Member Info for slowlyslowly

Disclaimer: I'm not an accountant, even less a tax accountant, and hopefully one will come along soon to answer your question. However: I believe they can declare a dividend as "return of capital". That means they're using dividends as the financial instrument to give you the funds, but that for accounting purposes it's the company returning capital to its shareholders. I think that could change the tax treatment of such a dividend.

There's a lot of excess entitlement rattling around to be hoovered up, so I'm now hopeful I might not get scaled back after all. Just checked the figures. The number of shares available in the open offer is 26,438,255. Shares in issue is 158,629,530. The first is exactly 1/6 of the second. So every shareholder is entitled to their 1/6 under the open offer. But we've been told Jim will not be taking any of his open offer shares - just the £1m from the (hopefully imminently converted CLNs). He has 29,694,226. So even if every other shareholder takes up their full 1/6, that leaves a spare 4,949,037 shares that people could ask for as excess. Normally with an open offer, excess only happens if some people don't take their full entitlement. That is the case here, but it's different in that we know Jim isn't taking his, so there's an extra 5m odd shares for those that want them.

Which company is that, Panda?

And while we've all been talking, someone has put a buy through for 51,000 shares. Whoever the 51k buyer is, they obviously see this as good.

Good point raised by Swanny. Thinking on my feet here: 1. Very few investment funds have a prospectus that allows them to buy with a deliberate view to selling again within 3 days. Almost all invest to make money, rather than trade. 2. A fund with a short term view would not care about the call options or about realising shareholder value in the portfolio investments, for the simple reason they'd know they'll be gone before any of that makes a difference.

Is that subscription good or bad? That partly depends on your predisposition. Some on here are predisposed to find the good in every step, others always find the bad.

So: You could focus on the fact that 10p is at a discount to last night's close

Or you could notice that

1. 10p is a significant premium to 7.5p, and the company had hoped for more at the 7.5p raise than they got. This new investor delayed subscribing, and as a result had to take a higher price. Yet they still considered this a good entry.

2. This is an investment fund lumping in the kind of sum they'd never be able to obtain on the open market. A new institutional investor of this kind signifies confidence. They will have done their research and due diligence. We'll find out who they are soon, as the amount they've taken is notifiable.

3. This keeps the wolf from the door. One refrain on here has been that they'll place again soon, blah, blah. Well, now they're £1.5m further away from needing to do that.

4. Reading between the lines, it seems that this new investor is interested in TERN as a vehicle to hold Wyld. Wyld is listed in Stockholm, so perhaps this fund is only allowed to hold UK listed companies. Regardless of why, this means that both the RNS this morning are actually about Wyld's commercial launch. Wyld is currently a strong member of the TERN portfolio.

That's a great interview, thanks. The WYLD share price chart is also looking very healthy - currently breaking out at 17 SEK, and the volume on Monday was the highest it's been since just after IPO.

Interestingly, Mellon's £1m CLN converts into near enough 1/6 of his current holding. So him not taking part is more a case of him having already subscribed in full for his part, and it's up to everyone else to decide what to do about their 1/6. I haven't done the sums to work out if 1/6 of Mellon's current holding is included in the number of shares available or not (so: Are these an automatic tranche available as excess entitlement). I certainly plan to subscribe for my full one-sixth, and then a few multiples of that again as excess entitlement. See how many I get.

Correct, CREST holders will have their entitlements notified as soon after 8am tomorrow as possible. Halifax will hold through CREST, so they will be able to show you your entitlement once they've processed the notice they get tomorrow morning. Patience is required.

Shares have a "nominal value". CNR have a nominal value of 20p. The company can issue new shares at 20p, or at a premium (20p plus some extra). They cannot issue new shares at anything less than 20p. So you've just been notified of the accounting manoeuvre to change the nominal value from 20p to 0.01p, so that the planned issue at 15p can proceed. What happens behind the scenes is that they split each 20p share into two - one for 19.99p and one for 0.01p. Those two shares are in different classes, so that the 19.99p carries no voting rights. They therefore are of no value to anyone, so they effectively get thrown away. You're left with exactly the same number of shares you had before, but the nominal value is 0.01p rather than 20p. To do this, they need a vote at a general meeting.

But all of that will happen in the background and won't change the number of shares you hold, and that piece of gymnastics will not by itself alter the price your shares can be sold (or more bought) for. So nothing to worry about.

I heard someone say these are the highest grades ever reported in the London market. They are extraordinary, so I have no trouble believing that claim.

As I understand it, if you put in for 1/6 of your holding (as of the record date), you will get your full allocation no matter how fully subscribed the open offer is. The way to get a guaranteed chunk of the offer is to hold 6x what you want. However you can also put in for excess entitlement. As long as you hold one share of Condor on the record date, you can do that. That is the one that will be scaled back assuming the open offer is over-subscribed.

Electric Lion: "The Company expects the Fundraise, assuming at least £1 million is raised through the Open Offer, to fund the Company through the sales process as announced on 22 November 2022."

especially given that scenario plays out only if the whole thing has failed, meaning crystallising huge losses on his existing 18% holding.

The other thing to say about the coupon rate is that it's only the backup plan, and Jim clearly does not want it ever to apply. He is not lumping in at 15p in the hope of an exit at somewhere between 17.5p and 18p

Spot on, electric lion.

The £1m keeps things going for a couple of months. To get the sale process through, they need more. They haven't told us how much, but I'd say the total is between £2m and £4.2m. Most likely, £2m is enough. More is offered to give us the same opportunity as Jim.

If enough take the open offer, the plan is on. If less than £1m is raised in the offer, they don't have enough to execute the plan. The loan note with its coupon then becomes Jim's insurance plan in all this.

So if investors (not just us lot, bigger holders too) want to see the sale come off, we need to take our offer shares, to a minimum of £1m.

Here's what I think has just happened.

They'd been having offers of interest to buy the assets. To fund the company through the process, they needed some more cash. They were lining that up on a secured debt basis, when US sanctions hit the country. Confusion it would affect us led to a share price drop, which made the deal unworkable.

Jim wants the sale to go through enough that he said to the brokers "I'll put the money in to keep the company going. If a sale goes through, I'll more than get it back.". He must be confident it will go through. The board as a whole decided it would be fairest to existing holders if we were also allowed to take new shares at a 1:6 ratio. Jim agrees. Effectively, his £1m is his open offer take-up, which is why he's not taking them again in the offer itself

Two more adjustments got made. There needs to be some reward to reflect the size of the risk he's taking relative to other holders, and to compensate the opportunity cost in letting others share his very good entry price. So warrants were added for him. We are more risky than him taking the lot (what if they don't get the £2m they need at a minimum?), so his part is structured as a CLN that converts instantly. That way, there's no short term risk and they get £1m cash straight away without having to wait for a subdivision EGM.

It's confirmed that these funds are sufficient to get us right through the sale process. That kind of confirms the plan I've just run through. It also puts a tighter timescale on the sale than we had before.

The record date is Thursday, so the ex date is Wednesday. I expect an initial drop as people misread this as a bucket shop placing at huge discount. I then expect people to want to be in this for the 15p shares that Jim is so confident will give him a return, so buying will take over fairly quickly.

That's my 0.01 penneth of thought. DYOR and GLA

With volume behind it - we've had more volume go through by 10am than on the entire day any day last week. I'm always more encouraged by a rise when it's backed by decent volume.

Thanks, yes of course. Have we heard any more on timing for that to complete, or timing for publishing the associated prospectus

@MetalHead, why are you saying we currently own 50% of Kanye?