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IIRC ...
Once a company has declared an offer for it, holders over a certain %age (1%?) have to declare all their dealings - unlike the normal TR-1's where they only have to declare when they cross full %age point thresholds. Without checking each one I think these Form 8.3's are holders making declarations of their holdings as starting points.
Happy to be corrected if I'm wrong as I'm NOT an expert.
"And for about a week the sector has also been able to count on the non-possessory pledge : companies sell their inventory to inventory trading companies which – thanks to this tool – can be financed more easily by banks and investment funds and, therefore, put provision of new liquidity to companies to improve their working capital."
This is mixing up 2 concepts.
Selling inventory to trading companies is SYME's IM 'unique' True Sale approach and nothing to do with PNP.
PNP is about establishing a 'charge' over products that the client company retains but the lender has security over to guarantee the loan. This is supposed to be the trigger for White Label arrangements using SYME's blockchain platform.
Makes me question whether the article writer is providing anything of value or just cutting and pasting different press releases together to generate a word salad.
I think Hughez=Market Master= Fintech Investor.
This would worry me a little.
In 3 months (just over), during which the company has delivered the first working IM, the sales and onboarding crew have only delivered £13.7M of new pipeline (and I would assume related fees). Even if it was all monetised tomorrow, that would generate SYME an income of about £411k per year. If this run rate was annualised, they would only be generating £1.6M of new business income a year. That says that the potential pool of new customers is starting to run dry or becoming harder to convert/ onboard.
Obviously if the whole £343.5M was monetised tomorrow, it would be a different story, but the fabled snowball doesn't seem to be growing as fast as hoped.
Total holding is unchanged (well it has 0.01% difference but I suspect that's rounding). What has happened is that they have had shares that they lent out returned to them (% of voting rights through financial instruments down from 1.38 to 0.44).
Growing companies that have good paper profits can be hamstrung bay cashflow. If I have a project that will bring me in £100k revenue and £30k profit, but I need to pay £50k for raw materials before I get paid (scale up/ down as appropriate for various companies), then financing is needed.
There are a few options:
1 Raise capital, sell shares - time consuming, not often appropriate for SME's
2 Private Loan - Directors, family etc - not always available
3 Unsecured Bank loan - not always available (even if not distressed, can be pricey - currently 6, 7, 8% ballpark)
4 Secured Bank finance/ loan - mortgage, asset finance, invoice discounting/ factoring, inventory financing - some can be too long term, might already have loans secured on the asset, can be admin nightmares probably about 1% cheaper than unsecured loans
Where SYME is interesting is that it looks like it could be a long term or short term source of working capital - either bring in funding for the growth project while the stock is on your factory floor, then when you sell it, repay (buy it back) from SYME and switch to your traditional customer financing until the customer pays you; or have 'extra' stock on hand maybe things that before would have been special orders - eliminate lead times for manufacture which makes you more attractive to customers and use the SYME funding to fund that extra stock holding, and what is sold to SYME is constantly changing, tracked by the blockchain, similar to invoice discounting/ factoring - you might have a constant £1M financed, but the underlying assets backing the finance are constantly changing. Pay SYME 3%, take an x% haircut on your buy/ sell price to the stock holding company/ funder - might be cheaper than the options above, although I have some doubts if I'm honest but haven't seen the numbers in black and white.
The block chain might make this a relatively smooth way of tracking complex transactions, BUT the fact that the first IM took so long and hasn't been replicated despite SYME having $8.5M of funding ready to go makes me question whether it is set up to run smoothly at this point, certainly the onboarding seemed to take a lot longer than expected for the first IM.
Waffled a lot, but I can see why this funding might be suitable for a non-distressed company and it's interesting, however I am not convinced that the practicalities work yet and I am not convinced that SYME has the funding to get the practicalities ready in time before the cash runs out.
Good point, I wasn't looking at the other warrants, just the Open Offer ones from the last RNS, I haven't looked at the other warrants for ages.
Does the prospectus assume that the warrants will all be exercised? That wouldn't have been unreasonable when you could flip shares you bought at 0.00065 for 0.0008. It's not a stunning amount of cash, but about half a month's cash burn on the last reported #'s.
Even the buy price is at the warrant price, the actual trading price is mostly lower. There are about 270M outstanding warrants which would have brought about £175k into the company, I doubt there will be many of those warrants exercised while the price is at this level.
If the concerns about the cash burn are valid and not covered by new revenue, this is a little extra added pressure, especially as the capital re-payments on the loan are due to start fairly soon.
Earlier this year of course means the lows last year - I am not in 2023 yet, still living in the past.
"1.5%?!! you call that nice?"
Have a look at the annual dividend flows. This is one payment , last year they made 5. This is the 4th so far this year and I would expect at least 1 more relating to the 22-23 FY.
Last year's total divi was £2.35, this payment takes this year to £2.95 with *finger in the air* maybe another £0.50 to come. That puts the divi in the region of 3-4% on current sp - not spectacular, but growing y-o-y, and if you bought in at the lows earlier this year you are more in the region of 5-6%.
It's the uncrossing trade
Ahhh yes, fantasy formulae are always interesting (I worked somewhere where the Bill of Materials for a drawstring bag had 1.6 miles of string in it because everyone ignored the units of measurement we bought the components in). :)
"Am I missing something?"
Briefly, yes, the 3? return is an annual figure, not on an in and out basis.
RNS 12th Sept 2022:
"The total expected average annual fees to be invoiced by the Company's fully owned subsidiaries, as detailed above, over the duration of this specific transaction, equates to approximately 3% of the gross value of the inventory to be monetised by the StockCo. "
Annual fees being the key phrase. I'm pretty sure that there are other places that SYME have used a 2-3% annual fee for amounts under management.
"If SYME gets the 50 million from V Chain, how much is this worth in revenue for them?"
based on 3% upper range, about $1.5m a year. Plus if it all worked, the potential for the fabled snowball effect and massively increased exposure.
END=RNS - autocorrect!
"It does read that Vechain have pledged a commitment of $50m "
I don't see how, without torturing the English language you can read that. IF it had read "reflecting the commitment budgeted by VeChain FULL STOP" then I would read VeChain as finding $50m. But this would represent $41.5m of new funding. It would not be buried halfway down an END as an adjunct to other announcements, it would be front and centre. As it is, with a very badly placed Oxford comma, SYME is putting a $50m portfolio together of which $8.5m is funded and they are looking to the VeChain ecosystem and other cryptos for the remainder. If they achieve it, it will be a great achievement for them, but I cannot see how you think that RBS is announcing they have a $50m portfolio of clients and $50m of funding to satisfy it.
Gosh that's misleadingly edited to make it read as a single piece of writing!
I can't read it as saying that the full $50M is available and ready to go, because of the word "and" between the "commitment budgeted by VeChain" and "the opportunity to raise additional capital ..." which to me reads that both are covered by the $50M. not that the additional capital would be additional to the $50M. Plus if VECHain had upped their commitment to $50M I am sure SYME would be shouting very loudly about it (and should do).
But, I have been wrong before and will be again ;)
"But funder gaining confidence and adding upto £50m is bullish imo"
This has not happened and is not in the RNS. What the RNS says is:
"reflecting the commitment budgeted by VeChain (i.e the initial $10M less the $1.5M used = $8.5M)and, the opportunity to raise additional capital from the VeChain community and other crypto/ digital assets investors" - the bit in brackets added by me.