Member Info for OofyProsser

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.

Yes, HITS. Any loan agreement with Trafigura is going to set a fixed price for an undisclosed proportion of Angus’s production, at least until the time when Angus has to apply for a continuation of its licence at Saltfleetby and the gas flow has slowed to a trickle. And yes, the terms of the new loan which is being taken on to make Angus debt-free should reward close analysis - if it comes about. Remember what happens if it fails at the last hurdle and the loans it’s supposed to replace can’t be re-negotiated. It’s all there in the RNS’s.

WG818: it appears entirely possible that events will play out in a way that will offer the (by then) majority shareholders the chance to set a far lower takeover price than 0.40p. I've said for years here that’s it’s all about high gas price and sustained high production if Angus is to prosper. It’s not going to benefit much from a higher gas price now, by the look of it, and production doesn’t look too good either. New wells are unaffordable at Saltfleetby now, so that's out. Angus is starting to feel like a pet shop in Notlob, or its palindrome, in 1970-odd.

WG818: I’m not sure that gas prices will be fundamental after the signing of the Trafigura fixed price offtake contract - other than to Trafigura.

Onetomany: I think you need to wait and see the terms of the new loan, if any. And what AIM CEO has ever offered the opinion that his company deserved a lower market capitalisation?

Apologies, HITS - on re-reading your post you do clearly refer to the 8% royalty.

I think shareholders also should bear in mind that the heads of agreement do not amount to a done deal, and any delay beyond 21 January will likely incur further fees to Aleph.

HITS: you neglected to mention the 8% of turnover royalty payable to Mercuria once 85% of the senior debt is repaid. Or the fact that the CPRs predicted a fall-off in offtake after 18 months and of 10% p.a. thereafter. I agree completely that the devil will be in the detail in any new financing, notably in the pricing of the offtake agreement. The money you detail has gone down the apparently bottomless pit of the sidetrack and the temporary flowline. That followed a hideous overspend on the plant, in spite of which it’s apparent that key parts of the newly installed kit are second hand and unreliable. The plant was producing more than 9.2mmscfd last June. It’s now at 6.8-7.2. The temporary flowline is still apparently in place, as must be the teams of external experts working on it. Any talk later this year of further drilling ought to chill shareholders to the bone. Wingas got this field right. It’s heavily depleted and unlikely to earn an economic return. They got a good deal from Forum/Angus. Forum subsequently got a fantastic deal from Angus. In spite of decent sales of high priced gas sales, Angus shareholders have recently had a £7mm placing, a £3mm bridging loan, a £6mm bridging loan, another £3mm bridging loan, the interest paid for by their gas sales and conversion (of £3mm of it all) to equity. The new financing is bigger than the remaining loans and is supposed to pay in addition for a number of items any of which will far exceed its proceeds after retiring the remainder of the existing loans.

WG818: and one notices the possible delay in signing the new, enlarged, debt deal into February, which should allow Aleph another fee on the existing £6mm bridging loan. Unless they agree to convert into equity and bid for the rest.

Angus needs high gas prices and high, consistent gas production. Talk of a dividend is premature, by miles.

Is that right, onetomany? I wouldn’t mind seeing that: buy a few and sell them back to the market maker for their higher price. Nothing like it.

Ocelot: Angus are planning to take on more debt, not less. The p&l may or may not benefit from the terms, but given the nature of the counterparties and the fix Angus are in, I wouldn’t hold my breath on that.

Well, Ocelot, you underline neatly the trouble Angus are in. Any kind of agreement is better than nothing, apparently. The alternative is an extremely low-priced takeover by parties interested in storage.

Bubble point: yes!

Bubblepoint: yes, I agree with this entirely. And it’s not nearly a done deal. Something needs to be signed, however, before the expiry next month of the £6mm. bridging loan. Between Mercuria, Aleph and Trafigura, Angus shareholders seem to be facing a squeeze.

Bubblepoint: Trafigura plans to be the Offtaker. If they’re buying all the gas, what purpose does a hedge arrangement fulfil, other than to offer them an even higher profit on their investment? Their judgment on future gas pricing is likely to be better informed than Angus’s. If Angus insists on arranging hedges, they will be little more than a punt on future prices and production. I don’t think they can afford to do it.

The statement says: “physical fixed price contracts will be entered into on part of the production to cover the existing hedge position until June 2025 and for risk management beyond that.”

Not hedges then. Fixed prices on part of Angus’s production. And whose risk, Angus’s or Trafigura’s?

And none of this is a done deal, or anything like it. The wording is a bit like the wording of the November 2020 RNS re the planned terms of the Mercuria deal. That wasn’t signed until late May 2021. Angus has signed Heads of Agreement. Mercuria has agreed to Angus talking to Trafigura. That’s about all, it seems to me. I think that if an agreement results, it’s likely to be on very expensive terms as far as shareholders are concerned.