Member Info for NewKOTB

The utilisation of tax losses although a massive concern is but a bystander to real issue of surrendering control of OUR company to Mercuria at fire-sale price.

aimo & dyor

Probably on the back of activist shareholder action today wanting to remove Hurricane Energy's top 6 directors.

Could be prelude to what may happen here too.

https://www.reuters.com/business/energy/hurricane-energys-top-shareholder-crystal-amber-fund-calls-remove-chairman-2022-12-23/

aimo & dyor

See he's either been told not to comment or he thinks like us, awful deal which if he was to state as so would put him in hot water.

https://www.malcysblog.com/

aimo & dyor

sasa,

Yep, vote required as per :

" Approval by ordinary resolution of Serica's shareholders to allot the Consideration Shares.."

sasa,

Hope you at least enjoyed your mini-break .... worth reading 'Visitor' posts along with the usual informed posters.

https://www.lse.co.uk/profiles/visitor/

PS : You have a lot of reading to catch-up on.

ATB

Horrendous destruction of value here ....

Yes, I know, even so 1.2% of a billion turnover is significantly better deal was the point I was making.

not all all > not at all

“Serica is a highly cash generative business and the question will be whether shareholders want greater near term returns, or support a larger, longer-term business with aspirations to do further deals potentially beyond the UK North Sea,” said Investec analyst Nathan Piper.

With due respect to Nathan Piper, that is not all all the issue here.

Serica had $166m in tax losses in 2016 .... took to this year to use them all. How long do you think it would take to utilise what Tailwind apparently have to offer : $1,366 million of brought forward UK Ring Fence Corporation Tax losses and $1,202 million of Supplementary Charge losses .... and before Labour cut / remove allowances or nationalise NS O&G. These tax losses are a red herring within the deal and should, at very least be heavily, heavily discounted afaic, yes some will be used but with the proposed workovers / drills etc think you will find only a small proportion will ever be used as we will be accumulating tax allowances fast as we utilise them. SQZ already have imo estimated ~£80m accumulated tax losses for this year which was not mentioned in the RNS either, just our cash position.
$1,202 million of Supplementary Charge losses is set against tax of 10% on profits ..... at $1bn profit PA it would 12 years to use this allowance afaik. I'm not tax expert, but that's the way I read it.

aimo & dyor

Mommur,

Well done Sir ... :-)

As for "as at the moment it has all the signs of a debacle...." indeed so ! I would also question the timing of this deal announced first week of Xmas holiday season when most analysts have already wound-down. Lost days due to xmas and NY will add to shortening the window for objections to be answered but also bring the vote around in double quick time. All part of the stealthy approach to get the deal through imo

aimo & dyor

Even more reason to question timing and structure of Tailwind deal !

https://www.pressreader.com/uk/the-press-and-journal-inverness-highlands-and-islands/20221222/282037626227841

David, please read this BB as your holding would make getting this deal passed (in its current form), if voted NO, extremely difficult if not almost impossible.

atb

btw, ~40% is the decline in our SP in just over the last 3 months ..... guess managed decline started once those in the know, knew the deal was on the cards.

aimo & dyor

Where the 'ell did they get 19% .... more like 40%

Beech, if true, as I have no reason to doubt so ... best news since this atrocious deal was announced.

atb

Just shows how out of kilter our Government are to what is happening, 1.2% vs 35%(75%)

"After amendments were included, the government expected to collect EUR 1.8bn per year, EUR 200bn less than initially expected...." Clearly the Spanish operators have spoken ... whilst ours sit on the sideline or come out with stupid, absolute Looney "Cash Machine" quotes.

SoS,

"Serica would be better looking at something like Hurricane - huge losses carried forward and up for sale at a fraction of the price being paid for Tailwind..."

Maybe that is their game plan or should I say Tailwindv2's (aka Mercuria's) plan ..... with backing of our cash could go on a NS spending spree looking at snapping up all the small player purely for the tax losses. If so mighty dangerous game as I guess if rules change, could be end of the road.

For sure we need significantly more meat on the bone of this deal because as it stands it's a dog of a deal for current shareholders.

aimo & dyor

Jas,

Agree with your post. The points you make particularly : "but I did not foresee them issuing mass dilution", fwiw, don't think anyone seen ~40% coming esp as it now appears SQZ super cautious approach to deal making has been thrown out of the top window of Burj Khalifa for some unknown reason. You are also right about AA, never would he have signed off such a deal, ever !!!

Added to which Mitch said after announcing this deal :

“We’re not sitting back and saying ‘oh well that’s it, we’ve done this deal, we’re made for life’...."

What the 'ell !! Did I read that quote correctly, sounds like Mitch is already the mouthpiece for Mercuria not at all a quote I would ever, ever expected from Mitch. After 5 years of zero deal making, plus refusal to enter into meaningful discussions with AA on KIST approach a few months ago, we now have Mitch thinking he's Billy The Kid, gunning for deals around the globe ..... as I said, Trojan Horse.

Deeper things at play here afaic ....

Ithaca, were are you !!!

Vote NO on new share issue (~40% DILUTION) as that is in effect, if passed the green light for the deal to go ahead.

aimo & dyor

Then of course, with Mercuria controlling the voting, god knows what massive hike in salary and bonuses / LTIP will be passed in the near future ..... The remuneration committee will probably suggest outlandish increase for doing 'such a great deal' by selling current shareholders down the river. After all, with Tailwind founders having more shares in Serica than ACW / MF that would be re-balanced at the very least as our directors currently have half that of the proposed holdings offered to Tailwind founders.

Guess that's why the new company will remain, as stated, on AIM .... less regulatory constraints.

aimo & dyor