RE: Even if…12 Aug 2021 14:09
No view on timeframe: each day is as likely as the last (half-full) or unlikely (half-empty). However, I think the proceeds due will surprise you in a good way.
Don’t forget that in the 12 May RNS the BoD signed off saying “Shareholders should note that one of the potential transactions proposed is one to which AIM Rule 15 (the fundamental disposal rule) would likely apply.”
Assuming it is just MT+Flanks for now (Terskaya, the one where we have the Interim CEO), it doesn’t take up much space on the balance sheet or contribute much to P&L, so to me it kind of has to be Consideration Test: proceeds receivable >75% of MCAP. Yes that pre-supposes, like the Rule does, that MCAP is already at a fair value, so receiving >75% in sale proceeds for the asset(s) means what’s going is “substantially all”. But it’s the phrase “would likely apply” that’s interesting. It isn’t “may” or “could” but instead a phrase that suggests the scenario in which it doesn’t apply isn’t readily envisaged.
The key (only?) variable there is MCAP. Shares were 27-28p at the time and I think it’s reasonable to state that the BoD didn’t believe that announcement, and the next few they had lined up, would spank the SP down to below 20. If anything they could be forgiven for thinking it would trend upwards from there (good news, sentiment and the fact it really gets a wiggle on when it starts rising seriously).
So if the BoD knew we were some months away from the circular, but still thought Rule 15 (>75%) would likely apply at that point in time, it suggests it remains valid at a much greater SP than 28p, and probably past the recent high of c.45p before it ran out of steam in January.
Where proper sentiment with substance behind it could take the SP is anyone's guess. The fun thing is trying to guess what the SP would have to reach for Rule 15 Consideration Test to no longer apply, but the Board to think “nah – that’s unlikely…”
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