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Likely backs to the wall, stringent working capital management, delaying/reducing opex items, ie. remuneration of directors and marketing expenditure.
No news to suggest INL have appointed adminstrators yet.
I was involved in a similar company a few years ago, which was at a similiar point to this. It managed to get a placing done and has >10 bagged from the distressed price it was at. It went on to cashflow break even and continue to further grow revenues expotentially.
Big difference here, is that it has this ugly death spiral finance around its neck... if they can refinance that and get some fresh capital, they can pull off a miracle but I really feel there's a shafting in place for PI.
Someone threw a cool 20k cash at this at midday. Big sum for a company in this position. Just shy of 1% of shares in issue.
If these are falling into sticky hands, then the amount of freefloat could really be less than 30% suggested by their Major Shareholders list.
Will there be a bid, before any big news?
Thr latest RNS suggests the target company is liable for the DD costs on this transaction, but do agree, this is going to need to explore a placing to keep a listing shortly if it doesn't go ahead.
What's stopping them from refinancing the debt, paying of the INL loan, then getting a placing done?
They are in the strongest position they have ever been operationally, surely they can put together some simple cashflow forecasts to demonstrate this to aspiring lenders.
If the INL demand for repayment is hostile, which people seem to be alluding to, then surely TB isn't going to just give away all his shares and the singapore operating sub, without exhausting all avenues of raising finance.
I'm personally of the belief that an underhand tactic is on the way, as usually happens in these scenarios. But if something positive does happen, then I would be very very suprised...
I'll be very suprised if this can get any benefit for shareholders now. Feels like damage limitation.
I'm usually optimistic, but I've seen no cash shells generate any benefits for investors.
Feels like they are just cash cows for Directors/Advisory Firms.
I hold the view they will be working with WHI to take control of the operations of the business. I suspect zero return for shareholders. TB will keep his job and likely some form of equity stake in the new business as a sweetner.
They have technically been insolvent ever since the Loan Notes were issued by WHI. That was the point when they handed over the keys to the business. From then, it was just a waiting game, until the business ran out of funds. Not sure how they got away with the c 350k fundraise in January, or if that Investor held on to their shares... i suspect they didn't and some poor sod ended up with the paper on the secondary market.
CC, thanks for clarifying on the "ceased trading" item and also the social media post.
Hope something good comes of all this, for those with a stake. People don't deserve to be shafted in such a fashion.
Interesting that the "large supportive shareholders" were happy to throw their equity down the drain for the sake of a few million quid in funding? So close to East Imperial approaching cashflow breakeven?
Even on their social media, they have made no comments in relation to them ceasing trading and that they are going to appointing administrators?
IMO, may now assume this is a behind the scenes agreement between the new soon to be owners WHI and TB. Both parties will both know what they are doing is morally and ethically wrong.
It's clear this has been pushed into difficulty to get the Company on the cheap. Simple as that.
Fiduciary duty stands for absolutely nothing. The UK markets are a pariah.
Yeah CC, as I say, something not feeling quite right here...
I saw the announcement of a new customer in the US on X, shortly after they indicated they had ceased trading. Is that a marketing gaff by a junior member of staff I wonder?
This feels like a right AIM con job... and this one has a main listing!
Something is going on here IMO...Just watched his March video again.
How can a company which is just about to become cash flow break even, run out of money and then announce administration, with loan notes called in less than one year from when they were issued.
On companies house, I see they had a subdivision of shares approved earlier in the year, so they can raise below a penny if in dire straits... and if you watch his last video, he mentions 'large supportive shareholders' who are interested in further debt finance... what was the Enterprise Value here 5 mil? And debt (+ accrued interest) 2.4mil. So just shy of 50% gearing and they wanted more debt ! That sounds dodgey for a start!
If I had a substantial amount in this, I would be asking big big questions...
Awaiting an RNS where it reveals TB has an interest in the new company that now owns the East Imperial assets.
A business called 'ITS' followed the same sort of scenario a year ago, however they sold the assets off to a new business at a substantial discount to NAV.
One of the substantial shareholders of the new business was the existing CEO of the PLC. And now they are even trying to get listed again! Wonder what chumps will end up carrying the bag there!
Hey CC, just to echo your point a business that has ceased trading is usually more forthcoming than what EISB appear to be.
They haven't updated social media to this effect yet, but given they have customers and suppliers who could of course suffer from this fallout, maybe they are doing the necessities behind closed doors?
IMO - when the death spiral finance was issued last year, that was the point people should have had alarm bells ringing. The fact they raised in Jan circa 350k, from some party, makes you wonder what that party was being told. It was at 1.1p also...
They have also undertaken a subdivision to raise below 1p PAR. So raising equity to repay the debt was surely an option?
This stinks unfortunately, but it is legal. I've seen it happen so many times. It's why the LSE/AIM will become a pariah IMO.
In the loan subscription agreement, is there any clause which allows WHI to call in their debt earlier than the redemption date? I imagine there will be, such as if East Imperial have defaulted on an interest payment, or if there is a high liklihood the companys future ability to make repayments of interest, is highly detrimented.
The subscription agreement; should outline this.
AIMHO, DYOR,GLA.
Top, sorry to hear your situation here, hoping you can recoup losses in good time if that does materialise.
Key point here will be if TB has reached an agreement with INL behind scenes.
If he has, IMHO this is finished. If he hasn't and there's hostility between the two parties, then what's to say they can't get raise sufficient equity.
In his last video he mentions this has some 'large investors' and seems reluctant to carry out any dilutive fundraise, preferring additional gearing which is of course a massive risk to a business like this.
If what he says in his videi is true, i'm sure those same investors will be contemplating to treat their existing investment as a sunk cost, or stump up financing to give this business the level of funding it needs to finally reach profitability.
GLA, AIMHO, DYOR.
Assets will viewed to be worth the same value, if not less, than the debt of circa 2.5million IMO.
INL's notes were secured on the singapore incorporated operating subsidiary and also all of TB's shares.
Given his shares look like they are worth less than toilet paper, the singapore operating subsidiary must be the crown jewels.
What else does the company own that should be taken into consideration? There must be something as why would TB need to pledge his shares as security?
Inevitable situation really, especially back when the death spiral finance was issued. There was no way existing shareholders would ever have a part of this as a profitable, cash generative business. The new owners will though IMHO.
Looks like something could be going on here...
Scrap that, maybe it's a Bed and Isa...
Looks like massive sells which have gone through...
Bought a few on the Dip... have had my eyes on it for a while...