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Correction - EGM

So they seem to be saying that :

- they aren't trying to take over by stealth
- they are ok with Alya as temporary CEO, but not with Hambro and the other 2 temp appointments,
- they want the temporary board to headhunt candidates for a new "independent" board to be voted in at the AGM

Could be worse.

You are in fine form tonight :-) Actually I think the 2022 bonds were at a coupon of 8.125%. I think the convertibles were at a very tasty 8.25%.

If the old board and the company survive this current crisis it will be good to see the conversion happen. These bonds have been an open sore, we will save 4 years interest, and the conversion is probably already priced in to the shares to some extent.

mdunsire - did he say what resolution 20 was for?

rustybucket

I think resolution 19 (a 1.1bn share issue) may relate to the convertible bonds. I think resolution 20 (a 2.2bn share rights issue) may relate to the 2022 bonds. I sort of understand why they felt they might need the authority of resolution 19 now - they don't in theory know when the bond holders will convert. I don't understand why they need the authority of resolution 20 in the coming year, since the 2022 notes don't mature until ... well 2022.

Apart from the fact that implementing resolution 20 would further advantage the shareholders who own convertible bonds - the bonds pick up their rights allocation FOC - losing the Temi share issue vote should have sent a clear message to the board - no more share dilution. So what do they do? Put 2 resolutions into the AGM to double the number of shares in issue.

Stupid!

If I can take your comment in two parts

1 I think there will be an EGM and a re-vote.

2 I think the horse trading I referred to will be around who stands for election at the new vote. UGC and Co might say that Pavel does not fairly represent the interests of all shareholders. They might point to resolutions 19 and 20 (the share dilution resolutions) as examples of that. I think some of the institutions might agree with them. So although we may be voting again soon, it may be for different people - compromise candidates.

It's the key issue I think (hope?). As Aimtitan says below Renova gave notice of their opposition to the board in May 2017. In 2020 UGC didn't give any prior notice of their opposition to Pav & co as far as I'm aware.

I'm blown about by the wind a bit on this issue. But my feeling right now is that the temporary directors will remain in place after the court hearing on Monday. However, I think there will be "horse trading" between Monday and the EGM, and we may end up with a new board.

This crew were a bit sneakier than the 2017 usurpers. There was no advance warning of their opposition to Pav and co.

And by implication this is an attempted hostile takeover. 2017 was a boardroom coup

TooLittleTooLate

"Having considered the facts the main fear here is short term uncertainty. As small shareholders that is always our situation. We fear being wiped out but is that realistic given the fundamentals?"

I can't speak for others but my fear is more specific than that. I fear that if UGC et al are able to take control of the board next week they might use resolution 19, which was passed at the AGM, to issue 1bn shares to themselves rather than the purpose for which I believe it was intended. This will come at a cost to them but in doing so they will have diluted the shares and will probably have taken effective control of the company.

It's unlikely that we'll be wiped out. We will get something for our shares, but we will be out of the game. UGC's silence is telling - people like to sound off when they think they are doing the right thing, but tend to keep quiet when they know they are up to no good.

I am often critical of the company's management and I tend to agree with you when you say "a strong and capable board would not I suggest have put themselves in the position they are now in" but sometimes the devil you know is the best option.

I thought (hoped?) that they were just activist investors. But if that's what they were I would have expected them to come out with a whinge list during or after the AGM. Instead just an ominous silence. They are speaking in actions, not words. Whereas the defence, if it exists, hasn't fired a shot.

If they get control of the company next week they'll have a go at it.

"The large shareholders are not going to let someone steal the assets for nothing."

They need to find a way to stop them. We need a date in the diary for the EGM. It can't happen for a month or so but the date needs to be set this week. Then if Hambro and co are kicked out next week, the supporting shareholders (or those opposed to UGC) will have something to fight in the courts if and when the remaining directors try to cancel it.

"Kerimov .... has never worked or associated with strukov"

That is good news. Kerimov in the past has appeared to be among the more principled of the Oligarchs. He even did his bit in 2008 to try to keep the investment banks afloat. I hope he takes a bigger stake in Pog.

"Why people are holding onto POG now there is a big boardroom bust-up and the shares are already trading at a PE of 30?"

An alternative view of the "boardroom bust-up" is that it is an exercise in shareholder power. In recent years shareholders interests have been very much secondary to those of the creditors. This looked set to continue with the inclusion of resolution 20 - a rights issue to clear the 2022 bonds - ahead of schedule for some inexplicable reason. This is an opportunity to "re-educate" the BoD.

As for the PE of 30, the 2019 books were cooked by the inclusion of a large impairment reversal. the true PE is nearer 10. Last years numbers were also impacted by the fulfilment of low priced hedges. The numbers should be much better this year.

You are still not quite right. The bond issue was in pounds sterling not US Dollars. Go back through the RNS's.

"Is the convertible priced at a strike price of 1p per share "

No. But the shares have a NOMINAL value of 1p.

mdunsire - This is tedious. From resolution 19 (my capitals for emphasis) -

To resolve that in substitution for all subsisting authorities to the extent unused the Directors be and they are hereby generally and unconditionally authorised in accordance with section 551 of the Companies Act 2006 (the Act) to exercise all the powers of the Company to allot shares in the Company and to grant rights to subscribe for, OR TO CONVERT ANY SECURITY INTO, SHARES IN THE COMPANY up to an aggregate nominal amount of £11,034,000.

Be sure and let me know what fund you manage so I can avoid it.

I think you might have the wrong end of the stick here, mdunsire. Resolution 19 would have authorised the directors to issue around 1bn new shares. But has already been said below this is probably to cover the requirement for new shares in the event that the bondholders convert. From the results of the AGM it looks as though UGC voted for this resolution.

If you were to try to read their general intentions from their voting actions (a dangerous thing, I know), this might be positive - in that they intend to keep the company going in its present form, for the time being, at least.

kenj and Updownflat - Thanks both. I am not with III but I found an archived version of the full AGM notice. Resolution 19 says "... up to a nominal amount of £11,034,000". As you say, the key word is "nominal".

Tricky :-)