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I expect the new man will have lots of ideas and plans but insufficient funds to make much of it happen. Hopefully he will be able to persuade someone with plenty of money to lend £30m based on his historical successes. Failing that we will see plenty of shares issued.
Imagine a business with £12.5B of revenue and £8B of costs and a profit of £4-5B pa. This is RBS once it has finished paying for the past and paying a dividend of say £2B pa What is a business like this worth? I think £60B plus, which is double the current market capitalisation. How long will it take to get there?
Piscio, periodically I communicate with someone at ATC. Each time I have been told that there are certain activities going on that may lead to a relisting. I don't think they are trying to relist for themselves but I suspect they hope to become relisted as part of a larger transaction rather like the Atrum Coal deal would have. For me this is something of a non answer as it relies on someone making a bid for the business which they have already tried. Anyway the decision is yours, sell if you can on Capita or hang in there. I am hanging in.
The rights are still nil paid so likely to be a bit of settling down for a while. If management have got to the bottom of the problems and stopped the rot then these could quite quickly get back to 250. If not then another drop will occur. Not enough info yet to decide which way it is going.
This business is in quite good shape in terms of debt, profits, dividend and in my view is very much undervalued. In my view the market is discounting poorer performance, no improvement etc. This does not make much sense to me so perhaps it is possible Mr Ashley wants to drive the price lower for an eventual bid? Look out for when his shorts start to expire or he starts to cash them out. Or is it just a hedging exercise for shares he owns already? Anyway my view is barring a collapse in trading these shares are good value
Correction - take care
Be careful guys. Debt is a bit high and looks to be mostly in $ and Euros so is now even higher with the £ decline. looks to me as though they will have to slice the dividend a bit or all of it. Wait and see would be my strategy as it normally takes a while for companies to realise the full extend of their problems and requires 2 or 3 reportings to get it into the public domain. Should be a good company once back on a stable footing but probably will drop further especially when debt/earnings/loan covenants become an issue in 6 months time. For me this is a good opportunity just not yet.
Unless I am mistaken Atrum must offer about the same to all the shareholders as I believe under the rules at 30% they have to offer at least the same to everyone at the average price they paid. So they can offer what they like but as soon as they get over 30% they have to offer a full price. So I think we can stop worrying and I don't see what benefit we get from being unpleasant to Mr Best. Note the second company bidding which is a US listed OTC company, it is "Dark" which means not trading or reporting. Not sure who is orchestrating it but it would be a good way to become listed. The fact that they are able to announce 2 potential bidders and have a price precedent set by Mr Best is actually very good.
There we go. take a look at the ACG company website.
It is worth knowing that Atrum are proposing to issue shares of $20m for funding and spending $5m on SBs shares. Could the rest be for ours do you think?
I concur with nobber's comments. The price paid is about 0.4p per share but still needs approval of the Atrum shareholders which wont be long now, 29th Sept. So October could be quite interesting for us as why would Atrum want only 25% of the business and I wonder if other potential bidders might be flushed out. I don't think they will be making much effort regarding a new listing at the moment.
After the acquisition earlier in the year I had a long conversation on the phone with the guy whos number was on the documents. He was very open about things. Their view was that the company is now worth £20m which is backed up by the price paid by Atrum. They also had the intent to relist probably on a US market. The relisting view may have changed now that SB has sold out (wants his money) and that over 25% are owned by Atrum (different agenda). On the positive side Atrum are a serious company.
I suggest everyone votes against resolution 1. Note they have not said how much it would cost to do the acquisition on a reverse take over basis. Not so much I think.
I fully agree with your 15.42 comment. All spare cash from profits for 2 years used to pay down debt and thereby strengthen company balance sheet would be the correct strategy. Will they be able to resist spending it.
The interest rates on the leases are almost certainly fixed as that is how they work. That would not be the case for other forms of borrowings though.
Holymoly I can understand your concerns from the experience you have had in this share. There comes a point though when a management team might just get it right despite the problems of the past, we can argue about if that is through accident/luck or good decision making but that wont help us much. It does however appear that ATC will make circa $6m profit this year ($4m to $8m). Yes, they have committed to a long term lease of new equipment but that is paid over 5 to 10 year at about $2m pa (might be $3m pa) and the depreciation number is already a cost in the profit so cash generation to pay this is already built in. The mine life is only circa 10 years so they need to do something to gain more anthracite reserves to dig up which may mean a new mine.
It looks quite positive as the forward profitability on the forecast cash costs per ounce at current gold price per ounce looks encouraging. Also looks to me as though it will remain cash generative going forward. However as always please make up your own minds.
The options are simple, sell and lick wounds or hold and hope. There is at least a possibility of survival or some return to shareholders with the plan outlined.