The latest Investing Matters Podcast episode featuring financial educator and author Jared Dillian has been released. Listen here.
If you are an investor who invested a hypothetical 5k during the hype from a couple of years back then it is quite likely that is worth less than 200 quid.
If you are a long term holder of over 5 years standing then it is quite likely that holding is down to 25 quid. Or worse.
Some people in that position may think that losing that is less important than the official receiver (i doubt any insolvency practitioner would touch it with a bargepoke due to the financial state not allowing their high fees to be paid) sorting out the mess.
With the debt from MfDevCo to Nuog the OR will try and collect that first. That might just cause Minty a lot of grief. If the OR finds evidence of wrong doing they might just be able to censure Minty. They might just be able to cause him a world of pain personally.
I don't think it is particularly likely Minty will get insurmountable grief but there is a small chance. Some may well consider losing the tiny bit that remains of their investment a worthwhile price to pay.
Voting at GMs is almost always a very low turnout. Generally those with a strong feeling against vote. Few else bother.
Longer term holders, and those who have bought in the last few weeks do have very differing motivations.
When you contra off the MfDevCo debt to Nuog against The RMRI debt from Nuog he is not paying very much at all for the balance of MfDevCo.
I would be very surprised to see it fail. But tying the vote for Mintys final payment as 90m shares to the overall scheme may be unwise. A lot of LTH may be very against that.
It may well be the case that C4 are aware of that risk and hope to counter it by adding some meat to the bones of their proposals and announcing more specifics before voting closes (though that might be tricky for them. C4 cant RNS anything. They are not Nuog. The nomad would surely not allow an RNS which was in effect just a mouhpiece for C4).
SBP, I understand that.
There can be many reasons. Indeed the potential 8m tax credits and the 65% of equity controlled by C4 may be enough reason for that to add overall value to both parties. (Do C4 actually own any such assets?).
It is fair to assume they have a plan. We will just have to wait to find out what it is.
But if those assets were worth 5m they are unlikely to just give them to Nuog.
The asset owning entity is getting 100% return on those assets.
If they reverse them in they are getting 0% (of maybe a better return allowing for tax credits).
There will be some horse trading of some description and that needs to b factored into the price.
MM, that's true. But it wouldn't have been forced upon Shard. They would only have exercised the security if they saw current value in it (which they might have).
Jarv, looks fine to me. It is again another bullish way to look at it. If it can breach the recent intra day high around 0.1 it is in fresh air.
Ultimately price action is short term bullish. However you look at it.
Lack of activity is the only issue really, it has quietened down a fair bit.
Nobody knows how much. I would expect it was at a very substantial discount. The alyernatkve was Shard receiving nothing.
All true.
C4 are also HIGHLY motivated to avoid dilution as far as possible. Incoming asset finance will be interesting.
There isnt a 5 year ceiling.
The loan notes are not going to expire worthless after 5 years.
If they haven't been redeemed they simply fall due and there will be a renegotiation of terms.
Ultimately C4 will get about 60% of the equity, dropping with any further placements.
Existing holders about 20% again dropping with any further placements.
Its quite a bar. But as you say if they make multiples it us fair enough.
If they dont existing holders are not going to see much additional pain. But new holders will.
Jarv, often the recommend just seems to not work.
J55, If you step out to the daily then there is some sort of triangle from the lows and it looks to be breaking out. It also appears to have some sort of base formed at the midpoint of that mover up around 0.0675. A measured move from there would still be targeting about 0.125.
There is some chance this link my show my clumsy phone picture.
https://linksharing.samsungcloud.com/contents/view?contentsToken=1570698707524CkOTj19¤tIndex=1
J55,
I would assume that shard have now reliquished their call on Pl2002-01. So within the intent of your question yes, they shupuld he able to do what they want within (subject to DNR acceptance).
Pedantically though the NUOG cannot (and never gave been able to) do anything with it. This is simply because it is not their asset. It is controlled by EOI.
Currently it is the same effective thing though because NUOG have full control of EOI.
BH,
I have always liked this TA:
https://live.staticflickr.com/4003/4633000725_8817dcedb9_b.jpg
Harv,
We are on the same page. I just didn't describe it very well.
It looks like 3 has started in the higher degree (and it should be a 5 wave move). Should target at a min 0.125 and should not dip below 0.65.
So you are hypothesising this is another 5 wave move from 0.065.
If true this is 1 of 5 and should itself be a 5 on a shorter timeframe.
It could still be the C developing of course though with A=C the corrective move could well be done.
Have to wait and see but it does look reasonably positive.
Jarv,
You highlight the correct issue. That is where are the losses chargeable. Which accounting regime do they apply to (As an aside some of the Canadian losses are under the canadian petroleum duty regime and some are under the "flow through" equity regime).
However if you look at the group accounts for 2018....
" Unrecognised deferred income tax assets are reassessed at each
consolidated balance sheet date and are recognised to the extent that it has become probable that future taxable income will allow the deferred tax asset to be recovered."
Check also note 6 on page 49. That gives accumulated UK tax loss at 8.377 plus canadian asset pool at 1.746.
That uk loss will have mainly arisen as a result of the difference between EOI funding and it current carrying value. Those should still be reclaimable against future uk chargeable profits.
It is of course no way as simple as "heres a cheque for 8.3m".
Gary, it wouldn't necessarily have to be a producing asset. But it would have to be something that is producing a tax liability (in practice this is likely to be a producing asset).
However there could be other circumstances. Eg they reversed in an appraisal licence. They did some work on it. Then they sold it on for a profit. That amount in excess of its its cost base would usually be subject to CT. It is simply a trading profit.
Some of the accumulated losses could potentially be claimed. HMRC ultimately make a decision on the claim. If the company dont like the answer they start off the dispute at a first tier tribunal in front of ether the general or special commissioners (usually the later since it will be highly technical).
Usually you would not be able to get "pre transaction approval". So you cant let the tax tail wag the revenue dog.
Gary, kind of. From the accounts the totals were 8m and change of potential deferred taxation (ie reliefs available) and 1.5m ish in EOI. These Canadian reliefs are lost starting from 2026. And lost should EOI be divested.
In the event that NUOG were absorbed into another entity (which doesnt appear to be happening) then the losses may be utilisible against profits elsewhere in the group. Both on a carry back and carry forward basis, though carry back is as you say time limited.
If an asset which is generating income (and for this purpose asset could be anything) is revesed in there there would be no historical carry back (though there may be some limited circumstances where some loss relief could be obtained).
However, going forwards that 8m odd can be claimed against UK tax payable (and limited to that amount). If, for example, Irish profits were made then those are going to be subjected to Irish taxes and the losses could not be used against them.
However those profits may be subject to some Uk taxes (generally the amount in excess of the foreign tax). This net amount could be relieved. Thats the simple bit.
It must be noted though that thelief regime is based upon "trade". It has to be the same trade. So if they reversed in a online store for example then profits from that would not be eligible for relief (different trade).
However I wpuld anticipate that any new asset would allow the relief of the first 8m uk tax.
Rather like should PL2002 have returned a net profit to the Uk that would have been eligible for relief.
Regarding the debt the RNS states:-
"The Company has been informed by Shard Capital Management Limited (“Shard”) that it has sold its loan
owing to Shard by Nu-Oil to C4 Energy Ltd (“C4”), a UK incorporated private company."
It then goes on to state:-
"Subject to approval of the Company’s shareholders at a general meeting to be convened (the “General Meeting”), the Loan
Notes will also have conversion rights".
Perhaps it is just sloppy drafting.
However this appears to state that the sale of the debt is totally unconditional. The words were "has sold" not "will sell". Only the authority to convert is being sought at a GM.
As the RNS written if the resolution fails the C4 will hold the debt, but have no ability to convert and no board representation which surely cannot reflect the intent of the proposed transactions.
Presumably just a drafting error. But sloppy.
No. The cant just have a resolution to say "these 0.1p shares are 0.01p". The equity exists and is of course included in the capital accounts.
What they can do is split them. Eg created 1 new ord of 0.01 and one deferred of 0.09.
There is then a new class of share. These can have different rights. Eg no right to capital dividend or voting (*). These need to be reflected in the articles.
The deferred are still accounted for in the equity accounts but are obviously worthless given they gave no rights. (Semantically The owners of the deferred shares could trade them but only by private treaty since there is no exchange they are quoted on.
Subsequent to that there is a case to be made to consolidate. Say 100-1 (increase the nominal of course). It would certainly improve tradeability.
(*) in nuog case the deferred shares do have a theoretical (but meaningless) right to capital. In a winding up the ordinaries have the right to only 10 mln of capital (each).
It has just been pointed out to me that they already state in the RNS there will be a resolution for a capital reorganisation.