Member Info for Muck165

As far as I can see from the RNS, the whole transaction has a long stop date of 13/2.

Before that there needs to be a meeting/vote. If it’s called as an AGM, 21 days notice is required. If it’s a GM then 14 days notice.

So, at the very very latest the meeting notice, accompanied by the admission doc/placing details, must be given by the end of Jan, unless agreement is reached to change the longstop.

That’s my reading anyway.

Seems to me Trump is accepting of and actively pursuing global spheres of influence, with superpowers taking dominance over each.

Personally I can’t see Tajikistan falling within the US sphere given its location and heavy financial, cultural and military ties to both Russia and China. And if Taj is sitting on significant rare earth or other deposits then it’s difficult to see how Russia/China won’t be the customer, rather than the US or other Western nations.

Do we care - I don’t know!?

You’re right I think forfaiter - scrap my last.

Can’t say without more details about the placing or possible change in capital structure

But if we assume just the raise (not the bookbuild), and that it’s done at 0.1p, then…

5bn currently in issue

7.5bn in the raise

10bn to BS as purchase consideration

That makes 22.5bn.

All things being equal

Existing shareholders will own 5bn or 22.2%

Placing investors will own 7.5bn, or 33.33%

BS will own 44.44%

So, we will have been diluted by c78%, which means for us to remain flat the post re-admission MCAP will need to be around £30m.

That’s my reading anyway, but as has been said there are just too many unknowns at the moment.

So

Agree.

Assuming the 2024 headroom authority remains valid (no certainty about that) then by my reckoning there’s only about 4.5bn of remaining headroom. That means a 7.5m raise would have to be done at around 0.169, a 30% premium to current price. An 80% dilution would follow with the acquisition, so to get a premium raise away in all these circumstances would mean AP has some astonishing news up his sleeve.

More likely I think is that the admission document will package everything up together - the GM notice, the acquisition details, refreshed headroom authority/consolidation, and the placing details. My view is that we will then remain suspended until the GM and the vote. We vote yes then the placing and acquisition complete with trading then restored for the enlarged entity.

We vote no, Vast seeks re admission for the current entity but with no certainty of success.

So, vote yes, get very heavily diluted, but hang on to some value (which in time may grow), or vote no and risk losing everything.

This is a last hurrah for AP.

Well, with everything going on in the world right now you’d have through that any company in the defence space would be a good bet.

All depends on how much they have to do to get the admission doc out.

For my money they’ve been working on this for the last 6 months. Vast already did a suite of DD not so long ago before Vast bought it. AP and PF are in both camps. It’s being done via a locked box mechanism with a locked box date of 30/6/25. If I recall, Caracle went to have a look in June.

So all in I think they’re likely far further down the line than might be thought.

For purely accounting purposes I agree the diamonds are recorded as having no value. As I say though, in my view the context of the acquisition requires more scrutiny of that value.

“If the company believes the diamonds have a material present value, then that value should be disclosed formally”

Exactly. The question then becomes one of materiality. If the diamonds are worth zero, it’s immaterial to the transaction ((although AP might have a few questions to answer).

But we already know, well from AP at least, the remaining diamonds are expected deliver the “majority of value”. So reasonably that’s at least more than $1.09m. And on any reasonable view I think they can be expected to generate at least the current MCAP. For me that’s material.

Again, for arguments sake, we could be sitting on a single 10ct fancy yellow clean diamond. Your argument is that attributing a value to it is speculative until it’s sold. I get that from an operational and accounting perspective. But I don’t accept it in the context of this acquisition when we will be asked to give away 80% of that value to Bay Square, particularly when at least 2 of the Bay Square benefiaries (AP and PF) will know what diamonds remain, and what there quality is.

I understand that ASI, in the context of normal day to day operations of a diamond miner.

But here the context is an all share acquisition.

We are being asked to approve an effective payment to Gulf of 80% of our value. For us to determine if that’s fair we need to know two things.

1. The current financial position and prospects of Gulf

2. What our business is worth.

Our business value includes diamonds. Their value is material information to permit informed choice.

Just to illustrate, based on our current MCAP an 80% payment represents £5.2m. We might think that’s a fair payment for Gulf and the transaction is approved. But then (for arguments sake only) the diamonds are sold after completion for £10m. BS shareholders will benefit from £8m of that, meaning our effective purchase price wasn’t £5.2m, but £13.2m.

I’d like to know if this might be the case before I vote.

But we also have diamonds. They carry no value in our financial statements and aren’t, at least in my view, fully reflected in the MCAP. But conceivably they could be worth the current MCAP, and perhaps more.

Well, I think that’s a pretty ridiculous thing to say ASI.

An open question…

Should we be given a more precise valuation estimate of the remaining diamonds before being asked to vote on the acquisition and, most likely, a headroom increase (or refresh) to allow the placing?

Personally I can’t accept the line that no value can be attributed until they’re actually sold. Vast have had the stones for 7 months, there are now much less of them, and if they are actively marketing them or putting them to tender, then they must have an idea as to their value. So in my view they CAN give a better estimate.

Equally, we will be asked to give over 80% of what I imagine, at the time, will be a debt free company as consideration for Gulf. For us to be able to do that we need to have a very clear understanding about the value of our business. So I think we SHOULD be told.

In this vein by the way, I also think we should be given a true value of all our assets and Manaila in particular, given we still don’t know if the licence for that mine has been successfully renewed. Anyone interested might want to look at the Romanian Court records where you will see that this month Sinarom Mining lost an Appeal (in the Bucharest Appeal Court) against a notice served on it earlier this year by the Romanian Mining Authorities. I have no idea what that notice was, but I doubt AP liked it given he appealed it.

So I think Vast CAN tell us, and SHOULD tell us what their firmer appraisal of the remaining diamonds value is. Whether they will is a different matter.

I accept of course that this would become moot if the stones are in fact sold before any vote is taken.

Glos police has an annual budget of £188m

AI, on a reasoned analysis, reckons £10-14m of that is spent on officers summarising interviews in reports. Obviously that’s best guess.

But even so, anything that could automate that has value. Significant value.

And as has been pointed out, there are 45 police services in the UK.

This isn’t digital control, it’s just AI driven assimilation of interviews in line with PACE requirements. The value here is, as the RNS says, the huge reduction in police admin time, meaning officers can spend more time on making us safer. Seems a no brainer to me.

I asked AI the same questions this afternoon and got the same answer…..word for word.

ChatGBT.

@ASI - honestly I’m struggling to get my head round things here.

I may be wrong, but in an earlier post I think you said you’d look to sell as soon as trading was restored as an easy way to avoid the massive dilution on the cards. You may then buy back.

Makes sense, so much sense that I struggle to see why everyone wouldn’t do the same.

But that will push the price down. We are already barely above nominal. What happens to the placing proposal if we fall below, and potentially well below nominal? We can’t raise below nominal. Would placing investors be prepared to lock in at nominal, or perhaps even a premium, knowing full well 80% of the enlarged shareholding would be then paid as consideration shares?

I know AIM 14 says trading will be restored on publication of the admission doc, but in our situation that seems primed to create a disorderly market and threaten the very placing that Im sure is a key part of the transaction as a whole.

As I say, I just want to see more details when the GM notice is given and we know what we’re voting for.

@bert - No it doesn’t says shares will be re-admitted.. It’s says Vast will seek re-admission. That’s the nuance I’m talking about.

I think we will have to respectfully disagree on that ASI.

For me, applying for or seeking restoration is not the same thing as getting it.

But I’ll admit I’m not certain. Just need more details when the GN is announced and resolutions are proposed.

Of course, if we vote against then the question looms about whether the suspension would be lifted at all.

I think there is a nuance here…

I think Vast will APPLY for shares to be re-admitted to trading (on the basis that we are proposing an RTO) when the admission document is published, but actual restoration to trading will only be permitted by the market once we’ve had the GM, voted on the resolutions, the placing is complete, and the acquisition is complete.

If we vote against it, a new application for re admission will be made for Vast stock as is (ie without the RTO).

So, if we vote for it then we get diluted by the raise and then diluted again by the acquisition. Whether that’s a good deal depends entirely on what we’re buying and the price we’re paying.

But whatever, if we vote yes but don’t sell the remaining diamonds until after completion, the value of those diamonds will largely sit with the current owners of Bay Square (because they will own 80% of Vast stock at that point).

Doesn’t seem fair does it….

For clarity, I was replying to sixth avenue.