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Sandy: it is perfectly possible that the lenders won’t want to take over Vast’s assets next month. More likely, perhaps, is something like the imposition of big royalties on Vast’s future turnover from its mines, such that existing shareholders will be looking a very long way into the future for a return on their investment. The lenders have got Vast over a barrel, it’s they who will make the decisions next month. As for the suggestion that Vast’s lenders will get such a bad reputation, if they exercise their rights under their loan covenants, that no one in future will want to borrow from them: well, it’s open to Vast to negotiate better or similar terms to their existing bank loans and repay their lenders from the proceeds. It doesn’t look as if alternative lenders are forming an orderly queue to accommodate them though, does it?

Well, they can’t have another placing while the share price is at this level. I suppose some may take comfort from that. I did say yesterday that Vast needed more equity capital, not debt, but they need a lot more than this and this appears to be the last arrow in their quiver as far as share issues are concerned.

Look at all the things this infusion of £1.25 gross is supposed to cover (no mention of the cost of the issue). It merely tides them over to the end of February. The comment on the diamonds offers no comfort on whether the latter are there in the RBZ or not, nor on whether Vast will ever get them.

It’s less than five and a half weeks until the debt deadline. Which as we all know, is not a deadline, it’s a moveable feast with not the slightest hint of late payment. Only this time looks as if it may be different.

I’m realistic about this, not negative. And as I’ve said, to argue about terminology over clearly overdue loans is merely to bandy words and I’m not going to indulge in it any more. Well have to agree to differ. The point is, they’ve probably got five and a half weeks before they’ve got a problem either with much tougher terms or with the loans being called in. That’s not negative nor inaccurate. It’s how it is.

I’m sorry, Sandy, you’re merely bandying words re the debt. It’s already 8 months overdue for repayment. The repayment agreement stipulated May 2023, there has been a series of extensions - grace periods really. It doesn’t matter how you describe it though, it appears that the lenders are getting impatient.

Who’s going to lend to this? All the money raised would be going to pay off earlier lenders, not to grow the business. The terms of any new loan would be eye-watering and unaffordable. Vast needs more equity capital, not bigger, more expensive loans.

If Vast management are pursuing alternative sources of finance, it would be helpful if they’d discuss them in more specific terms either in an RNS or a televised chat with one of their PR people. As for commercial confidentiality, you can’t rely on any announcement that hides behind that kind of smokescreen with a company at this point in its fortunes. And look at all the exclusion clauses at the bottom of the RNS’s in any case. You can’t rely on a single thing, other than what has already happened and been revealed p in detail.

Clearly, you’re prepared to believe whatever Mr. Prelea offers in RNS’s and televised chats. You may be proved right. I don’t believe any of it in the case of a company in the perilous position in which Vast finds itself. It seems you also believe there’s a parcel of diamonds on a shelf at the RBS just waiting for someone to say the word before its release to Vast. I don’t. I suspect that Mrs. Mugabe or some other ruthless, unprincipled, greedy type has had it away on her/his toes with them ages ago. And unlike you, I think that obtaining alternative finance with which to repay Vast’s creditors in the absence of the diamonds is a difficult job. In my view, any activity in which the Vast Board is currently engaged other than trying to get the diamonds out(!) or finding alternative financing is mere displacement activity. I include the recent RNS’s.

I do accept that I may be wrong, though. There’s a tiny chance...

Sandy: unless the share price takes a substantial upward leap, allowing another very big placing, it appears extremely unlikely that a source of finance sufficient to repay the loans according to the revised schedule will be found. I suppose one could argue that’s it’s no more unlikely than that the absent diamonds will suddenly be produced but there’s little comfort in that.

Re your point 2, In my view, the wording of the most recent RNS, which you quote, relating to the debt was couched in different language from earlier ones. I would be concerned, it I were a shareholder here. And in any case, the final phrase “finalise ongoing repayment initiatives” refers to the parcel of diamonds.

And you make my point for me: when a company is five and a half weeks from hitting the buffers, announcements which exclude the source of the commodity it claims it will be intermediating for a commission and the name of the Swiss investment company who has given them this contract don’t somehow carry much weight.

Re your point 1. the distinction is irrelevant, any discussion on this would be mere bandying of words.

No, Sandy, I’m more of the opinion that something is missing from the RNS that should explain the apparent anomaly. I don’t impute any particular motivation nor point the finger at any one party. But the anomaly remains unexplained. Any of your conclusions may be correct. If so, however, it merits clarification. My experience in AIM-listed companies generally is that if their announcements require a leap of faith on the part of small investors, those announcements are not always the good news that they at first appear. You’re a believer here, I’m not. I think investors here have five and a half weeks before they will get a nasty surprise. Vast have admitted on numerous occasions that their ability to meet the terms of their loans, which are way overdue, depends solely on the receipt and sale of their parcel of diamonds. Five and a half weeks.

It’s a matter of volumes, isn't it? 2 tonnes of concentrate per month =24 tonnes per year. Finland seems to produce less than 1.5 tonnes of refined platinum per year. Yes, the other PGMs within the concentrate are valuable, but the PGMs in the concentrate total 15% of the weight of concentrate. 15% of 2 tonnes per month is 300 kilos, or 3.6 tonnes per year. That, subtracting other PGMs, must be close to Finland’s total annual refined platinum production. I may have got this all wrong, in which case I’d like to be corrected - I don’t like misleading people. But I think the question was worth asking, which I why I asked it.

Well yes, Sandy, but the most recent platinum production data I’ve seen for Finland is 1.4 metric tons per year. I realise that the contract is for concentrate, and PGMs, not just platinum, but if the data I’ve seen is current, how are Vast going to find 2 tones per month? And why would anyone want to use Vast for such a purpose? Or is there, as Dorothy Parker is alleged to have observed, less to this than meets the eye? Maybe there’s some more platinum being produced somewhere else?

Where in the EU are PGMs produced?

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.