Courtier1
21 Mar 2018
Re: rights issue price!! I personally think there will be an institutional placing for a chunk folllowed by an underwritten open offer. The placing done based on their existing permissions which means cash can come in immediately to settle debts with the open offer following pending an EGM. For that portion they may as well offer same terms to existing shareholders.We will see shortly I’m sure. Can’t imagine it would be much past early next week else risks of insolvency go up dramatically
TX2
21 Mar 2018
Re: rights issue price!! Assuming the new shares are being taken up by existing shareholders in proportion to the number of shares originally held the price at which the shares are offered is not relevant.For example a one for one offer at 60p would cost the same for shareholders & raise the same as a six for one at 10p!If the company had enough investors from existing major shareholders who would subscribe the required £120m or whatever is required it would be foolish to price the shares at a lower price. The risk to small shareholders in particular is that the shares will be offered mainly in a placing to existing larger shareholders,who control the company & they could be cut out of the picture in whole or part.It is highly unlikely that the fund raising will be in the form of a rights issue.It is important to understand the difference between placings,open offer & rights issue.
pyueck
21 Mar 2018
Re: rights issue price!! 'Problem wasn’t that the business wasn’t generating cash - it was. The problem was that the cash was all being used in acquisitions and financing and dividends without adequate headroom'You sure about that? You seem have so much confidence in a company which has pretty much admitted they lost control of basic financial controls.
Courtier1
21 Mar 2018
Re: rights issue price!! Very much depends on trading levels since the debacle first came to light I’d say.I am not long so have no bias. I expect it to be saved as there are decent businesses in there, just wrong and poorly executed financial strategy.At 10p it is basically a wipeout of equity and a renewed focus. I would imagine if something’s is done at those levels it will also come with a capital reorg of maybe 10:1 to reduce shares in issue. We shall see. I am interested in taking a position depending on what the market cap is.Problem wasn’t that the business wasn’t generating cash - it was. The problem was that thwe cash was all being used in acquisitions and financing and dividends without adequate headroom.
Bill1703
21 Mar 2018
Re: rights issue price!! "There is talk of 10 p ... "There has been (pretty convincing) talk of 10p since the Sky News article early on Saturday, which always seemed very well informed.Self-evidently, if this latest talk of £130m is also "reliable", then 1,300m new shares against 183m currently - diluting existing holders down to a mere 12% of the new equity base. So forget "old" CVR - this'll be a new stock, to all intents and purposes.Question is, is it worth taking up rights (assuming full participation is even on offer) - or getting in anew at this level? On the basis of what we actually know thus far, could be a strong Buy ... then again, if what we know thus far is at all related to the true picture, then it's very hard to see why they need to raise £130m. New stock, new management (in due course)... entirely new set of prospects, and forecasts...
frusset
21 Mar 2018
Re: rights issue price!! Yesterday's Evening Standard"Jim Armitage: Steer clear of Bargain Booze owner Conviviality's fundraiser to avoid a hangover"[link]
peddlar
21 Mar 2018
rights issue price!! There is talk of 10 p ...
pyueck
20 Mar 2018
Re: RNS Hunter gone I would suggest that nobody has a clue if they are making £50m profits as one can have no trust in anything this company says. Even if they are making this, it certainly hasn't translated into cash, as they need bucket loads of it to stay afloat. In the absence of anything else to go on, I will judge this company on it's ability to generate cash (business model should have pretty consistent levels of capital expenditure, so cash generation can't be far wrong). Based on cash generation the company is a basket case. Can't see any reason for this one to be bailed out. Expecting a collapse therefore. Bad companies seem to think they have a right to lose more people's cash, they don't.
Courtier1
20 Mar 2018
Re: RNS Hunter gone But also you won’t have or be given the information to make a decision as to whether you would underwrite it.I’m not sure people have read the announcements and are making like for like comparisons here.The company has clearly been badly managed given the disclosures. I think we all agree on that!! I think we all also wouldn’t rule out more worms comin out from the proverbial can!However, the core thesis is this..... the company made an error in forecasting and profitability expectations slipped to £50m.....not good! The company then realised that the cash flow forecast was missing an expected payment to HMRC of £30m.......much worse as this is immediate cash flow drain and the company had limited headroom.However, the £30m doesn’t drop off p&l as it was an expected number just missing from a crucial financial tool (cash flow). If the company had the headroom it would have been far less of a disaster but they were too highly leveraged. The £8m dividend recall actually makes the end debt position better ultimately as the £30m had also been included in that number.The problem is liquidity - they have none!What we do not know is what trading damage has subsequently been caused as insurers pulled trade insurance from suppliers which, in turn, would cause suppliers to change credit terms (cash flow again) and probably mean the company is unable to fulfil all its customer orders (no payment - cash flow again). This is the key in my opinion to the whole house of cards. A quick resolution and return to trade insurance will quickly put the business back on track. A protracted suspension and/or worse trading conditions and/or more financial gremlins could put it under.A business capable of making £50m+ is worth saving for £100m injection and a change of management. The info we don’t have is what has subsequently happened to trading and customers.
cooperboy
20 Mar 2018
Re: RNS Hunter gone I'm sure that unfortunately you are probably right-a financial can of worms-i was just looking to cheer people up before the next dire RNS-personally I had a quick in and out dip and made a few hundred pounds-unfortunately i then broke the cardinal rule and went back for more
megaloss
20 Mar 2018
Re: RNS Hunter gone It doesn't work that way cooperboy....when you adopt the creative accounting mantra too aggressively you book the sales twice and forget about the costs....there are NEVER any undisclosed profits!CVR didn't even make the third profit warning (a tradition, like London buses) before effectively throwing in the towel. I suspect there's quite a bit of seriously dodgy stuff not yet uncovered, there always is...
cooperboy
20 Mar 2018
Re: RNS Hunter gone well you never know-perhaps there is a load of profit they haven't accounted for.....................
pyueck
20 Mar 2018
Re: RNS Hunter gone You seem to still have confidence in any number this company has reported, why? If they can't predict a £30m tax bill and their accounts also included an arithmetical error what is the chance that their accounting is correct, or for that matter anything is. This is clearly an operation with seriously lacking internal controls.The company suddenly needs cash, this tells me one thing, the company is burning through rather than generating cash. Why should I believe this will change? From the evidence I have available to me I can see no reason what so ever to put a penny more into this.
cooperboy
20 Mar 2018
Re: RNS Hunter gone did they not say though that their profit was circa £50 million - from this the IR will take £30 but the cancelled dividend adds £8 back in (more for the year) so assuming there are no other gremlins (yes big assumption i know) surely the company would still be solvent
pyueck
20 Mar 2018
Re: RNS Hunter gone Courtier, I wouldn't underwrite a rights issue at 25p, doubt any bank will!Still not sure they will get any fundraising away. As we have seen recently if banks/investors are not convinced that this 'short term funding problem' isn't actually caused by the business being a basket case then funding will not be forthcoming.Sometimes these mess up's happen because the business doesn't actually make any money and therefore it is right that they go out of business rather than companies thinking they have a god given right for more investors money. What evidence does anybody have that this company is actually profitable, I don't believe a word of any previous statement issued by the company?Clearly Hunter has been forced out, maybe that's a good sign as this will surely be one of the conditions that any investor/underwriter has put on any rescue.How people like her are able to just sail off into the sunset with the huge salaries and bonuses they received for terrible and often misstated performance is an indictment on the current regulatory regime.
