Percylleyn

Knicl46. Share price and share value. Share price is what someone is willing to pay for the share. Share value ids the balance sheet total divided by the shares in issue. Latest NAV Dec 2014 was minus 14.4p per share. Current share price is plus 12p. Why is the share trading at a 26.4p PREMIUM to its value? Because there is a reasonable expectation that the company can sell the main asset for £50m, it is already priced in. The punt is that every £10m above £50 sale price adds another 5p to the share value. The unknown is how great any additional losses will be for the eight months since the last accounts and what financial provisions will have to be made in executing the sale(e.g. the PONO loan etc). My view is the maximum upside is another 20p, but there will be significant deductions for currrent company expenditure, PONO, environmemtal obligatios etc. Good Luck. .

Re: SP if deal fails. I’m out as the risk now exceeds the reward. RISK: Price when Restone dilute will halve. Price when deal falls through will halve again. Market confidence will take it down further. 2p to3p. At which point Redstone owning 53% of the stock could buy the remainder for £4-£6 m, and do a private sale of the asset and pocket the lot. REWARD: Even at the full £96m I reckon the NAV per share not to exceed 33p, however, the market never pays 100pence in the pound for balance sheet cash so do your own discount. The deal only has to reduce to £70m and shareholder value comes down to 15pence. I jumped in before doing enough research. Why do discussion members not reveal the elephant in the room. In this case multiple elephants: Share Issue rising from 95 to 180m, Negative equity on the balance sheet and evaporating current assets with a sale, and monthly cash burn since December, all add up to there being no solvent business here. A sale is a must, it is just a question of who will get the proceeds. Finally for those who think a JV would be OK the Company has turned £260m of shareholders cash into minus £14m on the balance sheet- why do you think their future performance will improve? Good Luck to all braver than me to see this one through, I hope you catch the spike, not a cold.