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I find it interesting that they’ve just marked us significantly down again this morning. No volume to justify it. Following a buy of £50k for c.0.37p on the bell on Friday. Got to laugh
Kewben - for about 2 years. Was asking as I am interested to know how entry timing shapes different opinions. On this deal no one was screaming for joy from the roof tops... even the more positive reactions have had an element of “okay, tell us why we are going down this route?”
How long have you been invested here Kewben?
Good post TBTT
Fantasy - agree on the cash flow in 2019 point. I sense that AP and the Board know that very well hence they couldn’t wait any longer for Mercuria and that short term expensive finance was worth it to get BP’s $1.2m per month fcf as quick as possible (under the circumstances). On the AP failure point then I of course agree that IF he fails he will find it hard to remain CEO. But the key here is timing. When do people make that judgement? People will have very different views on that. Also I ask myself how I would have reacted if AP had raised $3m in vanilla equity at 0.4p. Anyway there are even more questions which now need answering. This deal increases the pressure on the Company to deliver results in the very short term. Also what will this funding deal deliver? Lots of questions to be answered
Fantasy - Lol. The end of him. Really? Who’s deciding that, you all by yourself? So what if Bergen converted tranch 1 at 0.59p and Vast landed a billion dollar diamond project? Let’s see what happens. You seem to have a very binary approach on this which makes absolutely no sense to me.
Fantasy - haha well those are your criteria. I’m sure many on here have there own. I also think one year in the hot seat isn’t that long a period.
Fantasy - certainly not happy at the moment. My initial reaction to be honest was WTF... However I’ve had time to review the terms and I don’t think some of the labels and descriptions of the raise have been entirely accurate. Vast is on the cusp of turning into a very attractive and profitable business. If this is part of ensuring that, and dilution is limited then I will be happy. I think in 6 months time I will be in a far better position to judge AP on his performance.
The reason why it is not a death spiral is that there is a clear cap on the minimum (0.2p) and maximum (0.59p) conversion ratio. If they do decide to convert at any level in the above sp range they can’t just dump the shares. Nor would they really want to. Their systematic selling could trigger a reduction in value of their remaining position and ultimately reduce their return. More likely they would wait for a decent rise to lock in even greater returns. I say more likely due to the knowledge of what this will be financing. Also people getting upset about the transaction costs should compare this to other sub £5m equity raises on AIM. Transaction fees around 10% are pretty common. At worst IMO it’s a expensive equity raise at a level we didn’t want to be raising. At best it’s high short term borrowing costs to ensure BP comes online in the near future and perhaps funding for something which is even more valuable.
2pence - Good post. Nominal value here would normally relate to the par value of the shares or in this case convertible security. Don’t think Vast has the right to buy back the shares once they have converted. They do however for 90 days pre-conversion. The Funder cannot also dump their shares post conversion. I agree with you that people who a stating ‘death spiral’ don’t quite get the terms.
Teacup - I hope it does. Your interest here is only a positive to me. Otherwise why would you be hanging around. Research shared is always appreciated
Teacup - “but funding is apparently a current issue we have, hence the loan“ So you’ve finally taken a position? :)
Fantasy - I certainly would not be happy with 0.6p on diamond news.
Fantasy - I feel like I’ve got a reasonable understanding on your view of AP and Vast’s current position. I don’t agree with parts but understand where you’re coming from. Always good to have a balanced BB. What are the key things keeping you invested?
Kewben - your post at 10.28 is a very interesting one. Vast needed cash due to the delay of T2 but it didn’t want to raise equity at today’s price. Now if they were near certain that ‘game changing’ news was going to drop in the next 30 days, including the delivery of T2 Mercuria, that would give them the option of paying back T1 Bergen if at an unattractive conversion share price or effectively raising capital at a much better price if the sp was much higher. Interesting thought. In that scenario AP would appear a genius. Appreciate a lot needs to happen for it to play out like that. What I will say is that on reflection these terms have some key fundamental differences to Crede, Darwin and Bracknor ect. Whilst I wasn’t happy when it was announced I think some are overplaying the downside scenario.
Dodge - on the $1.5m outstanding those payments were coming from PP over the last 9 months. Depends on the repayment profile but I doubt the amount still is at that level
Dodge - might be something to do with the Rom lawyers and Romanian law which I am not familiar with. Under the T&Cs of the loan agreement drawing down without charge released may have been fine. Perhaps the lawyers then came back and said otherwise. We are all just speculating but I struggle to believe someone with APs deal history and experience would ever enter into this type of agreement without it being for the very short term. That’s not me saying I like it by the way.
Also for what it’s worth it’s probably all connected and highly circular. Use a bit of the money to ensure release of charge of Rom assets (and other Zim opportunities) which in turn allows Mercuria to sign off drawdown which allows this bridge finance to be repaid. There you go, problem solved ;)
TBTT - Exactly. Why go down this route? Because they have surely done the maths that placing at this price is more expensive than these bridge financing terms. This gives 2 important insights - the board have very high confidence of paying the loans back quickly - the board strongly believe the sp won’t be anywhere near these levels (much higher) in the near future
Wow you guys really won’t let this drop