Member Info for MontiBurns

Interesting read, possibly explains why things are held up in Georgia regarding FRC’s request to renew the PSA. While it does not specifically mention FRR, the reference made to ‘oligarchs’ in respect of Georgia-US relations is pretty easy to work out. Here is the snippet from the article but I do recommend everyone have a full read:

‘….Kobakhidze also said the State Department was “not to blame for the recent sanctions” and emphasised the influence of “oligarchic forces over official institutions” as the primary cause of the measures.

Formally, this statement was issued by the US State Department, which is very sad for us, because we have to answer to the State Department in this case. However, we want to emphasise that the State Department is not the cause of the issue; rather, it is the oligarchic forces that have a significant influence on formal institutions in the US. Therefore, our criticism is not directed at the US, but at the oligarchic influences”, he said.’

My guess is that SN has been filling his boots with more shares in lieu of funding the litigation cases over the past 5 years or converted his salary in to shares (he was on the book up until liquidation point). That is the most plausible explanation as no law firm (or vendor) would accept shares for services rendered for a company that is delisted. The other other person could be Linsemayer, working as the consultant. It’s all supposition at this stage but the fact someone (outside the company) would want to take shares is a perplexing conundrum and one not easy to unravel. As far as informing the shareholders of new shares issued, then yes, ordinarily this is a material reporting item for LSE registered companies. However as mentioned earlier, the increased share headroom was approved many years ago and around 1.7bn was still available.

Now, while long term shareholders continue to suffer because of the lack of information, it is high time that SN steps outside of the shadows, where he thinks he is away from the shareholders view, and accepts his substantial share of responsibility for the failings of FRR and his appointed management team. We need him to crawl out of whichever rock he is hiding and give us a small update, that is not an unreasonable expectation. Ideally, he should have done this prior to liquidation process while he could still do as an officer of the company. But now, he can hide behind the liquidation process by saying he is restricted from saying anything. And Rodders fk’d it up for us by reporting a company message to Deloitte.

Anyway, we know SN wants to return the company to pre-liquidation status but that whole proposal hangs on the GG renewing the PSA. What’s holding things up there? How about FRR repaying the arbitrations costs, pay any outstanding wages and show GG that your pockets are full of cash to restart drilling campaign at Taribani. We know he doesn’t have the funds to repay the arbitration costs of c.$5m but he is probably trying it to offset this against the cost recovery pool, and perhaps this is where we have an impasse.

Tabs - my suggestion that SN would be cautious on dilution was caveated by a limited number of shares available so not the solution. And if dilution was an option, this would have been accessed prior to the appointment of liquidators (imo). Also SN has self interest at heart for not going down the route of dilution as he is c.11% shareholder. Having said all that, I would not completely rule out debt-for-equity exchange but that will require shareholder approval. Equally, Deloitte could work with creditors directly to bring the company out of liquidation but that will require new management and new money, especially as the PSA is expired; I can’t see the GG wanting to work with money-men creditors but any thing is possible when you grease enough hands. As far SN being a proud man, well that is in the dirt given his monumental failure with FRR and appointment the right people in the executive management team. But is there still time for redemption for him? Only time will tell…….

Anyway, our first priority is getting the PSA renewed, perhaps thn the pieces will start to fall in their place.

Firstly, I don’t understand YJ’s continued perusal against FRC when the company is in liquidation and the amount speed was around £65k. But I do think it will be kicked out by the Judge when it comes to the hearing. Why? From what I recall when dealing with companies in Administration, as soon as the liquidator is appointed, all legal actions from creditors cease, and creditors work with the Administrator in terms of registering their owed amount and their security/collateral. The Receiver then works on behalf of all creditors. Perhaps YJ has appointed a lawyer on a ‘no win, no pay’ basis.

As far as dilution is concerned, I think SN is cautious on going down this route. Firstly (as I recall), the authorized issued capital only allows for the issuance of another 1.7bn ordinary shares which is not enough to cover all creditors. And secondly, SN whole proposal (imo) is based on restructuring existing debt and making scheduled repayments, which will be based on the proven oil reserves and drilling techniques at the Tariban Field. I think this is why he chose to go down the ‘engineered liquidation’ process to get Deloitte to mediate an acceptable repayment plan with the creditors. I also remember seeing a brokers report from WH Ireland that valued Taribani oil from two zones (excluding gas) at $475m.

The questions we have right now Re: 1) has SN secured the funding to restart at Taribani, 2) has the Georgian Givt agreed to extend Taribani PSA and 3) are Creditors agreeable to SN’s proposed repayment plan?

If any one has any answers or thoughts on my questions, would love to hear them.

Thanks for the clarification Looed, but I do recall a corporate g’tee, perhaps from FRCC, which was the intermediate holdco of FEGL, underpinning FIC’s financial obligations. SN being the ever-astute person, thought that he could probably dissolve FRCC if worse came to worse, without hindering FEGL’s operations in Georgia. Anyway, it matters not now as the whole group is in liquidation and the expired PSA was shifted from FEGL to FRUS as FIC Administrators took control.

Looed, agree that this case is drag on the FRC situation both in terms of SN’s time and money (for self representation in this Looed). I also recall that apart from the Personal G’tees there was also Corporate/Parent G’tee from FRR PLC/FRC but not entirely sure. However with FRC in liquidation, the low hanging fruit for recovery is definitely by going after SN in Texas. I guess, this is something that should not be overlooked so easily as SN and ZM were totally committed to making FRR a success at that time that they staked their personal wealth and reputation on the line to rollover the CLNs and accede to Hope’s demands. So, one has to wonder why they did this if the operational prospect looked bleak in Georgia? Perhaps the answer can be found at the Georgian Dream Party’s doorstep; they made it hell for the company which was capped off by taking an American company to the Arbitraion Tribunal despite investing over 20-yrs and nearly half of billion dollars to progress Georgia’s O&G industry. I can understand why SN feels so aggrieved for the treatment he and FRR has received over the past 10-yrs. Then he was back-stabbed by another Georgian, who he groomed for succession at the company.

Anyway, the point I wanted to make on the FIC situation is that the case rumbles on after 5-yrs is because Hope continues to personally fund the liquidation proceedings because he believes that he can recover a lot more than he originally purchased the CLNs at. Plus, he can claw back all of Griffin’s liquidation costs from the recovery as the claim on SN’s PG will include the Liquidators costs. Perhaps this is why SN put FRC in to an engineered liquidation because it has now come to a point of ’all or nothing’ for the both protagonists.

The only reason why the case should not be closed (after 5 long years of trying, as well as noting [apparently] Hope/OMF have fallen on hard times), is because Griffin et al sees strong recovery from calling up on SN’s personal G’tee which is securing the corporate loan notes (ZM’s PG is there too and both were issued on Joint&Several basis but I guess ZM is probably out of reach in terms of judiciary and quick recovery). Also, most here will recall that Hope/OMF acquired these CLNs at highly distressed value (perhaps 20cents to the $) so even if Hope gets a partial recovery from his current ‘par value’, he is still going to come out of this pretty well, hence the legal struggle continues.

Anyway, the fact the Liquidators are still trying to flog this dead horse, may be a sign that the horse may not be clinically dead, as we are lead to believe. And on a somber thought, even if there is a road back for FRR, what value will the long, miserable suffering shareholders have? That’s a moral question for SN.

Rodders, plz excuse me if I put on my rose tainted glasses on for a few minutes: The fact the liquidation appears to be ‘suspended in motion’ ie no material update to report since the first creditor report can also be perceived a positive rather than a negative. Really!? I hear you ask. Sure, the fact FRC continues to hang in there despite no financial resources is difficult to understand as any other company in our situation would be going through the motions of being expunged from the legal and regulatory registrars. Further, if SN was such an unscrupulous fella, don’t you think Deloitte (as the Court appointed Administrator) would have thrown the in the towel by now rather than getting strung along by him for this long? I think yes, unless SN is again pulling the levers of the US Political establishment to stave off Deloitte desires to close this FRC saga?

So, Monti how do you explain all this, I hear you say? To me, SN is only going to fund FRC if GG agree to extend the PSA, which is still pending as far as I know. No point in chucking in money until then. So, I think SN has a plan to get FRR producing again quickly, and this could be from arranged funding to a JV. Deloitte know this, and the Creditors know this and therefore all are patiently waiting to hear back from GG.

This is the only plausible logic I can come up with under these circumstances. There is no G’tee that the PSA will be extended as the cost from Arbitration is also unpaid, but perhaps the US Political machine is helping to overcome this issue somehow.

Anyone got spare $5m to pay the GG so we can all move forward?

Again…’no one is wrong, just somebody is right’. Keep posting logical thoughts and share info with your fellow FRR shareholders.

Do you remember the Company announcement after the forced delisting in Dec 2018, that the company would continue to communicate with its Shareholders through the RNS-Reach service? Well, we are over 5-years after that announcement and we have not been directly addressed by SN (being the Chairman of FRR). Sure, you could argue that (post the delisting event), a large can of worms was open with ZM, Hope and YA……and then what followed was an host of litigations. Then there was the constant lying about the Arbitration decision and ultimately losing the Block. Infact I struggle to think of examples when FRR-team has not twisted facts to present a highly inaccurate position to its members. So, now, we are over 7-months in to an ‘engineered’ liquidation, thinking there was a master plan to reschedule creditor payments but that also looks a difficult ask unless the GG can renew the PSA. We should also be told about Moldova PSA, as there seems to be some speculation that this may have been rescinded.

I think we have been patient but a few kind words from the Chairman may go a long way to restoring our confidence in him and the company.

Thanks Looed /Lifeishard. Confirmation that the unopposed motion to kick the FIC case down the road by another 15 months is ratified by the Court and therefore appreciative (as the alternative would be a disaster). As Looed alluded, this allows SN and team some more time to try and put the wheels back on the FRC broken car, which is on the road side the moment awaiting road side rescue service, which would be in the form of GG, for agreeing to the extension of the PSA.

So, putting ourselves in GG’s shoes, what could be the hold-up? The non-payment of legal cost owed to GG from losing the arbitration case? This was c.$5m. The other could be evidencing of financing to invest in the Block20 (whatever size is left). The third could be to regularize the company status to normal from liquidation.

It could be all three things but to me, the main one is the outstanding legal costs. If, FRC does not have the funds, GG would have to agree to a payment plan, which due to FRR’s history would be a tough ask for GG. Perhaps this were most of the discussions are taking place. Of course, there is also politics from the fallout of the Ukraine war, with Georgia being the 2nd most dangerous country perceived by Russia noting Georgia aspirations to join NATO and EU.

Final note, read Looed’s post a few days confirming that all cases between Hope and SN were closed/cancelled/expunged etc. Not sure if that is entirely true as personal guarantees issued by SN and ZM continued to be pursued by the FIC Administrator in the Texas Courts for Loan Notes issued to OMF, ultimate benefactor being Hope. But the point being, the legal battle between the two protagonists remains active, albeit concentrated on the FIC case and through corporate entity.

Anyway, just some thoughts. And remember, ‘no body is wrong, just somebody is right’, so let’s Keep the board open and alive.

The FIC case successfully kicked down the road to 2025 and thus buying SN some more breathing time to resurrect FRR. What’s next? How about some update on the status of the Liquidation process. But what comes first, news on the liquidation or the request to extend the PSA from the GG. I still think the PSA news will be the decider on whether FRR stays or folds. But there also the creditors and their agreement to sign off SN’s proposal (whatever that this). The fact they are also obediently, patiently waiting is also good sign. Perhaps SN has said to them that they will get the full 100% of amount owed pending the outcome of the extension request. I don’t know. All I know is that the silence on the Liquidation process is deafening after 4-months since the first Creditor meeting was held. May be it time for Rodders to speak his insider mates at Deloitte?

Again, trying to read between the lines on the unopposed motion to reschedule this trial to 2025 is difficult to workout in terms of where this is ultimately heading. The old adage of flogging a dead horse comes to mind ie why continue to fund and prolong legal cases when seemingly there is no viable financial result in sight? Then you have to consider why Hope (via the liquidator Griffin) gave the nod for the new trial date, while at the same time, they mutually agreed to cancel the fiduciary case last year, so clearly they are talking and…….co-

Sure, you could argue that these are two separate legal entities and cases but ultimately, it’s the same stakeholders and decision makers. After 5-long years of banging your head against the proverbial legal wall, why not just throw in the towel? One answer could be that SN has a shed load of money so his PG is worth pursuing. The other reason could be to publically degrade him given the games they have played with creditors over the years.

Would love to say to SN ‘penny for your thoughts’.

That takes me on to the Liquidation of FRC and the PSA extension request to the GG. Are these two events connected? I would say yes. No extension granted, then no more FRC. But why is it taking so long? Unfortunately East-West politics. I am sure SN is working his political network to bear some pressure to the GG but given the recent enactment of the Foreign Agent Bill combined with the circus that is going on with respect to the Presidential race, I am not sure how much success will be achieved.

So there you have it, some Sunday morning thoughts from ‘Burning Monti’.

Well plaster, the answer is unequivocally no. It is no way that Actors (like Hope, YA and even a tiddler like Yellow Jersey) would continue investing time and money in pursuing FRR unless they see a way back for FRR or, alternatively they think they can squeeze SN balls enough for him to personally cough up. Whatever the case, this investment has had more twists than a good Agatha Christie’s ‘who dunnit’ novel.

Worth also considering that a legal closure (ie completion of the liquidation process) also enables these creditors/companies to tax deduct written off debt, providing they have healthy profits to do so. For someone like YA, it’s a no brainer given their size but accepting this can be seen as ‘bad for business’ given their reputation as being a ‘corporate loan shark’.

On the potential financing facility in place, this needs to be taken with a pinch of salt, as these types of intimation offer letters have a shelf live of a few months only.

Finally, given FRC’s financial condition, surprised that this is still ongoing meaning that SN has most probably put his hand in his pocket to finance until (at least) GG reverts on the PSA extension request.

On a wider note, been looking at Georgia and Ukraine with respect to Russia and their aspirations of joining NATO, which was openly declared a red line for Russia when the CIS started to disintegrate. Perhaps this explains the creation of Dream Party in 2012 and post the 2008 war, and covertly working with the Kremlin to keep Georgia onside. Georgian Politicians can also be considered as top-notch hoodwinkers of projecting pro-West intents to their people, to the US and to the EU but all along working with the Russians and taking their directives/blessings. This behavior also reminds me how ZM was managing FRR shareholders and the BoD, while all along, he was trying to take the company away from under our noses.

Thank you for sharing your thoughts Looed. Yes, agreed that we are now only likely to get news from Deloitte once the final outcome has been reached. So, on that, one has to wonder that after all this time (3 months since the first creditor meeting was held), what is the hold up especially as FRC does not have any assets or cash to repay the creditors. But voting down any proposal from SN will result in zero recovery for creditors. On the other hand, no creditor will agree to a massive haircut if they feel that SN is not being fair. Perhaps discussions are ongoing but crystallization of the deal is subject to renewing the PSA, which in turn is subject to availing the bank facility that is apparently is in place.

So, from this development we can deduce that there is no asset or value in FIC, hence the liquidators are pressing ahead with the call up on the personal guarantees that were given by SN and ZM back in 2018 when Hope agreed to restructure the interest and debt. They (Griffin & Hope) must be under the impression that SN has the wedge to repay $30M+ in debt. Or it’s got extremely personal between Hope and former FRR Directors, in that he would rather see these guys declared bankrupt than to move on (given it would cost him more money in legal costs).

Definitely more complication to an already complex situation and testing of our patience further.

The more pertinent question is whether this will affect the liquidation case re FRC? I think it could depending on the fragility of SN’s state of mind and his motivation levels. Having said that, he has already agreed to punt this case to 2025, so no immediate squeeze and may be he thinks he can untangle FRC in this time to get production up and running again to agree a repayment plan with Hope.

By the way, WHamboy is long, sincere shareholder of FRR, as is Looed, who efforts will always be appreciated, whatever the outcome here.

I never know if the sudden appearance of the trolls like saucysausage is a good signal or not, especially when you consider that this company has been delisted since December 2018 and no official news for many moons. Surely these guys have been paid out for their shorts so why linger around like a bad smell? Bid it to gloat or for self gratification?

Anyway, good to know Looed is still checking and his coded message did lift my spirits but also maybe explains the appearance of this troll.

Hope Looed can provide a bit more of reference point so that we can do some research too.

I recall reading something on FIC insolvency and a meeting set for July. Conjecture on my part, but could news relating to FRC be delayed until after this meeting thsi concluded? For some reason, time limitation comes to mind. Nevertheless, if our news is unconnected to the FIC insolvency proceedings, then the delay could well be on hearing back from the Georgian Govt regarding the extension of the PSA. Anyway, keeping everything crossed for some favorable news soon.

Really important and valuable input Looed, so thank you for taking the time to do this for us all. I particularly found some of SN sworn testimony hugely significant and perhaps should re-instill some confidence in us that SN remains hugely committed to this project (we know he sits on the Liquidation Committee and therefore will have a material input on the way forward). On the foreign agent law, this brings a sharp focus on the political challenges FRC has been facing since 2012 when the Dream Party (DP) came to power. There is no more hoodwinking from the DP as talk of EU aspirations was just a public lip service to their population to keep the, appeased. Let’s hope that at the next general election, the pro-European parties can get their act together so that they can deliver on their constituents demands of closer co-operation and integration with Europe.