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Yes, Ocelot, but what does that phrase that you're happy to reproduce here actually mean?
...”you” , not “toy”.
Ocelot: can toy explain to me what”reduced cash sweep for accelerated repayment” means, please?
Sandy: I’ve taken the trouble to go through all the RNSs pertaining to Vast’s debts since 2018, and the details of the 4 outstanding charges in Mercuria’s favour. There is nothing in the RNSs that in any way affects Mercuria’s rights under the charges. The terms in which the latest RNS is couched are notably different from those in the earlier deferrals of Vast’s scheduled debt repayments. If you can point to something that you think I’ve missed - rather than offer these rather insulting catch-all remarks - I should be happy to read it. It’s not my intention to attempt to mislead anyone on Vast’s current status. In the absence of such a clarification on your part, I stand by my earlier remarks.
I’m not privy to the details of Alpha’s security. They haven’t registered a charge in the UK. Vast/Mercuria have registered 4, all of them still outstanding, 1 subject to UK law, the other 3 to Romanian law. The only clarification of Alphas position I can find is the 25th May 2022 circular to shareholders, which details a property in Romania. But Mercuria was repaid £1mm early as part of the terms of their agreeing to Vast taking the Alpha loan.
The latest charge specifically states that in an event of default, Vast has the right to exercise its rights to take over and sell Vast’s assets, returning to Vast any excess balance over what Mercuria is owed within five days.
Re the diamonds, it scarcely matters whether a sovereign debt exists, does it? It’s one of the most corrupt countries in the world. If they don’t want to give Vast back its diamonds, what recourse does Vast have? They've had a High Court order for 10 months. They’ve got 43 days to raise enough money to pay off their creditors. If Vast goes bust, the Zimbabwe authorities are not likely to be in a hurry to discover the successor in title to the diamonds, are they?
Mercuria may take the view that it’s better to keep Vast going. Who knows? But it looks as if they’ll have the right to exercise their charge at the end of February unless Vast can in the interim find someone else willing to lend them the money they need to pay off their existing debts. There may be an excess value in Vast’s assets over and above the remaining value of Mercuria’s loan and the Alpha loan. If such an excess were greater than Vast’s current market capitalisation, investors might be OK. I merely think that both sides of the investment case should be argued out on these chat boards.
...the three asterisks in my post are not rude, they’re a short alternative word for cigarette. Very silly.
sandy: well, amateur i am. but a pre-existing fixed charge takes precedence over later charges, if any, as i understand this aspect of company law. there are three outstanding charges in mercuria’s favour, they’re worth a look, given the position in which vast appears to be. the one i refer to is the earliest, though not the most detailed. the more recent ones may well contain small adjustments, i can’t be ***ged at the moment to read through them all. there are no other charges outstanding, just the mercuria ones.
Sandy: have you read the charge dated 21 March 2018 on the loan from Mercuria to Vast? Particularly pp. 6-10.
New trade: getting extensions on the warrants costs them nothing and if the extensions lend support to a bullish interpretation of the RNS, allowing Vast to raise some more free cash, it will give the lenders a bit more cash if they decide to exercise their loan charges in six weeks time.
SandyShore459: I’m afraid Vast won’t have time to sue anyone if Mercuria decide to enforce their charge on or after 1 March. Their charge is, as usual with them, pretty comprehensive. From what I’ve seen, they normally control the bank accounts of the companies to which they’ve lent money. If Vast can’t meet the terms of the debt by the end of February, Mercuria may be entitled to tell the banks not to take instructions from the Vast management, and take over the business - other than the sub-Sahara bits and the parts subject to later agreements with Alpha, Vast and Mercuria.
There’s no benefit as far as I can see for the Zimbabwe Government in giving compensation for the missing diamonds. The Government will blame their predecessors if it comes to it, and the RBZ will doubtless claim sovereign immunity, so suing them won’t help, even if there were time. If you think the process of negotiating the diamonds’ release has been painfully slow, imagine what the process of going to law against the Zimbabwe State will be like. I dare say the Romanian government and courts understand these issues. Vast just doesn’t have any time left (assuming that the tone of today’s RNS is being properly interpreted here). That’s why the spike this morning has collapsed. The RNS offers just more jam tomorrow.
Ivans: what is delicate about the Reserve Bank complying with an order of the Harare High Court and handing the parcel over to the Court’s representative when he arrived at their premises with the order in his hand? And continuing to fail to comply with the order for another 50 weeks and counting. Who is going to get upset if they’re handed over? Vast have been trying to get their hands on these diamonds for years. They hired a high profile and well connected Zimbabwean businessman to work for them some years ago specifically for this purpose but one hasn’t heard much of him since.
The fact is, without the proceeds from the sale of the diamonds, Vast are not in a position to repay their loans, repayment of which has already been deferred for many months while Vast have been hoping for some progress. It appears that the lenders have now given them a deadline. The diamonds will cease to be an issue if Vast disappears. I doubt their creditors will bother to pursue the issue. It’s only the shareholders who will take a hit.
Gemstar: do you think that “finalising ongoing financing initiatives” is a reference to the parcel of diamonds? They’ve been after those diamonds for years. In two weeks, it will be a year since they got the High Court order. They have no leverage whatever with the Zimbabwe Government. They don’t even seem to have been notified of the protocols that are supposedly being arranged that will lead to a process whereby progress may be made in deciding a policy whereby terms can be agreed for the release of the diamonds.
If Vast were making any progress in getting their hands on the diamonds, why would they not have told their shareholders? If the RBZ still had the parcel in its custody, what have they to gain by dragging their feet for years in releasing them, against an instruction to do so from the Harare High Court?
Mercuria have given Vast a lot of rope. They may be taking the view that Vast shareholders, rather than its secured lenders, should now bear the responsibility for financing the company. The trouble is, Vast is now very small and an equity issue at this stage won’t be enough.
This is AIM, though.
SandyShore459: I think it’s probably significant that Vast have stopped referring to the parcel of diamonds altogether. I also doubt that any property that forms part of the assets subject to the Mercuria charges will be re-mortgageable. It seems to me Vast is in a tricky situation.
Dbh..: if you were the Governor of the RBZ and your predecessor, a friend of the then President, a violent and corrupt individual, had acquiesced in a request by a chap in a suit with some big bodyguards with big guns to hand over a parcel of diamonds to that President, what would you do? The present Governor’s term is up in April and he’s going to another lucrative Government job, I doubt he’ll want to stir the pot before he retires. He’ll pass the parcel, metaphorically, to his replacement. The question is, can Mr. Prelea hold Vast’s creditors at bay until then and if he can, what will the new RBZ Governor do? And what quid pro quo will Vast have to pay its creditors?
Dbh: so you would like an echo chamber rather than a discussion board?
This is what the most recent 4 December 2023) RNS on the subject of negotiations with Vast’s lenders on the long-overdue debt:
“As announced on the 6 November 2023, the totality of the debt owed to Mercuria and Alpha was due to be repaid on or before 30 November 2023. The Company is currently in discussions with Alpha and Mercuria regarding arrangements that will allow a further extension to finalise the settlement of its historic claims outlined in previous announcements.“
In other words, Vast can’t repay their debts without the proceeds from the sale of the parcel of diamonds. The debts are way overdue. It’s true that Vast has other, bigger assets to which a substantial value may be attributed. Whether they can be developed without an agreement on the existing overdue debt, I don’t know. Whether the lenders will continue to extend the terms of their loans. I don’t know. But if Vast needs the proceeds from the sale of the parcel of diamonds to enable them to keep the wolf from the door, it seems to me that it’s important that people discuss the chances of their getting these proceeds in time.
If you can point to anything I’ve “made up”, I’d be interested to see it. These diamonds are important to Vast’s financial position. It’s therefore important that an informed discussion should be entered into on their status. The fact is, the Deputy High Sheriff went to the RBZ six months ago with Vast’s legal representative to enforce a High Court writ in Vast’s favour, for the release of the diamonds (though there seems to be some ambiguity as to whether they were to be released to Vast or to the High Court). They came away with verbal assurances concerning the RBZ’s intention to enter into processes leading to the establishment of protocols, etc. etc. There appears to have been no progress whatever since then.
If you can explain whose interests it serves for the RBZ to keep this on the back burner in this way, I’d like to hear it. All I’m doing is asking highly relevant questions on a very pressing issue and presenting facts which haven’t been refuted. I should be sorry if admin on this site bans me for this. If they do, it will hardly be in the interests of informed debate on a highly relevant issue, will it?
Steward1: please! Why would the RBZ say anything about missing diamonds unless they have to? And who’s seen the diamonds since they were lodged in the RBZ vault? If you can point to anyone who’s seem them since 2010, please share.
The fact that the article predates the event (by less than a year) doesn’t in any way invalidate it. If you can find anything about the parcel of diamonds (other than recent attempts by Vast to have the High Court order enforced) in the Press that is more recent than this, please reproduce it. Mr. Mugabe was president for several years after this article was published and his wife did not appear to become less greedy in this time..
HTTps://nehandaradio.com/2009/08/20/grace-mugabe-selling-diamonds-in-china/
Have a read of this and ask yourself if you think the diamonds are still there. Mrs Mugabe has a residence in Hong Kong, where the Chinese authorities gave her diplomatic immunity. She also has a diamond cutting/polishing business in Hong Kong. She likes diamonds very much. Gideon Rono was RBZ Governor for ten years, until 2013. In the 1990’s, he was President Mugabe’s personal banker.
HITS: it’s not a done deal yet. Remember this? “In view of the impending Christmas break and inevitable Covid-19 related delay, we expect to conclude documentation and drawdown by the end of January but at any rate in the early first quarter 2021”
It’s Heads of Agreement. Similar to the senior loan deal (also arranged by Aleph Commodities) on which Heads of Agreement were announced at the end of November 2020. The loan was signed and the money received in mid-May 2021. This time, Mercuria will be on the other side of the table.
HITS: in addition, the wording of the RNS suggests that the Mercuria forward contracts are going to be transferred to Trafigura and a fixed price formula arranged between the latter and Angus to compensate Trafigura. The fixed price contracts are unlikely to be on more generous than the existing hedges, and are going to apply for longer.
And why have Anguish added another person to the senior management team? The previous new chap, Tim Kaye, was hired as Operations Director to get the second compressor successfully installed. Is he leaving now? At least, with a new man responsible for drilling etc., we should get more realistic timescale and cost forecasts in the unlikely event that Angus drills another well. Shouldn’t we? I wonder how much detail they’ll release in the event that a re-financing loan deal is signed.