tejo
26 May 2016
Re: General Meeting First of all, a huge vote of thanks to LionRock for attending the meeting, for asking the questions and for the comprehensive note, sent so promptly yesterday after the meeting. Shame on the Board for not taking you to lunch with them if for no other reason that there was a shareholder that was genuinely interested in their company.Well, where does that leave us? Hard to assess until we know how much of the sale proceeds will be returned to the shareholders and how this will be effected. However, the division that remains actually lost money last year and will now have to absorb all or part of the unallocated central costs which amounted to £3,320,000 last year. There are £5.2million brought forward tax losses available, bank borrowings, lease contracts and many other items to be resolved. I can see that it will take time and will, no doubt, be good news for lawyers and advisers.I can also see that, despite interesting opportunities for the E and M division, these, especially nuclear, will take a long time to make an impact. There will, presumably, be reductions in central staff since E and M can operate alone now, and there will be costs involved. There may well be several years now without adequate net revenues to pay a dividend and that, together with an acquisition policy we are back to the private equity scenario.What we now need is a pro forma P and L and balance Sheet post disposal and, if I have time, I may write to the Chairman, suggesting this. In addition to my own modest shareholding, there are holdings in the funds that I manage for my family. I have a feeling that, whilst all may come right again for the E and M division in a few years, I may not be around to see it and may sell my holding but leave the family holdings intact. However, will await developments, pro tem.I am so sorry that it was not possible to attend the meeting and I send Lion Rock my renewed appreciation.
Lion Rock
26 May 2016
Re: General Meeting Seadoc - Did not get chance to try the biccys, the lawyer took the 3 Board members to lunch sadly the invitation did not extend to us mere shareholder mortals...........
seadoc
25 May 2016
Re: General Meeting Thank you,Hope the biscuits were good, or did you get a beer out of them, if not I owe you one!Regards,Seadoc
Lion Rock
25 May 2016
General Meeting A short but informative meeting attended by myself and Brian Gee as the only investors other then the Chairman Roger McDowell, CEO Steve McQuillan and FD Stephen King in addition to a representative from the legal advisors.As normal practice for the Chairman, official protocol was despatched quickly advising there was an overwhelming majority in favour of the motion to sell the Aerospace division with just 100 votes against. The meeting was then opened to questions…….from the two of us!!The EV to Equity was somewhat distorted as there were modifications after the lock box these included the Rolls Royce Pipe/Tube Unit £3.5m, Working Capital Adj £1.5m, Debt, Overdraft & Tax £1.7m and the Retention in Escrow £1.7m there is also an insurance cost for this of £300k. In terms of the return to shareholders this was not yet finalised but may well be a share buyback as being the most tax efficient, the unknown factor about this of course is how many would take up the offer. I am not familiar as how this works, if one decides to keep ones shares, other than the fact one’s holding now becomes a greater proportion of the lower shares in circulation. I asked why the decision had been reached to sell the division that up to now had been the “Jewel in the Crown”, the Chairman quite correctly said the raison d’être of any Company is to maximise value for shareholders. The Board had realised that the Aerospace division had grown through a series of small, good value acquisitions that had combined to give an enhanced value overall and the value that might be realised at this point in time had probably the greatest margin available. It had been considered that to grow the division further could probably only be effected by starting a satellite in the US and this would itself bring many risks if not only from the geographic aspect hence the decision was reached, to realise the best value now.There were 10 bids for the division of which 8 were very close in terms of their offers that proved to be a good indication of the inherent value. The initial offer went some way down the road before breaking down and reassessment of the remaining bids.Turning to the remaining division E & M includes Crown that is busy with road traffic pole signage together with the production of Siemens MRI Scanners that whilst ticking over is not the volume envisaged for reasons previously indicated.The division is involved with the Future Environmental Technology (FET) where they have manufactured the equipment for the project whereby the CO2 from electrical power by Diesel motor generation is captured and, by a process of electrolysis, turned into Formic Acid for which there is a good market. The division has the exclusive licence to manufacture this equipment and the market is expected to grow as industry is rapidly looking to equip themselves with diesel generators in anticipation of the “lights going out” due to the lack of national generating capacity. Indeed the comment was made that there is a possibility that Hinckley Point will not ultimately go ahead. This brings us to the next market for business that will be the requirement for life extensions to current nuclear PS due to their preference to coal fired power stations that are being closed at a significant rate. The Board believes there will be considerable opportunities in this area in the future in addition to those relating to nuclear decommissioning. In this area the work up for the manufacture of the 3M3 boxes has been somewhat slower than hoped due to Sellafield programme delays though the production line is well advanced in anticipation of manufacture, this being paid for by Sellafield. There are some five companies in the UK capable of undertaking the work and the Board believes they will probably award work to 3 over the life of the contract. Given the ultimate order over 20 years is for some 40,000 boxes this represents only 50% of that required as Magnox will probably have a similar
seadoc
25 May 2016
Gone The bird has flown:"Avingtrans (AIM:AVG) announces that, at the General Meeting of the Company held earlier today, the resolution to approve the disposal of Avingtrans' Aerospace Division (the "Disposal"
was passed by shareholders."[link] to Lion Rock: Anything to add?
Lion Rock
24 May 2016
Re: Mission Statement Thanks Tejo: May 4th??? that was weeks ago!! 
tejo
24 May 2016
Re: AGM Thank you LionRock - may the Force be with you!
Lion Rock
24 May 2016
Re: Mission Statement Tejo/Seadoc : Well chaps I will do my homework tonight on your various questions ready for tomorrow, the trick will be how to phrase the questions without sounding too critical of the Boards actions and decisions given I have a pretty good rapor with them.Seadoc, (no apology needed) I agree I think its a done deal and given the price of the sale very few would disagree its a matter of trying to get a feel for the future. Whenever anything is in the air they tend to go very quiet, too quiet really that usually indicates something is afoot and I have a hunch that will be the case tomorrow.Will do my best!!
seadoc
23 May 2016
Re: Mission statement Thanks tego and my apologies to Lion Rock. I look forward to a report from Lion Rock on Wednesday.Regards,Seadoc
tejo
23 May 2016
Re: Mission statement Thanks seadoc but it is Lion Rock not me who is going to the AGM we hope. Lion Rock is the guru on AVG and look forward to his views a little later on.
seadoc
23 May 2016
Re: Mission statement tejo,Have a good trip to Birmingham, please report back. The board already have 46% of shareholder votes and the proxy votes are now closed so you may well get a very full disclosure at the GM on Wednesday. I see that, if approved, the transaction will complete on Friday so it is probably a done deal. I have to say that I felt a little sad to say goodbye to JenaTec, ..... but...... with the benefit of hindsight, the timing was immaculate. You my already have your own take on this but why just the SS and not the composite bit of the business? Is this the way forward for the next generation of big turbofan engines? And is the retained business just related to the blades (of which they can make very few components) or is this the new generation of pipes for jets in the same way as the blades are now all composites? Interesting times, perhaps keep £6-10m, overdraft facilities and buy up and build up a new high tech pipe business based in Nottingham and leave the "old tech" SS pipes to the Chinese.Regards,Seadoc
tejo
19 May 2016
Mission statement Thanks LionRock and good news that you are going to the AGM. Generally, I do not like mission statements etc., but in this case I think we would like to know what purpose the company has in mind. If I were there, which I cannot be, I would ask something along the lines of;" I think that shareholders are very confused as to why the Aerospace Division was sold rather than being developed, why most of the proceeds are being returned to shareholders who thought that their funds were invested in a growth high tech. company, and what are the future plans for the remainder of the company. Is it the intention to develop it further and then sell it and wind the company up, or is it to develop it into a sustainable enterprise with the intention of growing it into a large successful company. What do the Board see as their mission for their shareholders.?"I am sure that you can put this better than I and I agree we will get no more info on the deal - not that we need it because it is now decided and it is the future that matters.It should be an interesting AGM and I look forward to your conclusions in due course. Thanks again.
Lion Rock
17 May 2016
Re: Conclusions & Confusions Hi Tejo/ Seadoc - Further to your comments Tejo I have to say most of them had also crossed my mind (not a long journey). As you say are they a quasi private equity company or has it just been a case of serendipity also were there any commercial reasons involved in their decision to sell the aerospace division. Suffice to say it is my intention to attend the General Meeting next week to try and learn more about the decision and future intentions though I have to say I get the impression things are at a critical stage all round and for commercial / disclosure issues little real info may be forthcoming. Having got to know the Board over the last few years I can only say my views that they are very shrewd for such a small company have been reinforced.
tejo
09 May 2016
Conclusions and Confusions Well, many thanks to Lion Rock and seadoc for the commentaries but I di fund the whole situation rather confusing. My investment in AVG was in the hope that it would establish and develop a thriving and growing enterprise. Instead, it seems to have metamorphosed in to a small quasi private equity company. I did not invest in order to have my investment largely returned to me through a deal that does not seem to have attracted enthusiastic support for the share price. I may have my sums all wrong, but the sale price seems have exceeded the whole of the market cap of the company, thus valuing, the residual Metalcraft at zero. In theory, one should buy as many shares as possible, recover the cost when the cash is distributed and end up with a large holding in Metalcraft which will also one day be sold, I assume however that only around 60% of the proceeds will be distributed and there may be capital gains charges both for the company and shareholders. For the company, this would be mitigated by rolling over the retained cash into a new purchase but that could be risky. I still do not know why shareholders would want cash in lieu of a tech company with bright prospects under a proven management.. I see trades going through to-day @ 171p and maybe my calculations are all wrong. Nuclear decommissioning is very much the vogue but I prefer James Fisher which has been an excellent investment for me and where the focus is on growing the company.Having said all this, I remain under the influence of Lion Rock's confidence and will continue to hold and if the sp continues to fall, maybe tempted to add in order to benefit ffrom the cash distribution.
seadoc
09 May 2016
Re: Conclusion Silverfleet seems an interesting concept. £65m is at the lower end of size of company they help to develop. Most companies are turned around in about 5 years but this may just reflect the slump in 2008-9 and resulting surge in 2010-1. The nature of companies helped seems to reflect the full range of sectors though retails does seem to be prominent in the list of companies at present under their wing, and also in UK companies brought back to market in early 2000s. I see the majority of companies now in Germany, perhaps this explains need for approval of deal by the Austrian authorities? The announcement makes it seem that the management stake in Sigma is not huge:[link] back 30 years the expertise was medical and nuclear so perhaps a return to roots? The purchase from RR to make a viable stand alone division and quick sale does show sensible vision from Mark Johnson the management remaining on board. I am still interested that 3/4 of the company will be sold off for about the market cap of the whole group so essentially the medical and, growing, nuclear business is "free". I did manage a top-up at 186p on the 5th May, now showing a small loss so I must be missing something that the clever people in Canary Warf have spotted.Regards,Seadoc
