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It's the uncrossing trade.
6 sentences
1 correct
44M @ 0.074 per Google finance @ 9.47
Ouch, big drop
Looks to me like a big holder (Venus?) is selling - from google, there are transactions of 50M, 10M, 10M & 25M in the last 15 minutes.
"SYME won't have to issue Venus with more shares once the IM's & cash come rolling in."
Copy and pasting from a couple of days ago, but the facts remain:
Per the RNS (27/4) announcing the Venus funding, there is a mandatory draw-down of £3.75M @ £0.0005/ share. Venus have taken 5,620,000,000 shares so far (£2.81M) leaving £940k = 1.88B shares that *have* to be issued under the agreement. Venus will also have had (I am not sure if they have converted any) 2.81B of warrants @ £0.00065/ share from the tranches issued so far, plus another 940M to be issued from the outstanding tranches. Plus 3.25B warrants that were issued at the signing of the agreement.
New bit:
So even if SYME was drowning in cash tomorrow, they still *have* to issue about 1.9B more shares to Venus, or a bit under 5% of current shares. Plus a whole load of warrants presumably still outstanding (maybe 6.5B when the final mandatory tranches are issued) as there have been no RNS's about Venus exercising warrants (iirc), and why would you but at £0.00065 when you can buy at £0.0005.
"They do now - TFC completed their 1st in warehouse IM via DP cargoes :)
“But TFC don't do 'True Sale' IM with no obligation to buy back, they do standard Inventory finance.”"
That wasn't a True Sale IM - the only new thing about it was that it was sourced via DP World, not that it was True Sale IM.
Doctor - I am pretty sure that AZ has said specifically that there is no obligation to re-purchase. That was an essential caveat for the "True Sale", but I would have to spend a bunch of time I don't really have tracking it down - I might do at some point but would appreciate if someone else has it to hand from earlier discussions.
But TFC don't do 'True Sale' IM with no obligation to buy back, they do standard Inventory finance.
My company manufactures items from Stainless Steel, the selling price is closely linked to the commodity price of the raw material. This can increase and decrease month to month, maybe by as much as 25%. So say I manufacture goods that cost me £100 in June, in July they might only cost me £80 to manufacture, so for it to be attractive to me to IM the goods with SYME and buy them back, I have to be able to buy them back at (say) £75. Then Syme have taken their 3% (call it £2) and the funder wants a return on the loan/ purchase price (say £3), so the max that SYME can buy it from me at in June is £70 and that's assuming that it is 100% that I will buy it back or they can sell it to market easily. To take on that risk as a funder, I am wanting a risk margin of about 20, 25%, so I am really only wanting to buy that £100 cost of goods for £60 to ensure I have an escape route. As the Client Co, taking a 40% loss on a sale, even if I re-coup some of that when I buy it back, it doesn't look attractive as a funding route. Where am I missing a piece (and all maths done without even a fag packet to scribble on - excuse any variances)?
"either as a sale or as a loan."
This is the bit that has always puzzled me - I have taken it as a given, that the "sale" from client to SYME (by which I mean the subsidiary stock holding co) would have to be below the cost to acquire/ manufacture, otherwise the funder doesn't have any real security/ leverage, and what would prevent client from just churning out their highest margin tat and 'selling' it to SYME with no intention of ever buying it back, there must be an incentive for Client Co to buy back any inventory transferred to SYME rather than just making more, so the buy-back price has to also be below cost of acquisition. I am fairly sure I have seen that client co is under no obligation to repurchase the inventory.
Soooo, as well as fees etc (which look comparable to any standard trade finance), the cost to the Client is that they report as loss making sale for the benefit of having it off-balance sheet. I am not an auditor, but every year I have to show my auditors that any sale my employer makes is profitable. I think that if they are loss making, I have to take a write-down to my stock valuation (we always make profit on sales, so I've never worried about the what if bit - happy for someone more knowledgeable to explain the impact). I'm not sure I'd prefer to show sales at a loss in order to get the debt off the balance sheet, but that's for my situation, YMMV.
"The important thing is IM IS COMPLETE AND SUCCESSFUL ."
No it's not, not yet. The transaction is complete with the client, but it has not yet been reviewed by their auditors, and if they are a relatively big company, it may never be reviewed as €1.6M might be below materiality. If their auditors sign it off, THEN it is complete and successful. If their auditors say it should be on the balance sheet, then there are big issues with the concept. I will be watching this point with interest to see if it's ever addressed (because if it is truly off balance sheet, then SYME will have created something interesting).
From the same RNS, you missed this bit:
"In Phase One, a proof-of-concept real transaction will be executed by end of July, involving a client company already selected by SYME from its existing Italian portfolio, with the VeChain Foundation serving as provider of its VeChainThor blockchain and NFT investor."
How accurate was that paragraph?
Last Year's Accounts - I have tried to tidy the formatting - apologies if it's hard to read (or go to the RNS 31/5/22 and search for "salaries" :
"The aggregate payroll costs (including directors' remuneration) were as follows:
2021£ 000 2020£ 000
Wages, salaries and other short term employee benefits
1,476 633
Social security costs
166 95
Post-employment benefits
86 1
Redundancy costs
- 16
Total staff costs
1,728 745
The average number of persons employed by the Group (including executive directors) during the year, analysed by category was as follows:
2021No. 2020No.
Executive directors
2 1
Finance, Risk and HR
2 1
Sales and marketing
4 3
Legal
2 2
Operations and Platform development
9 7
Total average number of people employed
19 14
11 Key management personnel
Key management compensation (including directors):
2021£ 000 2020£ 000
Wages, salaries and short-term employee benefits
890 361
Social security costs
60 -
Post-employment benefits
60 -
Total key management compensation
1,010 361
Key management personnel consist of the Company leadership team and the Directors.
No retirement benefits are accruing to Company Directors under a defined contribution scheme (2020: none), however the Chief Executive Officer received cash in lieu of payments to a defined contribution pension scheme of £49,310 during the year (2020: none). This was allowable under his directors employment contract. Of the £49,310, £21,560 that was paid during FY21 but which related to base salary earned in FY20. The remaining £27,750 related to base salary earned in FY21.
The Directors' emoluments are detailed in the Remuneration Report of the Annual Report and Accounts for the year ended 31 December 2021."
Elllltelinv 14/9 16.29 "I am not the one speculating about Venus."
Also Elllltelinv 14/9 11.53 "Venus responsible for the big buys at 20m and 30m."
"Time to provide proof if you think Venus is selling."
# Shares certainly issued to Venus to date = 5.62 Billion (Various RNS's to date)
TVR in SYME = 43,957,698,172 (from this morning's RNS)
%age of Voting Rights if no shares sold and no warrants exercised = 12.79%
Number of TR-1's listing Venus as a holder = 0
"More shares will be issued I'm sure."
They have to be. Per the RNS (27/4) announcing the Venus funding, there is a mandatory draw-down of £3.75M @ £0.0005/ share. Venus have taken 5,620,000,000 shares so far (£2.81M) leaving £940k = 1.88B shares that *have* to be issued under the agreement. Venus will also have had (I am not sure if they have converted any) 2.81B of warrants @ £0.00065/ share from the tranches issued so far, plus another 940M to be issued from the oustanding tranches. Plus 3.25B warrants that were issued at the signing of the agreement.
To be fair, it's not the company's job to know the intricacies of tax regime in every country that PI's could live in, it's the PI's responsibility to do their due diligence and find out how what they are being offered fits with their investment holding structures.
It's potentially quite clever of the company (shafts PI's though) to entice PI's with cheap warrants, that they (PI's)end up with so few of that it's not worth the fees to exercise and then bed and ISA them, so they never exercise the warrants.
World Trade 2021 = $28.5 Trillion (https://unctad.org/news/global-trade-hits-record-high-285-trillion-2021-likely-be-subdued-2022)
10% = $2.85 Trillion
Chances that Syme would achieve that = 0%
Doh I was using a rough current so to co.never the loan note, it's about 120 milliranche tranche price day 80 million at warrant price.
plus half a billion (Give or take) in warrants below the current sp.
Plus 10% fee as a loan note at 10% pa interest. Not sure what price that gets converted into shares at. If it's the same as the warrants that's about another 45 million shares or about 60 million if at the tranche price. Please correct any early morning maths, I didn't have a spreadsheet to hand and was working on year end accounts until 11.30!
£0.15 dividend plus £0.10 market being in sell-off mode today, so without ex-div we'd be down 3% ish, starting to look cheap to me, but so are a few others