Member Info for Okehurst1

PP,

Bob Holt has an impressive CV, personally I think he’s done a top job stabilising Rev B, he must have had his work cut out dealing with the Banks / suppliers / employees and throw in Walmart & Co.

Suggest Bob’s credibility and standing is not in doubt here.

Apollo 2.8 RNS - they left the door open

Under Note 2 on Rule 2.8 of the Code, Apollo, on behalf of its managed funds, and any person acting in concert with Apollo, reserves the right to set aside the restrictions in Rule 2.8 of the Code and announce an offer or possible offer for THG, or make or participate in an offer or possible offer for THG, and/or take any other action otherwise precluded under Rule 2.8 of the Code within six months of the date of this announcement in the following circumstances:

i) with the agreement or recommendation of the board of THG;

To be that close on a deal … serious $$ spent on DD plus the time

As Rock says are they - the Bankers - trying to salvage something as the II’s are pushing the BoD to find a compromise ?

Hi T4G

The guys own 32% it’s a chunky stake

They control which way this goes, sell to BOO or support

a rights issue ?

They support a fund raise then it happens

Will they ? I can’t see that happening tbh

That’s correct they need audited accounts in August - I said that

The AIM steam won’t accept management accounts regarding working capital currently, not while suspended, they will need the ‘ material uncertainty ‘ to be dealt with via auditors in the accounts

We agree a fund raise is then required

Will the ex directors chip in and ditto BOO?

Or BOO buy the management’s stake and tender for balance

REV B doesn’t return to public markets

BOO deal with the stragglers via scheme of arrangement

How this unfolds is now up to BOO/ ex directors they control events

The auditors are saying in effect that without the Banks providing a nil covenant Revolver then they can’t offer a clean forward statement, hence the ‘ material uncertainly ‘

It’s not about the net current assets as such it’s the cash position 12 month hence

So the problem then becomes timing as the results published are past the 12 months - up to Feb 2022

But the Auditors have not produced Feb 2023 results

AIM team won’t work with management accounts

This is the BOO BB -so am ovs for BOO - but Rev B can’t relist without raising $$$ to satisfy the Banks

They then need their auditors to satisfy the AIM team, it really is tricky as REV B in theory could suspend again in August if they don’t produce their audited accounts for 2022/23, the AIM team won’t have that.

Apologies for being long winded here as trying to lay out the position for REV B, it’s a pretty brutal situation, anyone who has been this situation / working with AIM Team will vouch for and against that backdrop we have 32% of the REV B holders who it’s alleged have participated in a level of misrepresentation against the company, are they going to pump $$ into Rev b and have no control ? Same applies to BOO

Maybe BOO will and are happy with 27% but what was the point buying shares even when Rev B was suspended? Doesn’t make sense ?

Why is it important to BOO shareholders ?

How are BOO going to finance the deal if they do go for the lot? Will they use part of the debt facilities? Maybe ?

They are currently debt free.

Worth a chat with your broker who will confirm the above and how the AIM team work - it’s why they suspend shares if the audited results are later than 6 months

Hi West

Yeah £2

PP1 , could be re fund raise - not impossible

3 II’s own 16%

Just what BOO/ Management ? What do they want ? They now control events to a degree as they have over 50% to control the BoD if need be via an EGM

PP1

It’s the AIM team that make the call not the City IF Rev B relist

The AIM Team set a high bar of at least 12 months working capital, Rev B don’t have that at the moment.

The management accounts won’t cut it.

Best speak to your broker he will explain how it works on the LSE /AIM Team and who makes the call

If ex management/ BOO back a fund raise with a £number that satisfied the AIM team and they take up their rights then assuming it’s of size - as a whole- then we can say REV B relists

Personally I don’t think it’s in the interest of either party to support a relist of Rev B, it’s not logical

Wolf

It’s technical for REV B

They can’t be let back on the LSE as the AIM team won’t let them with ‘ material uncertainty ‘ within their accounts, it won’t happen without a relative size fund raise

The Banking covenants alone will stop a relisting

IF Boo make a move and buy the 2 directors stakes then they can block a general fund raise by tendering for the balance

It’s what appetite Boo have got to take full control or remain just a shareholder and support Rev B financially

The fact they bought shares whilst Rev B was suspended indicates they have an agenda

Soon find out next few weeks

REV B accounts are quite clear PP1 as the Times reported

we both agree on that point, it’s highly unlikely it’s coming back

‘Auditors signing off the crisis-hit cosmetics company’s delayed annual results said there was a “material uncertainty” that may cast significant doubt over its ability to continue as a going concern’

Then it’s down to which way the 2 ex Directors go?

Chip in for a fund raise ? Get diluted if not ? No control at all

Have assets tied up whilst they fight legal Action? - they are coming in for a heap of pain next few years

Or

Take £P’s from BOO which could be £25M to £30M?

Wouldn’t bet against the latter, being Short BOO is a bet BOO don’t pull this off

Hi PP1

Once past 50% they control the BoD - no debate on that one it’s just fact

They tender 25p to 30p, not coming back to public market, anyone holding does so in private co

BOO then just pick off to get to 75.1%

Sort the rest scheme of arrangement

Extremely high chance a deal happens, BOO have all but flagged it - an event of sorts

IF BOO pull this off then BOO rerates with £350M Global Beauty sales including manufacturing plant / USA stores all plugging into BOO 1msq/ft auto fulfilment centre

That’s when we get the bump as the Shorts exit

PP1

Fully agree on your points about AIM / NOMAD

The AIM team won’t let REV B relist based on the audited accounts just released - the auditors are quite clear on material uncertainty

There is no chance of being relisted on management accounts

so unless they release audited accounts they won’t be coming back to the market any time soon - personal view it ain’t coming back as a quoted plc

I disagree with your view on it won’t be bought out by BOO

I think that’s highly likely.

Posted earlier on this one so no need to regurgitate in full but ex management will join with BOO or sell to BOO

It’s game over that that point for the 38% balance BOO need just 13.1% and have full control

Let’s see how it goes

Hi Wolf

In this case it’s not about debt in isolation

You can’t maintain a quote on AIM with a negative balance sheet - usually the auditors will qualify when doing accounts at which point the share is suspended

In Rev B position they have the £32M RCF plus they require working capital and need to satisfy the AIM team

all within a background of ‘ material uncertainty’ within the audited accounts

The old management still own 32% it’s what will they support? Will they put money in via a rights issue /placing or sell to BOO and pocket the £P’s

There is a fair chance the old management will face litigation- looks on the cards - I just can’t see them putting money in / taking dilution vs BOO buying their equity and they are gone

BOO buy their 32% and they control the show, if the new BoD don’t support their plan they call an EGM kick off the existing BoD and make a tender offer, they only need 13.1% of the balance and it’s done

I notice Bob Holts bonus shares are at scratch, he’s touching 70, will he want to put the graft in or nick a few £quid and he saved Rev B on his CV ?

Will be interesting to see how it plays out

Weird situation were existing management have been suspect to say the least and do BOO join with them and grab another 13.1% in open market or do they sell up to BOO taking the view they will be facing litigation - they take the cash and run

No idea what their thought process is but their 32% equity is all but illiquid plus Rev B are going to have to raise funds to be allowed back on AIM - the AIM team wont let them back on without 12 months cash / headroom and the bank waiving the covenants, it’s not going to happen without a raise

Will be ex management want to sink cash into REV B? Or as I say take the cash off BOO and be done ?

BOO management have played a blinder here, £15M for 27% and their balance sheet to support taking the balance puts them in pole position

Hi Knowbody

Good to see you over here, agree btw

Personal opinion,

Rev B lenders are going to want to see a hefty bit of cash raised as are the auditors and the AIM team

Gut feel , pure guess , BOO buy managements shares and tender offer for the 38% balance

We would have a £350M global beauty business with Debenhams including a manufacturing plant and £100M of Rev min USA

It’s a big ask but all BOO have to do is buy managements stake and it’s close to game over

# apologies

Should have posted

If covenants are breached or the shares are not readmitted, the company will be reliant on its lenders not requiring immediate repayment of the outstanding loan or on obtaining alternative finance in order to continue to operate as a going concern.

The Times - today

Snippet

Auditors signing off the crisis-hit cosmetics company’s delayed annual results said there was a “material uncertainty” that may cast significant doubt over its ability to continue as a going concern.

Auditors signing off the crisis-hit cosmetics company’s delayed annual results said there was a “material uncertainty” that may cast significant doubt over its ability to continue as a going concern.

https://www.thetimes.co.uk/article/revolution-beautys-loreal-for-teens-dream-turns-ugly-ngwk8tdrv

I’ve not looked for a while but it’s circa below cash wise being paid each year

Saying all that we should in theory earn income on the cash on deposit on the other side of the balance sheet

It’s a bit more complicated now because Ingenuity charge Beauty and Nutrition 35% and Ingenuity now pay the rent to MM not THG in theory

That’s why with Ste this morning I was quoting the £135M

Suggest we have to work at group level as it gets too complicated with up to £700M (ish) of inter company invoices

Ok so we have a fixed bond payment as we drew the cash down - £500M plus , due to be repaid within 3 years

Exact figures in recent accounts

We are down to £180M of net debt - so we have the difference of the cash on the other side of the balance sheet

Our net debt was as high as £250M but by managing stock they have brought this down

We have property to sell valued at £40M which could bring us down net debt to £140M but we still have to pay the £60M regardless

If that makes sense ?