George Frangeskides, Chairman at ALBA, explains why the Pilbara Lithium option ‘was too good to miss’. Watch the video here.
Ginsky, defending shareholders rights over Barracuda in court is only beneficial to shareholders if ADM win and from everything that I have seen so far I cannot see how they are going to win as I cannot see when and how KONH can ever have paid NHNL any money.
It is entirely possible that instead of getting any money back Osa is just throwing more of it down the drain. It is a relatively easy thing to get a temporary injunction to stop somebody selling an assets but a completely different thing to win a court case showing you own that asset.
Obviously the company have access to much more information than is currently in the public domain but from what is out in public I just cannot see how ADME or KONH could have paid any money to NHNL. And, if they have not paid any money then they do not own any of NHNL.
The key thing here is, in my opinion, that even if ADME knew fine well that they had no claim on NHNl then they would have to commence a legal case or they would effectively be admitting that they had been lying to the market all this time. I am not saying that this is what they have done, I am just saying that if they did know that they were in the wrong they would have to take this course of action anyway.
Basically, on it’s own the injunction and legal action mean nothing. I will be interested to see if the information that Align have promised to publish at the weekend sheds any more light on Barracuda or not.
In all seriousness, I am leaning towards Jennings and what Dan has accurately described as the cash-out option.
I don't trust Osa to be straight with shareholders as he has consistently shown that all he ever wants to do is to give the bare minimum amount of information that he has to and if he can avoid even that then he would prefer it. I simply don't see how the company can continue with him at the helm.
Keeping OSA
PROS: No Richard Jennings and Align.
CONS: We keep Osa.
Getting rid of OSA
PROS: We get rid of OSA
CONS: We end up with Richard Jennings and Align.
It is like being caught between the devil and the deep blue sea.
Spikeyj, I love that idea, except for the fact that it would leave ADME with no management whatsoever. Would no management be worse than the existing management or Richard Jenner?
Dan, you are absolutely right, I don't know how I missed that, my apologies. It should have been released last night though, especially as Winnifrith had already leaked that it was happening - but that is not to excuse my own incompetence, Sometimes I wish there was a delete message button on this forum.
I will now begin to gradually accumulate some shares in order to be able to participate in this vote - buying on dips if possible.
Assuming that Winnifrith is telling the truth, and I think that he is as it seems clear to me that it is both Align who called the EGM and Align who tipped off Winnifrith, then why haven't the company released an RNS letting us know that this is happening.
It is another example of how ADME under Osa deliberately keep shareholders in the dark and only give out even the slightest morsels of information when they are forced to. Shareholder communication and transparency is never going to improve under Osa as he just wants us all to sit down, shut up and hand over money when requested. He doesn't care about us at all.
I sold out my ADME shares in October after failing to get any sensible answers from the company about Barracuda but as soon as they issue an RNS announcing the vote I will buy back in in order to participate. I am not doing this until I have an RNS confirming the EGM though as I do not want to hold shares here if Winnifrith is wrong.
With the right management this company could be successful.
According to Tom Winnifrith there has been an EGM called to sack the board. Apparently the motion calls for the The immediate removal of CEO Osamede Okhamino and also Richard Carter and Oliver Andrews. It proposes that they are replaced by Richard Jennings - so I guess that we can all guess who put forward the motion.
https://www.*************.com/views/59614/breaking-sack-the-board-gm-called-for-adm-energy
Obviously this is Winnifrith so it is not 100% certain to be true but it would also be a stupid thing for him to lie about if he is not sure, and he has clearly been tipped off by Jennings himself.
Is Jennings and better than Osamede? He's a terrible investor but honestly could he be any worse at running the company?
Which way will you be voting?
Dan,
This is just my speculation but I think that what must have happened is that:
1. KONH did have an arrangement with NHNL to buy a stake in them - this is effectively acknowledged in the letter that Tom Winnifrith published where NHNL were demanding a payment of $1.75 million from ADME for “project funding”.
2. Based on the arrangement that Zenith Energy have subsequently announced whereby they are paying $20 million (presumably the entire cost of the well) for a 42% stake in NHNL then one would expect that the deal made between KONH and NHNL would be fairly similar – ie you get us $20 million funding to drill the well and we give you a large percentage of the company.
On this basis you would expect the $1.75 million to simply be the first instalment of at least 10 or 11 more. After all it is only 9 months since ADME first mentioned the deal and Zenith Energy announcing that they have an option deal. As far as I can tell, nothing has changed in this time period and so there is no reason that the price would change much either.
3. We know for a fact that KONH and ADME have not paid any money to NHNL partly because NHNL’s document has told us that, but mostly because ADME would have had to announce if they did pay anything – and they haven’t had the money to anyway.
4. So in my opinion KONH had an option to buy a stake in NHNL but never cam up with the money and so never got their stake. I assume that they were hoping that ADME would be able to raise the money to fund the drill and then they would get their share out of this – but obviously it didn’t work. So in essence ADME bought 51% of a company that was worth nothing.
5. The big question is how much ADME knew about this (ie how much due diligence they did). IMO, we are never going to know as, whatever the truth, they now have to say that they believed that KONH owned NHNL. This may make them look incompetent at their due diligence but it is better than the alternative which is that they are shown to have misled the market.
As I say, this is all just my own supposition and of course it is possible that NHNL are lying through their teeth and have a watertight agreement with KONH that they are trying to get out of. However, looking at the evidence that we have it front of us I find this unlikely. I think that ADME has 100% lost Barracuda but time will show if I am right.
It doesn't feel like a pump and dump to me - more like a propping up and stabilising of the share price by those who had a lot to lose if it kept going down.
Dan,
You made a very convincing argument that the claim in the March 23rd RNS that the statement that: ““KONH holds, through its subsidiary Noble Hill - Network Limited ("NHNL"), a 70% indirect interest in the rights, benefits and obligations under the RSA relating to the Barracuda area of OML 141” was just a one-off mistake and it was corrected by omission in subsequent announcements.
However, I have just been looking at the company’s Twitter and as recently as November 30th they confirmed this position by tweeting that:
“#ADME notes the recent announcement made by Zenith Energy Limited in respect of its option agreement for OML 141 risk service contract
$ADME confirms that there has been no subsequent change to KONH's position as majority shareholder in NHNL”
https://twitter.com/ADMEPLC/status/1465604645733212160
It is clear that the company believe that their stake in KONH gives them control over NHNL yet at the same time NHNL have proved beyond doubt that KONH has no ownership of NHNL. It is looking to me more and more like ADME did not do proper DD and bought a stake in a company (KONH) that had no assets…
Dan, what evidence do you have that Calabar Capital had a contract for the RSA? Is this purely a supposition based on the fact that Calabar Capital ended up with all of the ADM shares or is there anything more concrete than that?
It sems unlikely to me that CC have any ownership of the RSA, not least because they were incorporated only a day before KONH on 18th Feb 2021 and whereas the nature of business of KONH is described as “09100 - Support activities for petroleum and natural gas extraction” CC is described as “70229 - Management consultancy activities other than financial management”.
It looks to me as if CC was set up purely as an entity to take the money that was gained from selling 51% of KONH to AMD.
Whatever way you break it up, Calabar Capital does not hold any stake in NHNL any more than KONH does. But you are absolutely right, MADE need to clear up the absolute pigs ear that they have made of the entire ONL141 transaction. They only ever release any information when they are forced to and they increasingly come across like a collection of individuals who have a lot to hide.
Now NHNL have published papers showing that ADME’s claim that KONH owns NHNL is nonsense (and has flat out said that it has no business dealings with KONH or ADME) then the onus is on ADME to explain why it believes that it still has any claim to the RSA of OML141.
Dan, the RNS did state that NHNL was a subsidiary and it has never been corrected.
Even if you look further down your post it says: “Post period, we acquired a controlling interest in a Risk Sharing Agreement (RSA) for the development of the large-scale Barracuda Field.” This absolutely backs up what they said before. The have a controlling interest in in the RSA because they control KONH who in turn control NHNL.
Except they don’t because it was all untrue…
Think about it for a moment. If what you are saying is correct then:
1) If KONH was only created as an SPV for the transaction then why did ADME pay $800,000 for shares in it?
2) If KONH was only created as an SPV for the transaction then we know that the maximum amount of money that could ever have been paid to NHNL is $250,000 as the other $550,000 was issued in shares to Calabar Capital Limited. I would also be very surprised if the $250k didn’t also end up in the same place but supposing it hasn’t then the $250k could have gone to NHNL. However, what would this buy them? Absolutely nothing.
We know that NHNL were demanding a payment of $1.75million from KONH in July 2021. We also know that they have asked for a $20 million payment for a 42% stake in the company from Zenith. Even if the $250k was paid to NHNL (and I am 99.9% certain it wasn’t) then it would not have bought them anything.
So now, by your own rationale, we have a company that when it set up “could therefore have owned nothing” and was then provided with nothing to close the deal. It still doesn’t work.
So whatever way you break this up then KONH and ADM have not acquired anything. Either KONH were meant to own NHNL and they didn’t or they were meant to buy it and they didn’t.
Whatever way it ends up AMD own nothing because KONH have paid for nothing. They have simple received some money from ADME and moves this into a completely different corporate entity…
Dan it is true that ADM never bought a direct interest in NHNL but they did buy 51% of KONH and then described in their March 23rd RNS that: ““KONH holds, through its subsidiary Noble Hill - Network Limited ("NHNL"), a 70% indirect interest in the rights, benefits and obligations under the RSA relating to the Barracuda area of OML 141”
Given that the definition of the word "subsidiary" in business is "a corporation or company owned by another corporation that controls at least a majority of the shares. " then by acquiring 51% of KONH (and amusingly making it a subsidiary itself) ADME were purchasing the majority of NHNL, just in an indirect manner.
So this is the issue. In announcing that NNHL was a subsidiary of KONH they used a word with a very specific meaning and NHNL have just provided the documentation to show that the statement was not true.
I cannot understand how anybody can see this any differently. It is the crux of the whole matter and will be very easy to prove if any money changed hands or not. However, it is already clear that KONH and ADM did not pay NHNL any cash as neither of them had any and no payment was ever announced.
The whole thing stinks.
Well this fits into the concerns that I had about the claim in ADME’s claim in their March 23rd RNS that ““KONH holds, through its subsidiary Noble Hill - Network Limited ("NHNL"), a 70% indirect interest in the rights, benefits and obligations under the RSA relating to the Barracuda area of OML 141”
As I have mentioned on numerous occasions, the old NHNL website always claimed that they were a 100% Nigerian owned company. In addition to this, Nigerian law would not have allowed NHNL to be majority owned by a non-Nigerian company so this inconsistency was always a huge red-flag that something was not quite correct with this whole deal.
NHNL have now gone public with the fact that they never sold any of their shares to KONH and have published the confirmation from the company secretary that there are only two shareholders in NHNL and that neither of them are KONH. This confirmation leaves ADME in a very awkward situation as it basically appears that they spent $250,000 in cash and $550,000 in shares to acquire 51% of a company that was completely valueless. This can only have happened for one of two reasons:
1) They were duped by KONH when they invested in the company and genuinely believed that KONH did own NHNL. But this begs the question of can they not have done proper due diligence when they were handing over that kind of money? Though, as tresha99 has pointed out the BoD do seem to have form for a history of poor DD.
2) That ADME acquired 51% of KONH knowing that they did not own NHNL and were therefore party to defrauding shareholders.
I find it almost impossible to believe that number 2 can be true. Awful and incompetent as our BoD can be they are not out-and-out criminals. But in the case that option 1 is true then they have handed $800,000 to a company that was completely valueless. You couldn’t make it up – it is like they got an email from a Nigerian “Prince” in a 419 scam and fell for it. Surely they must have asked to see copies of contracts etc.
However, regardless of the fact that ADME may have been duped by KONH back in March they have (according to the NHNL website) known that KONH had no ownership of NHNL and yet they have continued to hide this from shareholders. They have not mentioned it in the annual report and they did not mention it when they were raising money. In fact, it seems that any information literally has to be forced out of the company by AIM regulation.
Well the writing is on the wall now. If everything that has been said on the NHNL website is true then the company must surely be heading for suspension.
ocelot - exactly. If companies had to respond to every rumour about them on twitter then they would spend their whole time issuing RNS releases about gossip. If there is a major rise then fair enough, but standard trading movements I don't think warrant an RNS. That said, there are other companies that point-blank refuse to release an RNS even when they really should so it's hard to know what the actual rules are.
Also, at what point does an enquiry of interest in purchasing an asset become actual “news” that should be announced to the market anyway? Surely it can only be when a formal offer is made/mou signed etc? Presumably this is exactly what AIM companies have nomads - in order to ensure that they release news when they are meant to. I bet without the nomad insisting that most companies would never tell investors anything.
I think that HITS does have a point, we do need to be careful not to get too excited by unsubstantiated rumours of takeover values. However equally we need to be careful to ignore those who claim that Saltfleetby will fail on no evidence either
At the moment it looks to me like Saltfleetby will be worth a very large amount of money to Angus over the long term and although there is no evidence for this current rumour I do think that it is entirely possible that there will be approaches by other entities to purchase it as time goes by.
A year ago, Saltfleetby was valued in excess of £12 million. We know this because Aleph et al loaned the company this money secured against it. Relaistically, this also means that the valuation that Aleph really put on the property was somewhere between £18 and £24 million as they would not lend against 100% of the asset value.
Now a large amount of work has gone into the project and it is much closer to delivering production, the value of the asset has clearly gone up and it will rise further still once production commences and up again once a successful sidetrack is completed.
The advantage that Angus have is that the longer that they wait the more any buyer is going to have to pay to acquire their share of Saltfleetby from them. Conversely anybody who does want to acquire it would be best advised to do it earlier while there is still an element of risk rather than wait and pay a premium when the risk has gone. But once the risk has gone and the sidetrack is completed up to 10 mmscf/d why would Angus want to sell it anyway? It would be generating them £13 million per annum by 2022 with all the debt already paid and at this point it would clearly take a really big offer to be worthwhile selling for.
Whether the rumour is true or not, I can totally see why another entity would see good value in acquiring 100% of Saltfleetby for £40 million. However, I am not sure that this would represent good value for Angus compared to what they could generate if they did not sell.
Oh, and they also said that: "If a Nomad resigns, then a specific announcement is required" so there need be no more speculation on this matter.
Cairn are definitely still in place as the nomad and an RNS would need to be released if they are not.
Yes ADME do definitely still have a nomad as I have had an email response from the nomad this morning confirming that this is the case. They explained that yesterday's announcement was a non-regulatory announcement, and it is therefore customary that the Nomad’s details are removed.
So 100% Cairn ARE still the company nomad. This is straight from the horse's mouth.
Another good spot Spikeyj - so at the moment we are in limbo. I will let the board know if I receive a reply from Jo Turner confirming if Cairn are still the company Nomad.
Can someone email the company and see what they have to say about this please. I would, but they never reply to me.
That is indeed a very good spot Dan. It is interesting that Cairn were mentioned in the RNS on the 29th November but have not been mentioned this morning. It seems a bit coincidental to be an error.
I finally got a reply to one of my emails from Jo Turner at Cairn on the 29th but I have not received any reply from him to the email that I sent yesterday. The trouble is that they are so bad at replying anyway it really means nothing on its own.
I will send him another email asking if Cairn have resigned, but I won't hold my breath for a response.