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WG818: I don’t know who’s right between two well-researched posters, but what is perfectly clear is that Angus will need to spend a lot more money than small investors are expecting to sort out the problems that are causing a weaker than expected gas flow. And they appear still to be negotiating on the Global Re-Financing, which is needed mainly to repay the existing loans on time. The new loans thus raised will exceed the quantum of the old loans. Interest rates are higher now than when the senior loan was negotiated.
What all three CPR’s pointed out in common is that this is a heavily-depleted field and that production will fall by 10%+ within 18 months of re-opening (i.e. by February next year) and that it will fall sharply within a year or two more. If Angus are running hard to stand still while production is at its peak (currently) as a result of over-spending, big loans at usurious interest, the requirement for substantial further investment in new wells and kit, and forward contracts at highly unfavourable prices, they appear to have little time left to get their balance sheet in order before they are completely at the mercy of their lenders.
It also appears to me that the poster JD-Nau is associated with Angus, possibly an employee either of the company or of the consortium. His way of emphasising the differences between your and Bubblepoint’s understanding of what’s going on at Angus is intended to obfuscate the fact that, whatever the detail of what’s going on, you both agree that it’s not good. Production is disappointing, the finances are under severe, time-limited stress and it’s not immediately clear that they will be able to come up with effective and timely remedial action for either.
WG818: well, with Mercuria having lent at least the bulk of the money covered by the Charge, even assuming that Aleph were parties to the Charge, Aleph can’t do anything in the way of forcing Angus into receivership without Mercuria’s approval, which means that Mercuria would need paying off promptly with the whole of their remaining part of the loan and would keep the royalty, or a capital sum in lieu of what they might have earned from it. This does alter the economics fundamentally of Aleph/Kemexon forcing a receivership.
I have no idea about the economics of using the depleted Saltfleetby gas field for gas storage but imagine it would be better for everyone if as much as possible of the remaining gas were got out before resort to this expedient. I dare say all options may be under discussion between the senior lenders. Kemexon, as equity holders and possibly junior parties to the senior debenture, are not in the driving seat, or if they are, they’ve got someone very smart riding shotgun.
So, it’s either an extremely low bid, keeping Angus intact but no longer quoted, or some rather pricey deal on receivership. I’d say the former is more likely, preceded by very bad news, a collapse in the share price and a rescue by the Aleph/Kemexon lot under which the terms of the senior loan, and the Mercuria royalty, remain intact.
WG818: Re your 12.39 post: as I understand it, Mercuria are the senior lender, having lent Angus £8mm of the £12mm debenture loan that Angus didn’t need. This gives them the whip hand, surely?
HITS: no, neither do I. I think you’ve been quite restrained, bearing in mind the stream of unpleasant remarks that accompanied the share price spike to 2.9p. Your sale at 1.10p is looking increasingly sensible. There’s still a view on this and other boards that you haven’t lost any money unless you sell. Adherents to this view may be swiftly disabused of the truth of this view soon. No doubt some will be wailing their heads off and crying “foul”. Well, foul it may turn out to be, but there’s nothing they can do about it other than vote with their feet and take the loss. I shan’t be laughing at them either way and I’m sure you won’t either.
SInghie: The EU membership referendum was about sovereignty. A decent majority of voters clearly thought that British sovereignty was preferable to EU pork-barrel politics, with Germany gradually gaining effective control through its financing and control of the dispensation of EU loans and grants. The electorate having voted to get out of it, the pro-EU factions have never stopped griping. I’ve got no problem with that, they’re entitled to say whatever they like, but they should be told firmly to come back in forty years time. But this is the Angus chat site.
SandyShore459: thank you for your detailed response to my earlier post. Of course there’s no knowing what’s going on with the diamonds. It’s all best guesses. The point is, though, that Vast’s cash requirement for debt service and repayment can’t be met without the diamonds. It doesn’t really matter why they’re not being handed over (though, in spite of your reasoning, I can’t think of a reason why the RBZ or the Zimbabwe government, since you clearly think they’re involved, wouldn’t want them off theirs hands, particularly since there’s an order of court that they be handed over). What matters is that Vast be in a position to meet its debt obligations. It’s had a number of postponements but it’s at the mercy of its lenders if it hasn’t got enough money soon and the share price now pretty well precludes a placement as a sufficient source.
I see that Capstone is now out. I’ve seen a number of posters pointing to their presence as a reason for confidence in Vast. Now I’m seeing a number of people saying this is good news, as a potential large seller is now out! It’s been a horrible investment for Capstone.
Singhie: I don’t really understand your point about skills shortages. Japan and S. Korea are not doing badly and not only are they allowing minimal immigration, their domestic populations are declining quite sharply. It’s true that overall economic growth in Japan overall has not been strong but adjusted per unit of population (which should be the measure used everywhere, there’s no point in the economy growing if the indigenous population, or electorate, is not enjoying a rising standard of living) it’s at least as good as ours. They’ve automated, we haven’t. They invest long term, we don’t. Nothing to do with Brexit..and this conversation has nothing do with Angus.
SandyShore: yes, but it doesn’t take months to sort all this out. If the RBZ doesn’t know the procedures involved, who does? Who is responsible for them? I’m amazed you can’t see this. And that you can’t spot deliberately obstructive bureaucratic gobbledegook when you see it. And that you can’t look behind it to find a reason why this is all Vast are getting from the RBZ. No one from Vast has seen the diamonds.
Asimpleinvestor: I’m talking about normal business practice, not normal business practice in Zimbabwe. Normal business practice would be for a corporate customer of a bank to request release of his deposited property, arrive there with the appropriate Board authority, and have it put into his hands promptly. Once out of the bank’s door, security is the responsibility of the customer. It would also be the customer’s responsibility to ensure that taxes etc. were all paid. Vast turned up in June with a court order and an officer of the court authorised to enforce it and they got the bum’s rush. And a lot of bs. This may be normal in Zimbabwe. It isn’t elsewhere.
I wish you both good luck with it, as I’ve said before. You may be right. I may be wrong. We’re not going to persuade one another so I’ll try not to debate this further, unless something new arises.
SandyShore: what are these “material issues” to which you refer? All we know currently is that there should be a letter confirming a process that would define a procedure. That wording leaves plenty of room for further delays. Why would the RBZ want to delay it? Giving these diamonds to their owners is not difficult. It shouldn’t require a court order. Even so, Vast have got a court order now and have traipsed down to the RBZ with it and a deputy sheriff to enforce it.
This gobbledegook about protocols, processes and procedures is bureaucratic doublespeak, and Zimbabwe public servants appear to be reasonably adept at it. But please don’t accept it as normal business practice. It isn’t. Either the diamonds are not there or someone wants his palm greasing.
SandyShore459: I agree that receipt of the diamonds would cause a massive rise in Vast’s share price. 100% is probably an under-estimate. However:
“ the Deputy Sheriff agreed that the RBZ would confirm, in writing, the process that would define the procedure for the orderly and secure hand over the parcel to the Company, ”. Have Vast received such a letter from RBZ? Why would an election affect the internal workings of the Central Bank? Are investors here happy that the step they’re waiting for in this sad, long-drawn-out two-step is the receipt of a letter confirming the process that would define the procedure for the orderly and secure handover..”?
If the election was really a reason for the delay, then politicians are clearly involved = bribes. This is Zimbabwe. It’s not difficult to go to the shelf in the RBZ vault, identify the diamonds and bring them up to the office and hand them over. I’m quite sure Mr Prelea would sign an indemnity in the RBZ’s favour and hire enough security men to get him to a plane. It’s all bs, isn’t it?
Asimpleinvestor: no, I can’t. Any more than you can back up the opposite opinion. He hasn’t said whether he’s seen them but if he has, do you not think he’d have said so? If I were in his position, I would.
As to the ongoing saga, “protocols”, “process that would define the procedure” for releasing the diamonds and all these weasel words and phrases are mere obfuscation. That’s my opinion. If I could back it up with provable or documented fact, or if you could prove the opposite, we wouldn’t be having this conversation. I think that’s all that can be said, though I do wish you good luck with it. You’ve clearly got skin in the game. Currently I’ve only got opportunity cost.
When has Mr. Prelea said Vast have got the diamonds? Yes, he’s got a court order but it’s unenforceable and it’s not evidence of the diamonds’ existence. He’s never seen them and has no more idea than you or I as to whether they’re there or not.
Vast would not get a loan today against the security of this parcel of diamonds at the RBZ on these terms. Shareholders are left hoping that its existing creditors will give them another month or two - ad infinitum.
It’s taking a fatuously long time to fulfil the terms of whatever “protocols” apply, isn’t it? This is one of the worlds most corrupt countries, Vast has little or no leverage over the government. According to my version, the diamonds appear to be absent or unavailable at an affordable price. According to yours, the negotiations over their release could carry on into the indefinite future. Vast need them now. If they’ve got them, even on the terms you’re describing, Mr. Prelea wold have said so. The diamonds’ absence matters to Vast shareholders and under both our scenarios, it doesn’t appear likely they’ll be in Vast’s possession and sellable in the near term. That’s what matters. The rest of this discussion is just noise.
I really can’t agree with any of this. The RBZ Governor has been retired three months early, after nearly ten years in the job and is supposed to be replaced by the President’s nephew. It’s nothing to do with Vast’s diamonds.
If it were the case that Vast have the diamonds already, the CEO would have said so. It’s price sensitive and a false market would now prevail if he were failing to disclose it. And the diamonds are extremely important to Vast. The most recent debt rollover expires at the end of this month. Vast have consistently said that the proceeds of their sale will be used to satisfy their creditors.
The visit of the deputy high sheriff with Angus legal counsel to the RBZ to get the diamonds took place in late June/early July. Quite a long tim before the Governor was retired early. In fact he’s retired on time - he’s working his notice or taking holiday in lieu.
The timing of the release of the diamonds, whether they’re there or not, matters fundamentally to Vast.
Aimgambler123: so what is your explanation for the refusal of the RBZ to comply with a court order and hand over the diamonds to their owner? What’s in it for them?
Asimpleinvestor: just to clarify: the diamonds are probably not there. But if they are, I’m not equating the term “royalty” with bribery. I’m equating the term “protocol “ with bribery. There has to be a reason why the RBZ Governor is blocking the enforcement of a high court order by the deputy sheriff. In more reliable jurisdictions, he’d either have been sacked by now or prosecuted. They’re using the term “protocol” to explain the delays. This is nonsense. All it should need is for Mr. Prelea to turn up with a court order and for him to be taken down to the vault and given the diamonds. Well, he’s turned up with a court order and with the deputy high sheriff and he’s been given the bum’s rush. That was nine months ago. If I’m correct, either the diamonds are not there or the protocol applies and he can’t afford the sum required, or he’s refusing to pay up. In which case, he’s to be applauded. But he now appears to me to be merely playing for time. Shareholders shouldn’t complain about this: the share price is falling but at least there is still a market for their shares, for now. If he were to say what’s really going on, the share price would be below the nominal price and things would be very complicated. And something may come up, who knows?
Gizabigrise: no, it’s a bribe.
WG818: there’s also a number of applications to the EA written by AECOM on Angus’s behalf for permit variations, including one dated 15 April 2021, which stated that the condensate would be transported by tanker from the B site up to four times pre week. I don’t know what was agreed in the final permission, these things are not as easy to find as they might be.
DrMicho: yes, you have to ask yourself in whose interest it is that these diamonds were not handed over a long time ago. The only conclusion I can come to is either 1. They’re not there but went to Hong Kong many years ago, or 2. The “protocol” under which they’re negotiating the diamonds’ release concerns merely the size of the bribe demanded from Vast. Either way, Vast are screwed, aren’t they?
WG818: this is from an Environment Agency report on Saltfleetby, some time in 2022.
“From storage of production condensate to the dispatch of condensate and waste.
Annual throughput shall not exceed 5,000 m3/year (Refinery BAT Conclusion 52).”