Member Info for tbow112

So how do you get round the problem that using the "agreed valuation" makes raising finance ridiculously expensive compared with raising finance from people who are happy to use market value - ie simply using the LSE ?

So please tell us what the commercial valuation is, and who invented it.

"What is the 40M pounds that you are claiming is a donation?"

If you sell 144,508,671 shares currently priced at 116p for 80p per share you are making a donation of well over £40 million to the buyer of those shares.

"I genuinely can’t work out why you’re so negative around Pensana outside of an ulterior motive."

Discussion boards are much more useful when they are used for discussion rather than simply for cheerleading.

In this case there happens to be an immediately relevant question - "Why does a company with outstanding prospects like Pensana repeatedly offer very substantial discounts to those to whom it issues shares ?"

And given that PRE is proposing to donate about £40 million to an unknown entity in the immediate future it is probably worth discussing.

The Bod are based in the UK, have a mine in Africa, buy equipment from various countries and are negotiating in the US. It does not make for an easy life.

"first of all because I trust the BoD"

There is always the possibility that the BoD are overworked and at risk of cutting corners.

Thanks.

On my stockbrokers website there is an invitation to vote at a Pensana shareholder meeting on 4 March.

Came across it by chance.

Has there been any notice convening the meeting on 4 March ?

Surprising as it may seem, I would actually like to understand Mumble"s thinking about the arithmetic underlying a placing.

Maybe someone else could explain what the sentence means.

"The investor is buying 30% of the company at a valuation over $100m above the current market cap."

Your "logic" seems to be very peculiar but you seem to be forgetting that the $160 million subscribed increases the value of the recipient company by that amount.

So in effect the investor paid a price which valued Pensana at $537m (82p per share) when the market valued the company at $457m (the pre-subscription share capital) +$160m (thecapital subscribed) = $617m (95p per share).

That is a significant discount.

"The investor is buying 30% of the company at a valuation over $100m above the current market cap. "

Mumbles, perhaps you would care to explain what this sentence actually means using the current figures.

Mumbles, it seems to me that this last post is, unusually for you, simply nonsense. As far as we know the company does not need a rights issue and, even if it did, a rights issue does not need to be underwritten.

However the company apparently does need US investment to secure further financing, and has negotiated that investment by issuing shares at a significant discount to their market value. Whether that discount is appropriate cannot be ascertained without knowing more about who is the investor

"It’s also not about principle or individual shareholder sensibilities. The obligation is to choose the route that maximises shareholder value — including, presumably, yours."

It is about principle. Pre-emption rights are enshrined in company law for a very good reason - to ensure that all shareholders are treated equally - something which is fundamental to the concept of a public limited company.

Shareholder value, on the other hand, is, as far as I am aware, not even mentioned company law and there is no particular obligation on companies to maximise that particular metric.

Let"s have some realism. An open offer to put £5 million into Pensana plc could have been achieved in days and would have been cheaper than going to M&G. (I keep comong back to M&G because it is relative simple. There might be a good explanation for the placing but the board has not had the courtesy to explain anything.)

And in respect of the dollar placings the company could undoubtedly provide a form of words which would make things much clearer without creating a problem of confientiality.

It was you brought up "independent directors", and I hope the examples I quoted demonstrate that relying on them to provide some sort of oversight is a bad idea.

That said, it should be pointed out that raising capital from existing shareholders will always appear to be a lot more complicated than going out for a good lunch and raising a few million in return for a very substantial donation.

If shareholders are not prepared to defend their own interests it is generally unlikely that company directors will do it for them.

Standard procedure is to find a second company who are prepared to supply materials.

You asked for some evidence of ineffective "independent" directors which is what I provided.. Someone investing in that list may well have made a profit or a loss depending on when they invested.

Serious claim ! You do not need to do more than take an interest in a few shares to realise that "independent" directors are remarkably ineffective. Try Mobico, HICL, Tungsten West, DGI9 etc.

There has never been a shortage of "independent" directors who are obviously not independent.