpful if you need help calculating how much the equity raise will cost you if you're planning on taking up your full entitlement.
https://twitter.com/AIMissionary/status/1634307454166093824?s=20
Another factor needs to be considered for the doom and gloom updates. It's possible that the Board are trying to force the FCA into relaxing lending criteria to make investment more palatable for underwriters but I would doubt this is the case because of the point I made earlier.
"The current market cap is £10m, the Scheme creditors require £15m so the cost to acquire the company is £25m plus goodwill. Why would any new investor want to underwrite £45m when they probably feel they can take the whole company for this cost?"
It's possible that they're seeking to get lending criteria amended then they disclose the only two options available to shareholders (1) lowball takeover (2) wind down.
Novice82, a new Scheme is allowed at the Judge's discretion. This is the reason why we have 2 court hearings, the first hearing is to decide if there's merit in a new Scheme and the second to sanction it. It can be argued that there have been some material changes since SOA2 was sanctioned and there could also be changes to the Board by the time SOA3 reaches court.
ASAG hasn't really engaged with the Board since the sanction hearing but the time is right to initiate dialogue again.
Once the Scheme got sanctioned in May 2022, the BoD's fiduciary duty switched from creditors to shareholders but they've failed to protect shareholder interest so far. The current uncertainty has been created by the Board's failures IMO.
A lowball takeover is a concern that needs to be addressed and there's also concerns that the Board are facilitating the transfer of shares to those who will vote in favour of the equity raise when the EGM is called, by creating a negative outlook that has been evident for some time. The Board are either (1) genuinely struggling to attract underwriters or (2) they will leave it to the last minute to advise they've found funders to underwrite £45m.
Legal opinion is being sought right now and calling an EGM is a possibility. The following resolutions would send a strong message to the Board and clear some uncertainty for shareholders:
(1) Cap the equity raise to £XXm
(2) Remove the threat of the wind-down scheme
(3) Remove the Chairman from his position
The £15m (plus £97m in the bank and any additional excess cash) is legally payable to Scheme Creditors as it was sanctioned in the High Court. The FCA doesn't have the power to change this. I don't think Amigo have the option to defer the £15m payment. If they can't make the payment by May then they will have to initiate a new scheme or pursue the wind-down option. The 19 new shares for 1 held is also legally binding. What is not legally binding is the amount of funds required in addition to the £15m needed for creditors therefore Amigo can raise anywhere between £15m to £45m.
I agree. The BoD can’t get away with the wind-down option because the creditors will get shafted. Any negative outcome for creditors and the regulator will get heavy handed.
ASAG tried to get the wind-down option removed but the BoD refused at the time but they're now exploring other options including SOA3. This is exactly what we were saying, if you fail at the SOA then you have the option to pursue another Scheme or step aside and let a new Board explore options rather than threatening to wind the company down.
The idea that the Board are facilitating a lowball takeover has merit due to the situation we find ourselves in and I will be contacting the Board with my concerns ASAP.
The current market cap is £10m, the Scheme creditors require £15m so the cost to acquire the company is £25m plus goodwill. Why would any new investor want to underwrite £45m when they probably feel they can take the whole company for this cost?
In response to the other poster, it seems wind-down is off the table because the Board are exploring the idea of a new Scheme. They will keep the funds set aside for the creditors for the time being if they go ahead with SOA3, which is more than enough to keep the lights on.
I feel today's update is positive for private investors.
"Amigo is exploring" other options but there's still some time to reach the minimum threshold required to conduct the raise.
The Board will probably be in a position to conduct an equity raise of between £15m to £45m eventually, but most likely at the lower end.
This means it'll be more palatable for PI's to take up their rights.
SOA2 hasn't failed yet but seems the wind-down option is off the table.
Nice to see the bb coming to life. A few interesting comments have been made but it may be helpful for some to read the high court judgment again.
https://www.bailii.org/ew/cases/EWHC/Ch/2022/1318.html
I'd say the following few weeks is a crucial period for shareholders, and we need to be prepared for any eventuality.
jemgeee, your response doesn't answer my question. It's clear that AM is not exploring the other funding options because he's relying on the jv. If he thinks the jv is unlikely to proceed then he has the other options to fall back on. Simple.
jemgeee, blackstout has just explained the several options that AM has when it comes to raising cash so don't quite understand your comment about ''the possibility of shareholders being wiped out''. Why would shareholders be wiped out before these options are explored fully?
It's a bit quiet here but wanted to ask what BOO holders thought about the company building a large equity position in REVB?
Excellent post again blackstout. As you say, AM has several options up his sleeve when it comes to raising cash if he needs to. It's shocking to see the SP being manipulated due to posters creating uncertainty though. Maybe its positive that shares are being taken away from paper hands but they're going to traders who will sell for a quick buck anyway. The quicker jv / funding is sorted, the better it would be for investor sentiment to improve.
A few were getting over excited after I suggested the BTC price will drop in the near term but it seems I was right. BTC has lost $900 in value and ARB is down by 12% since I posted a few days ago. Unfortunately this wasn't the big shake that I was predicting before we move into the bull run.
The tightening of crypto regulation is a good thing in the long run but it will be done to restrict people investing in the likes of BTC. UK banks are already restricting payments to centralised platforms like Binance, and this will get worse with new regulation.
People who believe in BTC, do so because its decentralised therefore no one can manipulate it. Any tightening of regulation would attempt to stop people owning BTC and other crypto assets directly. People will have to purchase via FCA registered centralised entities who will hold the assets on their behalf, similar to brokers we use when buying stocks and shares currently.
Although tighter regulations will spook crypto markets in the short term, leading to a dump, this is good news for the price of BTC in the future as larger institutions will be able to hold crypto assets legally. Centralised exchanges / Funds will hold more crypro assets as well because investment will become mainstream. This change will add $billions to the crypto market, especially stable coins.
These changes will have a positive impact on miners like ARB in the longer-term.
There are concerns about the short term cash flow needed to keep the company afloat but these are overexaggerated in my opinion.
If desperate, AM could consider the sale and lease-back of the pipework currently under COPL’s ownership. This was referred to in the Tennison appraisal as having a value of about $10m.
I know AM has been in contact with some contributors to the bb. If someone can ask him the following question, it would provide some reassurance:
If needed in the short term, is the option of a sale and lease-back of the pipework available to COPL? If so, how quickly would you be able release funds?
The response may also give clues about the progress being made in jv talks.