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K3VMC: “..the comfort of an alternative strategy.. “. It’s surely simpler than that? Mercuria are not playing ball, they want their money back and they want their royalty money. They’re the senior lender. The only charges on Angus debt now are on their and the smaller Knowe loan. They can veto further borrowing by Angus. Equity finance is the only alternative and it may result in a doubling of existing equity and a bid at a much lower price. This is a pretty risky investment now.

HITS: It’s hard to interpret the EGM statement as anything but extremely bearish for ordinary investors here. I think they’re going to experience an eye-watering stuffing in the next few months.

Ocelot: in my earlier post this afternoon, for “September” please read “October”. Apologies.

Ocelot: well, it’s the usual ambiguity from Angus, isn’t it? The Investor Questions are dated 1 September, and answered 2 September. Then, investors look at the top of the page and they find this statement, that other questions will be answered by close of business on 3rd. So, many investors were expecting further answers by 3rd. It is probably an oversight, they left this sentence at the top of the page by a rather careless accident. But you can surely understand people’s confusion?

Ocelot: this post of yours falls a long way short of your usual sunny optimism as regards Angus’s prospects. Has something changed?

Yes, bubblepoint. Unless the author of the Replies to Investor Questions is particularly incompetent, it reads as if the Global Re-Financing is a dead duck and has become merely a re-negotiation with Aleph of their own lending terms as and when their £6mm. loan matures. Mercuria will have to agree to any new settlement between Angus and Aleph. I can see no reason why Aleph would want to accept terms less generous to themselves than the existing terms, if Mercuria are not a party to the new loan agreement. I imagine Mercuria will happily accept an immediate repayment of their remaining loan and the equally immediate regular payment of their royalty. And good luck to them, well played. Shareholders in this scenario will be stuffed yet again.

Bubblepoint: very often with Angus it’s what they don’t say in their Q&A’s that’s important.

In the 2 October Q&A they said this, with reference to the Global Re-Financing: “We announced last week the conversion of £3 million of that debt into equity and are actively working to refinance the remaining £6 million bridge loan before the end of this year.” No mention of the Mercuria loan, then. Have Mercuria demurred or is this an infelicity in the wording of the answer? It’s hardly a Global Re-Financing without the Mercuria loan, is it? Perhaps they should clarify the current situation.

I’ve had a look at the two most recent Report and Accounts (the next one is due early in November).

Re the diamonds, I can’t find a reference to them in either the 2022 or 2021 Reports. I may have missed it I suppose. But I’m left asking why such a potentially large realisable asset has only been brought to shareholders’ notice at a time when Vast are trying very hard to find a way of repaying potentially ruinous debt.

Re the debt, there are still three Charges outstanding, the first dating back to early 2018 and all in favour of Mercuria. I note that the RNS today refers to Tranche A of the Mercuria loan. Does anyone know if there are other tranches outstanding? In addition, the statement today says that the terms and conditions of the loan remain unchanged. However, as far as I’m aware, advisory fees, agency fees etc. do not constitute part of loan terms and conditions. They’re negotiated separately with the company’s advisers - brokers, NomAds, PR firms etc.

Vast have got a welcome 61-day repayment extension but it looks as if it’s merely a deferral and you have to ask yourself where they’re going to come up with the money required within the next two months.

Bubblepoint: you’re being excessively kind in your comments about Malcy. His interviews are no more than a series of embarrassing, soft, fawning questions, with no follow-up when his interlocutor fails to offer a truthful or meaningful reply. Cringeworthy. His comments contain little or no analysis, they’re merely a re-hash of the company’s statement. Still, the ocebot likes him.

Filtered.

Would you point out where in the RNS the word “recent” is to be found?

Mickey1122: the diamonds are either gone long ago, most likely found their way to Mrs. Mugabe’s Hong Kong diamond cutting firm (yes, really) or else they're in the RBZ awaiting a massive bribe to allow them out, which may be what is meant by the term “protocol” in this context.

Shls3834: if they don’t agree new terms for the settlement of the overdue debt, Vast will be in the hands of the lenders. The lenders won’t want to run mines (which is, presumably, why this is all taking so long), they’d prefer to get their interest and capital repaid on time but if that’s not looking likely, asset sales under new owners could be a possibility. It would depend on how the very smart people at Mercuria see their best interests being served. Vast shareholders are not within the lenders’ remit. I think most likely is an extension but on terms (conversion price, royalties on production, higher interest?) quite unfavourable to Vast shareholders. Even that would be merely another extension. Without the diamonds, it will be the same again by the end of the year.

What’s going on on this chat board? Have people actually read the RNS? Nothing is described as imminent. All that sounds happening is that Vast are in talks with the lenders about a further extension. Don’t you all understand that this is going to cost them? As for the diamonds, Vast don’t appear to have made any progress in the past six months. They and the RBZ are merely working on the protocols for the diamonds’ release. Good luck with that, then. You’ll be made aware of the cost of the delays to Vast before there’s any progress on the diamonds. It’s still all about these overdue loans, isn't it?

Bubblepoint: re your post, the no. of shares in issue at end-March 2019, two month before Angus’s initial investment in Saltfleetby, was just short of 459 million. It rose to 538 million in the summer of 2019. The share price in March that year was about 4p, down from 9p six months earlier. So the market capitalisation now is similar to the market cap in March 2019, but with something like seven times more shares in issue. That’s dilution for you. People on here used to laugh at UKOG.

In my view, these answers to Investor Questions are merely complacent and obfuscatory and don’t answer the questions. I take Bubblepoint’s point about a large equity issue to pay off all debt but the fact is, the replies to these questions don’t support a bullish view of the likely future share price direction, do they? No firm dates re financing, nor re the permanent flowline, nor re the planned compressor. The comments on the flow rate are quite worrying, I should say. Flow rate was predicted from the start to decline by a compound 10% p.a after year one. It will get more expensive to get the gas out too. Mercuria will keep their 8% of turnover royalty, whatever happens - or be paid a capital sum to buy them out of it. It’s the Directors’ duty to advise themselves of significant shareholders’ holdings and to inform the market accordingly. They’re avoiding any comment on this.

I wouldn’t be looking forward to the next RNS re the Global Re-Financing, if I had a large position in this.

Well yes, HITS, though for clarity’s sake, the conversion of the £3mm debt plus interest on 28th September was at a low cost to the lender, who got shares at a far lower price than the earlier-agreed 1p floor, on top of usurious interest and roll-over fees over the six-month life of the loan. But it was very expensive in terms of the dilution of the % ownership interest of all the existing shareholders.

Yes, you’re quite right in everything in your post and yes, you’ve correctly identified the explanation referred to in the final sentence in my earlier post.

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Onetomany: this won’t do, will it? Merely repeating a recent statement by a generally uncommunicative management doesn’t help anyone.

If the Global Re-Financing goes through, it’s true that Angus will be repaying expensive debt. But they’ll be taking on even more debt to do so. Yes, the rate of interest on the larger resulting debt would be at a lower, though still very high, rate but the Mercuria 8% royalty will apply immediately, making the new loan in net terms considerably more expensive than the loans it replaces. And there’s every chance that any new loan from the Aleph/Kemexon consortium may have a convertibility option, which would enable them to establish control and to make a low bid for the rest. And why are negotiations on the new loan taking so long? I know that Angus has lost its corporate finance expert recently, but it’s really not that complicated.

In the absence of any information from this tight-lipped management, I’m prepared to believe that the recent drop in gas flow is due to the installation of the new permanent pipeline and the concurrent regular maintenance work on other parts of the plant: the plant is expected to be idle for c. 36 days per annum for maintenance, it makes sense to do this concurrently with installation of new kit. But from now on, investors can also expect annual declines of 10% in gas production from this already heavily-depleted field. It’s all there in the CPR. The cost of drilling further wells may well prove uneconomic, so investors have probably seen the best of gas flow already.

Why did Angus agree to convert the £3mm. loan to equity at 0.66p? The RNS on 28 March set a floor for the conversion price of 1p, as I read it. That loan has turned out to be, in effect, an extremely expensive share placing as far as existing shareholders are concerned. Hasn’t the new CEO said that new share issues will be made only to finance “inorganic” investments etc? Why did they not wait until they’d got the money from the Global Re-Financing? I can think of only one explanation and it’s not a very favourable one for shareholders.

Asimpleinvestor I missed until now your reply on 11 September to my query about share swaps. Thanks for the info.

Well, this statement provides no news on the debt. You can assume that Vast have been talking to Mercuria for a while now about their financial position and that the result of their talks must be very close, certainly by 29th. In fact, it could be communicated at any time now.