dandigirl
30 Mar 2018
Re: It is as I said Interesting - and MFX is an intriguing set up. With nearly 70% held by 5 names and given some of the loans to and from, it is hard for me to escape the feeling that it is a bit of a plaything for some.It’s tough making a profit on a capital of only £17m. Servicing these loans, remuneration packages at the top and the costs of regulation and compliance make it more difficult. Who pays for all this, some higher risk assets on the other side, I suggest.I would also suggest that before allowing another capital raising, their regulator will want those convertibles addressed. What a pity for the holders if they are required to convert as a pre-condition! (Smiley face here). Mellon and Co can hand on heart say conversion was a regulatory stipulation. Of course, conversion increases the 70% figure..More than likely, MFX is a nightmare for both regulators and auditors. NB the Key Audit Matters in the annual report.I shall watch with interest as to the actions the board takes in the coming weeks. But here’s wishing you and Castleford Tiger good luck with your holdings.
M1keG
30 Mar 2018
Re: It is as I said The loans in question (only the two) now convert on the whim of the bank, though I agree there is a good chance the non exec turkeys are not going to vote for Christmas.The warrants converted at 6p this year (nice six figure earner for the Doc) and the price did not flicker. Would I have liked the convertable loans to disappear too, Yes, as they only add to this discussion about dilution. Which we seem to be having again 
I have close to 1m shares here and although progress is (seems to be) snail like I have a 40 pct gain and have only the worries of only 40pct shares in private hands. Risks are being taken to promote growth and you cannot have one without the other.
dandigirl
30 Mar 2018
Re: It is as I said Mike. Thanks. Like you I am trying to help out. It is plain wrong for it to be asserted that the sp should be 25p without any substantiation whatsoever. I do not have a share holding nor do I intend to. There are just too many things to try to understand.The treatment of debt - all debt - for regulatory capital purposes has changed in recent times. It has to meet certain criteria - too long to post here - and these loans don't and, again, if there is to be off-set asset against liability that too has to meet strict criteria if capital allocation is to be avoided.I think that you are reading the wording in a way that some would like it to be read.However, if we could see a recent ICAAP that should settle it.Just to add though it is all very well for the Chairman to indicate that additional equity is required on a non-dilutive basis against the background of a bunch of loans convertible at prices way below existing. I look forward to MFX raising additional capital on this basis. Should be interesting.
M1keG
30 Mar 2018
Re: It is as I said The paragraph starts and end about Capital, its logical to assume the bit in the middle is about captital, even for those who have not followed the company history.From 2015 Annual reportquoteThe two outstanding Convertible Loan Notes ("Notes"
that were otherwise due for maturity on 26 February 2015 (see note 23) have been extended by five years. The Notes together total £1.71 million, of which Jim Mellon, the Group's Executive Chairman, holds £1.25 million and Rock Holdings Limited (subsequently assigned to Southern Rock Insurance Limited), a company connected with John Banks, a non-executive Director of the Group, holds £0.46 million.As a result, and having considered other methods of raising capital, the independent Directors have resolved, following negotiations with the lenders, to extend the two Notes for a further five years to 26 February 2020 at a reduced interest rate of 6.5%, down from the previous 9.0%. All other terms remain as those announced on 2 March 2010unquoteIts part of the Tier 2 capital of the bank, there are more references but if you don't think so thats fine, just trying to help out.
dandigirl
30 Mar 2018
Re: It is as I said Thanks. Read that. It does not assert that the existing short term loans firm part of the regulatory capital.
M1keG
30 Mar 2018
Re: It is as I said QuoteMaintaining and increasing our equity is fundamental in ensuring future growth to provide additional profitability. During the course of the year, I and my interests agreed to extend certain loans, at terms negotiated on an “arms-length” basis, that became due for repayment. As a result, both the coupon and conversion price for these loans have been changed in line with the market to 5% and 7.5 pence respectively (previously 7% and 4 pence). The Group will, however, require further regulatory capital to support the Bank’s planned expansion and the executive is currently considering a number of ways in which we can expand this capital, but with the proviso that this will be only on a non-dilutive basis.Unquote
dandigirl
30 Mar 2018
Re: It is as I said Maybe, but they aren’t, insofar as I could see.
M1keG
30 Mar 2018
Re: It is as I said Not all the loans are used as part of capital requirement, many appear to be matched against a particular block / customer. Borrow at 5 lend at 7 etc.The two convertable loans to Banks / Mellon can be classed as Tier 2 capital and can only represent up to 25pct of capital requirement (Basel III), so these are for regulatory capital purposes. Its stated by the company in their Annual Report. They are obviously looking at issuing a convertable bank bond or equivalent to increase the capital base to cover a surge of growth greater than present capital base can support.
dandigirl
30 Mar 2018
Re: It is as I said If you did indeed spoke to someone in MFX, and I have my doubts, they too didn’t understand what constitutes “regulatory capital”. Bye bye. X
dandigirl
30 Mar 2018
Re: worth 25p on what we know I also suggest that you set out the basis on which you consider these shares are worth 25p? On reading past posts, you claim to own 2m shares? And you want 30p per share? Hmm! Are you trying to get some more mugs to join you on the shareholder register, are you?
dandigirl
30 Mar 2018
It is not! CT: No need. Suggest you take a little time to understand what constitutes “regulatory capital” and read the annual report where you will observe that these loans do not constitute part of the equity and are above the line with all the other liabilities.
CASTLEFORD TIGER
29 Mar 2018
Re: It is as I said Ask the companyTiger
dandigirl
29 Mar 2018
Re: It is as I said I stand by my first sentence. Of course banks take on liabilities in order to create assets but I do think that the short term loans provided here can be considered as “regulatory capital”.
CASTLEFORD TIGER
29 Mar 2018
It is as I said Regulatory capital to grow the businessTiger
CASTLEFORD TIGER
29 Mar 2018
Re: worth 25p on what we know So in your opinion what are the loans for? It’s a Bank and has lots on deposit. I will ask the questionTiger
