Been somewhat unwell so just seen the RNS.
I find the choice of wording interesting: "contemplated".
Doesn't really say "anticipated" or "expected". More the air of the company musing about a possibility. I can just imagine the discussion that passed between AP and Fatty over the choice of word, and why.
Plus the legal bill for reaching an extension to 30 June that wasn't ready to be announced till 21 June.
Still, step by step, so perhaps it'll all be alright on the night 🤞
ASI: a big question now, IMO, is whether Capstone will come in for a slab of the headroom to support the company or whether they're done for now. It would probably be the best outcome for Vast if they do (unless there's a second II in the wings).
Interesting times. Have a good weekend.
Incidentally, confirms that the 30m was part of the swap instrument, as ASI suggested this morning and I then tried to work through in terms of likely mechanics. No secondary market accumulation by Capstone.
Will they in future? Maybe, though if they want more shares then they might seek new equity via the upcoming headroom because, that way, they'd actually be investing their money in the company rather than handing it to MMs.
RNS:
"further to the announcement made today regarding Capstone Investment Advisors LLC (“Capstone”) submitting a TR-1 disclosure regarding its increased shareholding, the Company has received the below TR-1 from Barclays Bank which was holding Capstone’s interest via a swap financial instrument. Capstone is now holding its interest directly via an outright equity holding which is the reason for Barclays Bank reducing its holding to zero percent."
Barclays down to 0% as Capstone now holding directly rather than via a swap instrument.
IG: I agree that Capstone's interest in Vast is positive and the increase from 150m to 180m is certainly not negative - though as ASI and I have suggested, might simply be linked to the swap terms in April, so no big deal now. (Observe muted market reaction.)
mcmac: I don't doubt it does happen but why on earth would Capstone need inside info to devote as little as 0.07% of their pot to acquire ~6% of Vast? This is pin money to them.
IG: that would be inside information, so Capstone don't know that, and certainly are only taking a punt.
The poster EGTP pointed out this morning that they have some €17 billion investments. Call that £14.6 billion. Their sub-£1m punt in Vast is then under 0.07% of their pot.
Xcoder: yes, absolutely.
PS. I think Capstone would have been happy enough to pay over the odds because it would save them driving up the price by buying 5-6% of the company in the secondary market.
Xcoder: I suspect so, I'm afraid. As you rightly note, it's in the nature of the rich to get richer.
But I made a slip earlier when I mentioned Vast near-doubling up its raise. That's actually unknowable and at best a guess. Thinking it through now, certainly more than I had done before, I'm not sure what additional quantum (if any) Vast would have received from Capstone. I presume something. The placees would have needed paying off, obviously, but how much extra Capstone would pay for the swap is unknown.
The reason I think there might have been a decent sum to Vast is simply that, with cash burn still as it is, it is striking that the placing - intended to give liquidity till early May - was not yet followed up on. There will be some who take it that operational cashflow is doing well enough but I'm a sceptic on that still. I think Capstone paid more.
*derivatives, not 'derivates'.
Xcoder: yes, financial instruments like derivates of various kinds are relatively "convoluted" compared to secondary market retail activity. But not at all convoluted for people who operate professionally in those markets for a handsome living.
The shares will all have been ring-fenced under the contractual placing and swap terms agreed by the brokers and the parties. The raise was 212.8m shares, so enough to cover the swap terms.
IMO.
Lostsoul: as a private contract, we obviously can't really know. But IMO, the likely mechanism is that, back in April, Vast nearly doubled up on its placing raise by giving Capstone the option to take the shares. It will have been set up through brokers as a way to let placees out and bring Capstone in. Capstone therefore paid cash up front - I should think technically prior to getting the shares - and therefore had a 20% interest fee on the deal - a killing over 2 months. Hence the option to bump their 150m to 180m. The company received cash ahead of the 150m, ducked interest via the 30m, and probably the execution timeline under contract was 2 months or 60 days - hence why the 30m bump now. Capstone thus get 180m for the price of 150m, Vast raised the cash nearly twice over, placees had a sweet exit and the SP didn't need to tank. Just my hypothesis.
IG: I have no problem with those figures and agree the windfall would be excellent news. 🤞
In this instance, however, the shares will have come from whoever is playing in the swap market. Given that the initial TR-1 was two days after the placing RNS, one might speculate that it served as a placee exit mechanism. But not necessarily.
Being a private contract, that is very hard to determine. But you can get some very general orientation on the derivatives markets (including swaps) on the London Stock Exchange website:
https://www.londonstockexchange.com/personal-investing/introduction-derivatives-cisi
A much more detailed London Stock Exchange pamphlet (16 pages) is here, and there's particular discussion of equity swaps at p.7:
https://docs.londonstockexchange.com/sites/default/files/documents/turquoise-nylontm-whitepaper.pdf
Lostsoul: the placing and the swap are different.
A diamond outcome of that order would certainly be very positive. I'd be delighted to see it. Pure guess whether it does or doesn't happen in the next two weeks. Maybe yes, maybe no.
I find the idea that BPPM Q2 will be profitable to be extremely optimistic indeed. Remin is very likely a long way away and will need huge investment up front, so pointless to factor in as a practical positive for now.
IMO.
Xcoder: London is a major global hub for derivatives trading. It'll have been done through the swap market, which has its own clientele very different from retail. IMO.
So the company RNSed a placing on 12 April, stating: "this Placing provides liquidity until the settlement is finalised, expected end of April or early May 2023." Slightly under £1m to last around a month.
Then on 14 April, they announced the swap with Capstone. Slightly under £1m and just over another month on from "early May", this has now defaulted to equity.
In the meantime they've asked for giant new headroom but we are assured that they have not made a "commitment" to using it. 😉