Member Info for NewKOTB

I must add, should the issues of an additional 111m shares fail the vote, there is no 6 month lock-out. It will still allow for the deal to be re-negotiated if Mercuria really want SQZ as a 'partner' on better terms for SQZ SH. My guess is Mercuria (Tailwind) will walk ..... ideal scenario imo. Only penalty will be us having to pay Tailwind £7m break-fee, money well spent afaic.

"A break fee of £7 million is payable by Serica if: i) the Board of Serica changes its recommendation of the Transaction and the shareholder vote fails at the Serica General Meeting; or ii) the resolution is not put to a vote of the Serica shareholders by the long-stop date under the SPA being 28 April 2023..."

aimo & dyor

Infor,

"Am I right in saying he needs support 75% in value of shareholders to pass this hair brained deal?..."

No, just a tiny >50% of votes cast on the day .... hence why the Hardy's can be the deal-maker or deal-breaker here, if backed by two or more institutions holding circa 5% each then the deal will not happen as you seldom get more than 50% of share capital voting at EGM. As it stands, the Hardy's can play a pivotal role as David and Debbie are private investors they should use their vote wisely.

aimo & dyor

Mitch needs to state when discussions began within the circular, we can then see what influence this had over AA's approach.

So we know by deduction that most probably Mercuria deal was on the books and being worked on way back in July 2022, hence the 'strongly' advised to take no action on AA's approach and the way we dealt with thoes negotiations in an almost playground fashion. Negotiations usually take upward of 6 months for deal of this nature.

So, it then follows that Mercuria et al drove our SP down to such a level it ensured we had to give away ~28.9% equity with our SP on ~12 month low to cover the deal at 278p/s, £367m demanded, extortion on any other level.
Why no premium, at least should of used weighted 6 month average, does Mitch really think dealing at 278p is a good deal, giving away 28.9% voting control or the value of our reserves are inferior to Tailwinds. Why leave it until our SP bottomed to announce because Mercuria are driving the deal with full manipulation of our SP taking advantage of WFT as cover for declining SP aided by our own inept mgt.

Mitch, pull this deal and watch our SP put on ~20% instantly ..... market is not liking this deal, SH are not liking this deal, no prizes who does and why !

aimo & dyor

Beech22,

"You need >5% holding in order to request an EGM afaik. Now, interestingly the Hardy's could call one tomorrow and propose a resolution to REMOVE MITCH FLEGG from the role of CEO..."

For me, David and Debbie Hardy are probably doing more DD around this 'deal' than any of the other significant holders as such it is imperative this BB provide as much ammunition / factual information as we can.

aimo & dyor

upomega,

You need >5% holding in order to request an EGM afaik. Now, interestingly the Hardy's could call one tomorrow and propose a resolution to REMOVE MITCH FLEGG from the role of CEO.

No guessing what the outcome of the vote would be.

aimo & dyor

Mitch - Pull the Tailwind Deal & Merge With Chariot, would imo provide a much more favourable route for SQZ growth without putting our company into the hands of PE backed mercenaries.

https://www.chariotenergygroup.com/about/

For disclosure I also hold CHAR too.

Stevo12,

You mentioned, "He also confirmed that the exchange did not consider the Mercurial holding to represent a fundamental change in voting control..." how can that be !!

With Scheme of Arrangement you would require 75% of votes to support proposal, Mercuira would have, as if by chance the magical 25.2%, in other words blocking rights on ANY vote ie full control. As for normal EGM / AGM their 25.2% would be able to block or worst still, pass any resolution they wish .... undisputed control of our company thanks to Mitch !

Also, "although the deal failed the gross asset test, it would not be regarded as a reverse takeover..." so the takeover panel make rules that are not actual rules just guidance, what a joke, unfortunately not for us SH.

Thanks for that, your efforts are greatly appreciated by all. atb

aimo & dyor

TM1,

"This IMO it will become a struggle for power either this goes through or the directors are removed..."

Giving Mitch benefit of doubt, it's clear Mitch is oblivious to the real intentions of Mercuria or refuses to see what is in front of him afaic.

Mercuria have already made it clear that Andy Bell CFO is history by spilling the beans on Tailwinds website. Posted on Tailwind site, 20/12/22 was the following :

"Steve Edwards and Jacques Tohme joining the senior management team as CIO and Deputy CFO respectively, with Jacques Tohme becoming CFO within 9 months of completion, subject to approvals.."

Soon after I pointed this out on LSE BB, page was update to read :

"Steve Edwards and Jacques Tohme joining the senior management team as CIO and Deputy CFO respectively."

With 28.9% of votes how long before Mitch is removed, my guess is at next AGM if not before. As for Andy Bell, he will be lucky to last the day following completion of transaction.

Mitch left Serica to become CEO of Circle then only after Circle falling into administration, came back to Serica with tail between his legs and ACW took him on. As a COO Mitch has done well in extracting as many barrels as possible and extending the life of fields but as a CEO, sorry but I do think Mitch is well out of his depth.

Mitch is so proud of his 'achievements' at Circle Oil all reference from his LinkedIn has been deleted and replaced with what is a lie ..... continuous employment with Serica since 2006 to present .... really !!! Think you find he spent ~2 years at Circle 2015-2017 taking the company in administration.

Mitch, a warning, no matter what 'deal' Mercuria have offered you, Steve Edwards will be behind your desk in a flash.

Mitch, you are swimming with sharks with lumps of fresh red meat tied around your neck, only one outcome afaics. Not too late to pull the deal and do the right thing for shareholders, yourself and your karma.

aimo & dyor

David,

I have listed links to the most informed posters of recent weeks that I suggest, may wish to read :

https://www.lse.co.uk/profiles/visitor/
https://www.lse.co.uk/profiles/fool-on-the/
https://www.lse.co.uk/profiles/banburyboy/
https://www.lse.co.uk/profiles/infor/
https://www.lse.co.uk/profiles/stevo12/
https://www.lse.co.uk/profiles/newkotb/
https://www.lse.co.uk/profiles/dickupham/
https://www.lse.co.uk/profiles/dennisthepennis/
https://www.lse.co.uk/profiles/quintuscurtius/

These are in no particular order and my apologies to anyone missed off.

atb

MECURIA ASSET HOLDINGS (HONG-KONG) LIMITED also resigned from Tailwind two days after announcement !

See write up on our two major independent NS players produced from Jefferies, our joint house broker, yet, to-date nothing from them afaik regarding this deal.

"North Sea oilers Harbour Energy and Ithaca tipped for major upside..."

https://www.proactiveinvestors.co.uk/companies/news/1002411/north-sea-oilers-harbour-energy-and-ithaca-tipped-for-major-upside-1002411.html.

PS : Real test of our support channel tomorrow for SP .....

aimo & dyor

Mitch, it appears you are out of your depth in this deal I'm afraid. Go back and re-negotiate on better terms, ie reduce Mercuria's holding substantially or walk away.... represent shareholders (your job btw) interest and not that of others and BoD.

You have the option too, for example offer Mercuria 10% of shares (27m) on completion of deal and written into contract assuming certain milestones are met further equity could be issued ..... so after 18 months they are offered the additional 15.2% (13m) shares which would also have a lock-up of 18 months from issue. That would still achieve the desired 'control' that Mercuria want but would need to work for it ! Many ways to re-structure the deal which would give more assurance to existing SH's, you need to work a better deal, period !!

The reduction of initial equity would also go some way to resolving the issue of this being a reverse takeover, although this is not at all acknowledged by our BoD and as such legal challenge may follow.

aimo & dyor

upomega,

"The market still thinks this is cra..p deal and so do I..."

To be fair that is still my gut instinct too, however as I run the figures and assume SQZ change strategy in expanding the portfolio overseas, I can see a glimmer of light at the end of the tunnel (so long as it's not the EuroStar heading towards me). This would all hinge on Mercuria not being intent on taking us private, big ask afaic.

Am I comfortable with the deal, certainly not, however most of the institutional investors will probably vote for the deal through apathy or not at all. The Hardy's are once again the kingpin's here with the additional 111m share issue proposal needing >50% of votes cast to pass the resolution. Even a visually impaired man in a blacked-out room could see the massive risk to shareholders investments here, yet Mitch et al appear star-struck with this deal, (shame on ACW for not seeing this deal as is given his pedigree) a deal that clearly was and is being astutely driven by Mercuria.

Remember, that Mercuria will have in effect full control of Serica (28.9% of votes) so could take SQZ private with ease at any point after the 18 month lockup period has ended and at what cost to current shareholder !! Ask yourself, why do you think Mercuria would not budge on us having to give away 28.9% (25.2% + 3.7%) our company. Mitch is allowing Mercuria to pull-up their Trojan Horse right up to our front door with welcoming arms.

Hardy's should be concerned, very concerned.

aimo & dyor

infor,

Yes, it says something that a company like ENW with assets in Ukraine until today's RNS have been performing better than Serica.

"as it stand we would clear ~£152m profit (post windfall @75% tax & not inc any tax allowances ).."

Now, should we be able to use all the tax allowance acquired via Tailwind to off-set purely corp / supp tax then our profit after tax would climb to ~£365m. This would exclude any EPL allowance that would clearly boost the bottom line substantially too.

As it has already been mentioned, utilisation of Tailwinds tax allowance can not be overstated and is critical to this deal , as such, be made absolutely crystal clear in the circular that these are indeed 100% transferable and able to be fully utilised.

You then have the added 'profit' from Tailwinds operations going forward too.... will this be enough for me to vote 'yes' to issue of an additional 111m shares, probably not as I'm so uncomfortable with Mercuria et al having ~29% of our company and voting rights.

aimo & dyor

Given current Brent $80 and NBP 163p/therm, ballpark est known capex £10m, hedging, dividend £50m, Opex £130m, admin £15m for 2023, as it stand we would clear ~£152m profit (post windfall @75% tax & not inc any tax allowances ) on 28kboepd vs 2021 post tax profit of ~£79m. Clearly when we and others produce YE figures for 2022 I full expect them to be well in excess of 2021 and for press / Labour et al to start moaning once more..... something new for Mercuria to experience!
ATM investors see NS shares as no go, when the reality is given high probability of sustained elevated commod for next few years, money is still to be made by these companies, hence why Mercuria want us !!

aimo & dyor

n/m

My guess id buybacks have stopped to allow for greater debt repayment, hence come TU this week or next, the market will respond well to how much debt has been cleared. Stopping BB at previous rate would allow for an additional ~£30m to be paid off. Recent fall is primary down to BoA feeding into the market, their holding , once they stop Richarding around maybe we will see some SP appreciation.

aimo & dyor

Stevo,

"I suspect if N Egg had come in we would not have progressed this deal..."

Still too much cloak 'n' daggers afaic over the results of NE, imo the company have more information available but don't wish to share it with either shareholders or the market for some reason yet to be determined imo.

Poor close ....down 12.5p (-4.39%)

aimo & dyor

Just listened once more and it's clear how flustered Mitch sounded during the call, not his usual assured self. Also highlighted how out of depth Andy Bell is, so even more so I fully expect Andy to be given the push at time of completion or at latest within 3 months.
Anyone else notice how Mitch completely skipped over the point on slide 12 of "refinancing of combined asset base in 2023". Also how Andy responded to Q&A on future financing and stated "better credit capability" & deal will " provide stronger borrowing going forward".

So for me, it's clear as day that Serica will be loaded with debt to rapidly expand the new group, which if done correctly could be beneficial, however who and on what terms will this 'debt' be held, better not be via senior bonds or alike held under the Mercuria umbrella. On plus-side that means more, one would hope, value accretive deals will occur !!!

Full marks to Chris who asked some awkward questions and could tell by Chris's voice and response that he was not fully convinced by Mitch / Andy's answers either.

Plus point again is the mention of progressive dividend policy, all well and good so long as our SP recovers too. If things pan-out without any underhand dealings / tactics by Mercuria then there is a good chance our SP will reach new highs during 2023. ATM these are nervous times for Serica investors, due to this deal and proposed direction of Serica being so alien to what we have come to expect from our BoD.

One would hope for this short-term pain to quickly turn into SP gain and in longer-term become a multi billion £ company. Remember, no vote on the deal per se, just vote on issuing of 111m shares, a point by the way was also skipped over by Mitch on slide 4, under 'Completion Conditions'.

New Year upon us and I'm trying really hard now to see positives on this deal going forward. GLA

aimo & dyor