I had missed the bit in the changed rules maintaining the same trade constraint for pre-17 losses. In my defence I haven't had to keep properly up to date for some years.
The issue then is "same trade" and how broadly HMRC will see it. I think "energy" would have a fighting chance.
An overview of the current system. They should be pretty much covered whatever they reverse in. Save rhe risks I pointed out (there is a lot of guidance on HMRC published manuals)
You are quite right to wonder. But ...
It shouldn't be an issue. They are trading losses. They are within the corporation tax regime.
As such they can be utilised againt corporation tax already accrued (carry back) or corporation tax yet to be accrued - ie from future profits (carry forward). There are rules as to the rate (timespan) at which they can be relieved.
However there area couple of issues -which touch upon your concern.
- HMRC can disallow relief if it believes the transaction is orchestrated primarily for tax reasons. There needs to be valid commercial reasons. If, for example, any RTO involved an asset which the new directors already had a significant interest in(or possibly C4 did) that might raise eyebrows (I would need far mor details than would be made public to form a real opinion on the oevel of risk).
- HMRC need to consider whether the "new" business and the "old" business are the same business. This can potentially give rise to issues. However with a public company which is actively traded and listed I would be surprised. This is more relevant to private enterprise (perhap a situation where I divert the profits os a successful shop towards establishimg a hair salon) there is then more risk.
A general tenet is that lossess should eventually be reclaimable for as long as a business (not actually a fully define construct) continues to trade.
gary, just for info.
If its rule 8 which this isn't they have to raise 6m on admission (or when the become an investing co).
The expectation is that they are taking equity stakes (but tbh pretty much anything goes).
Same as an RTO. They could acquire a rabbit farm as far as the exchange cares (as could a ruke 8)
You broadly asserted that issuing loads of shares must always lead to a collapse in the SP. My limited point was that that is not necessarily the case.
I would certainly agree that raising cash to fund an asset purchase will be challenging.
Issue of billions shouldn't - of itself * - crash the share price.
At the moment 3.5bln in issue @ .0375 for a mkt cap of 1,321,500.
Now if they issue 54bln to cover a 20m asset purchase then they will have 57.5 bln and should have a mkt cap of 21,321,500. An implied SP of .0375 still.
The question is what the mkt will value the incoming asset at. Whether more or less than the price paid.
Personally I think more debt and less equity would be of benefit to existing holders (and implicitly to C4 due to the convertible nature of the debt they hold).
* Naturally though the market will price it at what it collectively thinks. That may well differ from what any individual thinks it should.
I think many would be quite pleased if Minty got a comeuppance. Ethically I entirely agree.
Practically I am not so sure ....
Judgement can only be against him if he is personally a defendant. We have no idea if he is. I would have thought Nuog would have needed to announce this is either they or AM were defendants.
If judgement were entered in some form and this happened to flow through to nuog as a result of the entity they would then have to establish a potential cause of action (acted beyond authority) and sue in order to affect him.
If PVF are suing himthen I hope they win. If suing anybody else I hope they lose (and the Karma gets him).
Cobra, I agree. Mintys conduct from when he was a director may comeback to haunt him.
However it is still the case that any liability as a result of court case could fall back to Nuog as a result of the indemnity.
It seems entirely reasonable to me that the new directors have taken this into account and may well have insured against it.
In any event that presupposes that PVF were to gain judgement. That doesn't seem particularly likely given the lack of any further news. It is merely something to be aware of.
I certainly don't expect a nasty surprise.
Lez, until they divest the shareholding they are stuck with it. They cannot unilaterally give it back. EOI believe (and they may be wrong) that it cannot be forced back (this would actually make sense to me).
Minty is no longer a director of EOI.
Lez, whilst the court case is indeed between Enegi Oil Inc (the Canadian operating co) and PVF it is quite likely that any consequence of that will be vested on Nuog.
This arises as a result of the shareholder agreement where Nuog appear (at least according to EOI) to indemnify.
Nuog are still 100% owners of EOI, at least until the point the transfer back to EOI of the equity is accepted (they have refused). There would also need to be some agreement over the indemnity.
As for billions of shares there are currently 3.3bln. C4 debts conversion may add up to 5bln, however they may not own more than 29.9% at any point.
Of course none of that detracts from c4 ability to reverse something in. But it may impact on how it is financed and the impact any uplift is market value is spread out.
It seems a certainty to me the C4 will want to do something which enables them to at least recover their expenditure (unknown amount) on the debt.
I think suspensuon is inevitable irrespective of an RTO.
If there is no acquisition it is under under AIM rules.
If there is an acquisition it is under different AIM rules.
A gm needs to convened, with the appropriate lead time etc. The voted on. Assuming it is passed then given no assets currently this means the assets size class test must fail and this therefore means suspension anyway. Then listing particulars for the enlarged group and readmission.
Partridge, I would hope rhat the cashburn has dropped anit. The expenses related to MfDevCo have disappered, maintenance of an office has hopefully reduced.
Staffing costs have hopefully reduced a bit with mintys etc gone. But of course a good chunk of that will be swallowed by the C4 chaps.
The interims are due soon. They may give some mi or indication, but it will be tricky since for the majority of the period they cover it was the "old regime". And there are doubtless certain associated cost associated with the changeover.