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This damning article about Ivanishvili’s stranglehold over the country and his self-interest and defence of Russia’s interests makes it hard to see a way forward for Frontera. Arbitration and continued US pressure are all we have. I can see why supermajors have been reluctant to invest in FRR. Can anyone see a way though this political swamp ?
The mention of the 'unsafe' railway line which is stopping transportation of oil by train is yet one more obstacle in our way. It really does seem is if Georgia is trying to freeze out FRR. Where is the VAT rebate ? Who was shorting the stock ? Who was leaking news ? Zaza and the US will have to pull off a miracle here.
Have to be ....
Typo
Looks like the Georgian PM is in a conciliatory mood. Who knows how this will play out? FRR have always been at odds with the Georgian Govt and its frequently changing PMs and Energy ministers. What matters is who is really pulling the strings and how much pressure the US can apply. Zaza and Steve have to never fighting for some kind of return on the 20 years of their life invested here and millions of their own money converted into shares. If they succeed in monetising their shareholdings through a compromise deal then the rest of us just might escape this situation. Feels like we are nearing the end one way or another.
Good point Gipps. The GG want 99% and FRR want $ 3.5 Billion in compensation. It’s reasonable to assume these are bargaining positions. Of course the GG may not be able to stump up the $400 million of sunk costs (given that they can’t even afford our VAT refund) so the supermajors may have to be part of any compromise deal. The political mood music suggests that a multi-level negotiation is ongoing. How it plays out is anyone’s guess given the leanings towards Russia of the Georgian Dream party and their billionaire leader. Let’s hope that Zaza can get 3p per share at least and that we remain aligned to enjoy the spoils.
Jackpack, it wouldn’t be the first time that Hope has colluded with Russian interests.
The letter also mentions that Facebook has ‘shut down an extensive network of accounts linked to the ruling Georgian Dream party’ for coordinated attacks on the US. We are in the middle of a turf war and a propaganda war. We now have overt US government support but the Georgian Dream party has Russian backing. Who knows how the arbitration will turn out - despite this letter ? And we thought when we invested it was simply about proving up the assets ! I wonder what dark forces are supporting Hope in this geo-political battle ?
Symore B on iii, has posted the letter from the US Congress threatening sanctions if Georgia doesn’t stop impeding (and appropriating) US businesses such as Frontera. That’s some serious leverage we have - but equally we clearly need it.
‘GEPlan Senior Geologist Angelo Ricciato said “Onshore Georgia and in particular the Kura Kartili Foreland Basin may turn out to be one of the most exciting emerging hydrocarbon plays of the coming 5-10 years.”’
We are waiting ...
Is Zaza's son going to be trading his dad's shares soon ? If so, let's hope we are all soon going to be in a position to resume trading FRR shares. We can but dream !
Sonnyclimes - that’s a plausible theory. Zaza might be moving his shareholding somewhere harder to access by Hope’s lawyers. But who knows? The plot thickens. Oopsi, do you have a view on this ?
It's still all guesswork a year after de-listing. And we are all, understandably, frustrated and searching for plausible scenarios and outcomes.
Zaza initiated the legal action against Outrider / Hope presumably as a delaying tactic when cash flow was inadequate to meet our debt obligations. He may have been badly advised about the chances of winning the fiduciary duty case or it may have just been a strategic move to buy time. Either way, the legal battle in the Caymans and then California has hardly shown our case against Hope to be strong. There might be a smoking gun (evidence of foul play by Hope) but we are no closer to seeing it brought out in court. Hope is now off the board and FRCC is in the process of being liquidated. Hope is pursuing Steve N and Zaza in the Texas courts. Is this all now a side show ? Or will a deal be struck with Hope ?
The Arbitration case with the GG may be close to a conclusion. We don't know how that will turn out. The most optimistic interpretation is that with Hope off the board and debt cancelled / restructured, the path is clear for a deal with super majors and /or with the GG or for a big new loan to revitalise the company.
We know that something is being kept secret in the California courts. We know that the GG have not taken back FRR's operating licence (yet). It feels like deals /compromises are being thrashed out. But there are so many variables here that the final outcome is impossible to predict. The company is hanging on against the odds. The news from Georgia is hardly encouraging although Zaza claims the worst could be over by the end of this month. Zaza has probably exhausted our trust in his promises but maybe his determination will finally succeed. Good luck to all shareholders. 2019 was a nightmare ride. All the best for 2020.
So, a rumour of 70 million in an unspecified currency has now become 70 billion dollars and all will be settled by Valentine’s Day ! Simple. What were we ever worried about? If only ...
PJ - impossible to know at this stage whether or not, as you put it, Zaza has ‘played a blinder.’ Even harder to know whether the shareholders have been ‘kept in the loop’ in terms of seeing the benefits of any cunning plan. The last year has looked like desperation and a forced hand rather than skilful manoeuvres. Maybe Zaza is about to pull the mother of all rabbits out of a hat and we will share in the rewards. I’d love Madpunter’s theory to be true and I’d love to think Zaza will remember all those shareholders he courted at the London meetings. For the time being, it’s still all guesswork and cloak and dagger politics - and unpaid workers and corporate silence. GLA. 2020 has to be better than 2019 even if it’s only confirmation one way or the other.
Hard to know if these ceasefire talks between Ukraine and Russia have any bearing on Georgia and FRR. The regional politics are so murky that a close-to-bankrupt small company fighting legal battles on several fronts can’t be anything other than an enfeebled player in this game - unless we really do have multi-national back-up waiting to reveal its hand. Fingers crossed. GLA
By the same logic, Hope could have been hedging his CLN repayment by shorting FRR shares. YA may have been up to the same game and were rumbled by the company. All speculation but clearly plausible judging by the Premier Oil example.
Good post, Phil. How much is 5500 tonnes worth ?
Zaza said he wasn’t expecting to get this VAT refund in cash but it would probably be off-set. Maybe they are trying to get the govt to pay the wages out of the VAT refund. Desperate times. I guess we have to believe that oil sales have been used to pay lawyers or shore up a war chest for the OMF debt. Of course, we have no idea how substantial the oil revenues have been.
Thanks, MadP. So an orchestrated blocking tactic. Tim deleting Zaza’s phone number did seem weird. Let’s hope all this chicanery works and we don’t find ourselves outplayed by bigger forces.
Madpunter, are you suggesting this is a positive strategy (to be incommunicado) ?