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There will be interested parties for sure but most of them walked away upon inspecting the books.It reminds me of flybe which had multiple parties interested and BOD accepted a £1 offer per share.Cash burn and huge debt is a problem here and you have some loss-making stores too.
Delisting has to be approved by shareholders which is highly unlikely as shareholders would lose everything if there is any value left.In my opinion JD is planning on buying this out of administration off lenders.Lenders will get their money and JD would get the company with less liabilities and shareholders wouod get shafted.
Rest assured there were or will be other "bidders" but none of them made any bid after due diligence.Time will tell but this shareprice will only go one way from here.
JD is a buisnessman and he has tried to turn things around.But current model is not sustainable as by the looks of it he will need to keep on pumping more money until things turn around and we never know how long will it take and if his model is going to work.Brand has some value left but it also comes with huge liabilities.He has decided to pull out right now as it looks like debt is increasing ,revenue is falling and we have others liabilities too.So let this company run out of cash, put it into administration and then buy it out of administration leaving the unprofitable stores with administrators.
That was 25 millions in 6 months that equates to 1 million a week, add interest payments and working capital we have rougly 1.5 millions a week.Their revenue fell by 23% last year.
Right now lenders are holding all of cards I am afraid and they have gone through all of possible options.1.5 millions a week is hell a lot of money
Lot of punters have managed to get themselves trapped in here.There is no equity value left if one of biggest shareholders and co-founder wants to inject cash only if it gets delisted.He has gone through all of possible scenarios and has determined that delisting is best way forward.Right now he has two options, have it delisted pay off debt, inject new cash in and try to turn things around.Second option is do a pre-pack administration and buy it off lenders.
Brand must have some value, but looks like their buisness model is not working.It may need a lot of money and fresh management to turn things around.
Are planning on buying it when both of these options wont leave no or very little value for equity holders.
Problem is aisc would spiral out of control and that leads nothing to pay lenders.I do think it will be sorted but if it drags out for a little bit longer, company would need more funds and that is not an ideal situation.Dan has to go.
Company cant afford to say no to coirca as other mine is at stake, in my opinion company has no choice but to pay them.However this process has to be approved by lenders and payments to lenders would need to be pushed forward.
Court I am afraid,suspension of operation would impact cash flows and company would need to push due payments further.However ramping production would be key to increase future cashflow and you cant do it when your main contractor is walking away.