Member Info for OofyProsser

Oofy - what was the outcome? Zilch: Nada. Rien. Just the old Harare two-step. What did you expect them to say? “I‘m afraid we can’t actually lay our hands on them at the moment, old boy?” “A lady was in here a few years ago with some burly men with big guns and a request from the President’s office that we hand them over to her? Oh, and kindly don’t give her any of that “protocol” stuff. Just put them in a nice bag and order her a car for the airport”?

Asimpleinvestor: well, clearly the Harare High Court judges are unaware of the law. Why would they send a senior enforcement officer of the Court in the person of a Deputy Sheriff to accompany Vast to the RBZ to collect their diamonds if the Court’s ruling is legally unenforceable?

The line of least resistance for the RBZ would be to comply with the valid court order and hand them over. There’s a reason they haven’t done so and it’s unlikely it’s to do with the application of laws whose enforcement, in the absence of a separate court order, is nothing to do with them. More likely, someone has removed them and had it away on his toes.

Asimpleinvestor: I agree with you.

Joeydavison: perfectly correct and mildly amusing.

Bubblepoint: if the £6mm. bridging loan goes to confetti, as you suggest it may, those shares will, on the face of it, go into the hands of a concert party and would trigger the need for a bid. If this is the case, it would save Kemexon/Aleph a lot of money to withdraw from Global Re-financing loan talks and demand the repayment of their bridging loan, then to agree with Mercuria the exercise of the covenants on their senior loan. Otherwise they’d have to bid the highest price they’d paid over the previous 12 months. I should imagine this would involve Kemexon/Aleph paying off the outstanding balance owed to Mercuria on the senior loan and agreeing to the immediate enforcement of Mercuria’s 8% of turnover royalty. Still much cheaper than bidding for the company at a price far higher than the prevailing market price. I don’t therefore think that small shareholders should get too excited about their prospects in the event that further loan finance proves impossible to negotiate.

JD-Nau: I think you should look at the cash flow statement in the interim report. £8mm. of capital raising over the period and a requirement for another £3mm. in bridging loans. Angus were not throwing off large amounts of profits from which they could repay loans, they were adding to the shares in issue (dilution) and to their borrowings big-time. The interim accounts themselves were accompanied by the news of the requirement of another £6mm. in bridging loans at usurious interest rates and expensive rollover costs. Your £16mm. is turnover. The sidetrack has cost them (probably) £12mm and counting and their current annual running costs are far higher than suggested in the interim report. They need to drill a new well in each of the next two years. The convertibility terms of their new loans, warrants etc. give their lenders a back door takeover opportunity in the event that Angus cannot meet their repayment terms. And the gas flow rate is approaching the deadline set out in both the Wingas report and the CPRs when it can be expected to begin its 10% annual decline. And the Mercuria 10% of revenue royalty will most likely kick in next year.

Other than the above, it looks a good investment. But only if the new wells to be drilled are commercially successful, there’s a sustained high gas flow and the gas price enjoys a substantial rise.

JD-Nau: it’s true that Angus under its previous management managed to build the plant and bring it into production. But you can solve any problem if you merely throw enough money into it. It doesn’t make it economic. Angus still has massive loans to service and repay, obligations to an existing major shareholder, further capital investment requirements to resolve already-identified critical issues relating to future gas flows, hedge contract obligations and a depleting field. And it appears they have problems now, the fundamental causes of which have not been divulged to shareholders. And the deadline on the re-financing of their usurious 6-month bridging loan is in January. Rule 9 of the Takeover Code, covering, among other things, the price to be offered in a takeover, can be waived if the target company is in financial distress. There’s no protection there to small shareholders, whose interests are deemed protected by the Company’s Independent Directors. Have a look at those in Angus’s case and see if you feel protected.

JD-Nau: in that case, I apologise. I do think, however, that the tone and content of your posts suggest a degree of naivety about Angus. They’re similar to lots of posts in favour of the Earl of Lucan up until about this time last year. Your confidence in Mr. Kaye is identical to others’ confidence in Mike Wells, who previously held his post. Where has he gone, by the way? Similarly, your confidence in Mr. Herbert. The Earl of Lucan was regarded as a financial expert in the same way as Mr. Herbert is now regarded as an oil and gas expert.

There is an eminently credible alternative explanation for Angus’s current situation but it’s to be found elsewhere, not on this site. Angus has very pressing financing needs. None of us knows the intentions of Aleph/Kemexon grouping, other than that between them they hold close to the number of shares required for a bid. If that’s their intention, they don’t want the share price any higher. Mr. Forrest has a ton of shares left to sell.

You have to study this company in the round. The financial aspects are at least as pressing as the operational aspects.

NeoGeo: to justify making the kind of remarks that you have about WG818 you’d have to have a reasonable amount of industry knowledge. Have you? WG818 has. As far as I can tell, either of he or Bubblepoint may be correct on the detail of what is happening at Saltfleetby currently. It doesn’t matter so much about the detail, however. They appear to agree that there’s a serious problem that is going to require serious money to resolve.

Re JD-Nau, I’ve taken the trouble to look up his posting history and it appears that Angus is one of a number of companies on which he comments. So I take back my earlier speculation that he may be an Angus employee. More likely, he works for a friendly broker or NomAd.

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.