Member Info for redwineday

Gil has promised news on drilling in 2021 from last November when he said early in the new year. Then April, then only a few days ago, before the end of Q3, which is 2 weeks away. If TLW are looking for a farm down we could be writing the same stuff in 1 year from now. I hope I am wrong.

I get that ECO are not in control of the situation but what I don't understand is his constant need to ramp when he clearly does not have deliverable actions to justify it. It's not his job to ramp the SP or lead the punters on. Just tell us something certain when you have something certain to say, rather than guff which is what we have heard all year.

Not professional and shreds trust (certainly my trust). AIM disease though....

Its 2 +3 from the restructuring date. He said its too early to talk about dividends given the level of debt on the balance sheet.

This company is beholden and effectively in the control to its bondholders until it is net cash positive, so 2 0r 3 years away. The bondholders have 3 representatives on the bod. To think about dividends now is fantasy.

OTOH if they can continue to generate the level of operation FCF that have done in FY21 for the next 2 years then todays SP will look like a bargain.

Holding here requires LTH mentality,I am thinking 4-5 years by the time the bondholders sell down and the debt is normalised. Otherwise forget about it.

Latest valuation at 109p at 10x FC 22 earnings

Shearclass

We have no idea what Vontobel or any of the other bondholders paid for the debt that allowed them to participate in the restructure. These are distressed debt investors so I would assume they bought at a level where the restructuring made sense to them based on the interest rate of the new issuance and the share allocation. In that sense 3.4p isn't what they "paid".
3.4p is a nominal amount and I am guessing 1.7p is closer to their book price. They are probably more concerned to reduce exposure to the company and being able to use the proceeds to invest in something with a quicker return.

One clarification. I said cash will pile up. Here I should have said cash will pile up if they keep pulling special stones out of the ground. Their capex forecast is 50m higher in 22 than 21. So they start with a cash 50m shortfall on the same carats extracted yoy. If those special stones don’t appear then cashflow would worsen, all other things being equal.

I may be wrong but I think you are misunderstanding the restructuring.

The net debt position is improving but the total bonds outstanding remain the same. The restructuring plan has a provision that Petra can not start to redeem the bonds until 2 years after the restructuring date at earliest and even after that the price to redeem is usury., IMO opinion the bonds will not be redeemed before maturity. So the cost of the debt stays the same at 10.5% of the 339m plus the BEE loans.

So when you say the debt is improving, net debt is improving but cost of the debt is not. Or balance sheet is getting better but P&L and thus potential for shareholder returns is still hamstrung for the foreseeable.

The SP here is being held back because of the above and the bondholders who either are or will be sellers see a time value wasting on the cash they have tied up in the shares.

OTOH if you are ready to wait and diamond prices stay strong cash will pile up and at some point it will impact SP. I just think that is a while away (2 or 3 years).

Last time I checked the bonds were trading at 96c on the $. If you bought these you would be earring 14% on your money and I think the chances of Petra defaulting in the current price environment are slim. So 14% a year for the next 4 years or bet on SP.. Hmmmm

Well spotted.

16m shares a month reduction. Only another 8 years to go and their done!!

Nice gesture. Be glad to se the back of the current incumbent who has a lot to answer for imo.

Also looks like the whopper trade that went through earlier might have cleared the decks.

Bondholders selling into any buys. Will take a long time for this to clear IMO.

Wonder if they will announce a consolidation next week.

Also to say SP movements like todays are also a function of where we are. Without momentum MMs will use STX as a plaything.
Up and down 5% or more in a day on tiny volume. It'll bounce around until we have news.

I'm hoping we will see an RNS soon talking of payor coverage at least if not earnings.

Shandy, I think you have answered your own question.

The previous CEO cost the company a lot in lost trust through the bungled fund raise and the mixed messages or confused strategy before the fund raise. This is what is now priced in. The new management team need to demonstrate their chops by showing results.

Fastcar

You are howling at the wind mate.

69p! I win!!

69p

He lost 50k on his last purchase....

Some money spaffed on solar?

Wonder if we can expect to see an RNS before this on 23rd? Just thinking if STX has something to new to say they would need to say it beforehand rather than as part of their presentation or Q&A.

Coloneldrake, I don't disagree with any of your rationale except on II anyway let's agree to disagree on investor interest but I think the number of trades on a daily basis tells its own story. I would be happy if a rising SP proved me wrong.

With regard to my holding here, I can tell you it's still substantial and thats part of my frustration. Based on the numbers here on any type of outlook the SP should be higher. Given the cash generation here I really don't think its to much to ask the BOD explicit state their cash return criteria. This is what the market needs to see in my view.

And yes I am hard to please!

No mention of shareholder returns as far as I can see and therein lies the problem here. This could be the dictionary definition of a jam tomorrow company. They talk of preparing for the future, diamond market outlook, sustainability and other blah blah but as a shareholder it means nothing if there is no prospect of a return on my investment. Why would any II invest here. I just don’t see an investment case that bears any scrutiny with what the company produces and what shareholders get back.

If you look at this report vs last year it looks good, ebitda up, eps up, net cash up. So why no mention of giving back to shareholders? Answer, BOD don’t care.

So we can kid ourselves the market will eventually realise what a great company this is but for this to happen you need buyers and there aren’t any.

Lack of care in my view. Although I notice the corporate expenses have jumped as the Mayfair restaurants have reopened.

2 trades.

wakey wakey GEMD BOD