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Real-Time news about Afferro Min (London Stock Exchange): 0 recent articles
|nav_mike: I originally thought there was no way they would allow the AFF loan notes to convert into shares, as it would distort the ownership structure too much, however on reflection.....
Convert the shares, let the share price tank on the ensuing selling, then do a financing placing to the favoured few at rock bottom prices to restore holding % to whatever they want
Just a thought...|
|blah blah: My best guess is we will be paid out in shares which would probably be the best we can hope for. Won't do the IMIC share price any favours though.|
|gheebee: We should be truly grateful that AFF is a Canadian Company so that at least we get regular reminders of just how well the BOD are looking after Shareholder's interests in these difficult times.
"If the Arrangement is completed, the directors of Afferro expect it to deliver a higher value to Afferro Shareholders over a shorter timescale than Afferro could realise were it to continue operating on a standalone basis. The Board of Afferro also expects that completion of the Arrangement will mitigate the potential downside to Afferro's share price in the current challenging market, in which valuations for development companies with large capital cost projects are at historical lows. The directors believe that the Arrangement will also mitigate the risk to Afferro of continuing development with little certainty that full financing will be available for the construction of the plant and infrastructure for the Nkout Project."
Putting aside any discussion on the relative merits of whole life project value estimation compared with short to medium term share price calculations as determinants of shareholder value, it makes one wonder why IMIC are taking this millstone on at all, if they still are.|
|livic1971: GheeBee - I wouldn't touch IMIC shares as a PI right now with a barge pole. Its the lack of free float that makes me wary of IMIC share price and taking any shares in it prior to it raising funds. The free float is only about £1 million which is tiny and easily manipulated. I would have enough funds to drain MMs of stock and send it up two or three fold if all the other large holders were prepared to sit on their hands.
Kanabar was prepared to offer us stock before just not at placing prices I suspect. Any post TO placing is going to heavily dilute existing IMIC holders anyway and he wanted AFF shareholders to take that hit too. The difference is I think existing large IMIC holders are happy to take a small hit on their current holdings for a large slice of pie afterwards.
Consider this example...
60 million exisiting IMIC shares stable at 25p.
Agree to issue 600 million new IMIC shares to AFF holders at 25p giving a notional price of 150p per share.
Existing stable holders minimise their hit by selling the share price down to 10p before AFF shareholders are issued shares and can sell.
£100 million raised at 10p through the issue of 1 billion shares to the original IMIC share holders.
AFF shareholders finally get shares to trade and can sell for 10p.
Net effect is AFF shareholders were bought out for ~60p. Existing IMIC shareholders lose 10p/share of their 20p/share entry price on 60 million shares (£6 million loss). Existing IMIC shareholders have control of 64% of the company for £112 million outlay (AFF now valued at £166 million). The new company has £100 million of cash from placing plus £~55 million from AFF bank and no debt. IMIC basically get their 64% stake at close to cash value... AFF shareholders can sell at close to cash value with a third of the upside previously.
Notes have to be at our discretion and shares have to be at the price in the post TO equity raise or they will lose a lot of value.|
|tunnelking: apologies if this has already been posted
May 08, 2013
Stablemates Afferro Mining And Aureus Mining Are Now Travelling Very Different Paths
By Alastair Ford
They started life together, two companies born of African Aura's butterfly split and thrust into a hostile world just over two years ago.
One half became Afferro Mining, the Cameroon-focussed iron ore company headed up by Luis da Silva, African Aura's former chief executive. The other Aureus Mining, the Liberia-focussed gold developer, headed up by new hire David Reading, fresh from a successful stint at European Goldfields, which ended, as older readers will remember, somewhat controversially.
Two years on, and these companies still retain the old family ties, to the extent that they share offices and directors. But increasingly they are ploughing separate furrows, as they were always meant to do.
David Reading has in the past told Minesite that Aureus, and by extension Afferro, was born "at a difficult time". When the butterfly split was conceived the mining equity markets were riding high having staged a remarkable recovery after the ravages of the global financial crisis. No matter that the wider equity markets were still suffering, the timing was right.
The trouble was, bureaucratically speaking it takes a long time to get such things done. By the time African Aura was ready to press the go button, the tide had turned in mining and dark clouds were gathering. It's been an up and down picture ever since, as a quick look at the share price graphs of both companies makes clear.
Afferro started out life in April 2011 trading at just over 180p. The shares have never regained that level since, though they have bounced around in line with the rest of the mining sector since, hitting a low of 40p in the autumn of 2011, rising again to close to 90p early the following year, dropping back again over the summer, and then jumping up to 100p at the beginning of this year.
The current price of 74.5p reflects a certain sense of cautious optimism in the market that's just about discernible after a miserable winter and spring, and also takes account of the fact that Afferro is now in play.
... Aureus is funded through to production, following an US$80 million raise that closed off last year at C$0.80 per unit, with each unit consisting of a share and a warrant.
Over at Afferro meanwhile, the cash cushion is even greater, although there is admittedly still a very major fundraising ahead if the company is to have any hope of putting its key Nkout project into production. But in a world where no-one can be absolutely sure where the next dollar is coming from, for Afferro to have US$85 million takes a lot of the fear away for investors and directors alike.
Instead the uncertainty comes from another quarter. UK-listed IMIC, a shell company with powerful backing is circling Afferro, with a view to taking it over and running its projects for itself. Word has it that Guy Pas, one of the financiers behind African Aura and its predecessor Mano River, has a hand in the IMIC strategy, and if that's so it might explain why no outright hostility has broken out between the two companies yet.
As it is, IMIC has now revealed its plans, as we detailed here on Minesite on April 23rd, and has lately been running around trying to come up with the firepower to back up its proposals.
That process is now nearly complete, as U$100 million in financing is now in place, and will run alongside to additional bond offerings to cover the proposed cost of the deal. IMIC is also offering Afferro shareholders the chance to defer payment now to get more later. That's creative thinking, but whether it'll be enough to satisfy long-term investors who came in at a higher price remains to be seen.IMIC's connections with potential infrastructure partners are a plus, but Afferro's been on the ground for some time now, and has its own network of contacts.
Either way, one thing's for sure - for the time being any work that Afferro does on the ground - whether at Nkout, or at Ntem, where a new resource update has just been released - will be put in the shade by the bid, which now looks likely to go ahead.
All of which means that former African Aura shareholders who are still in both wings of the butterfly look to be in for an interesting few months. New Liberty seems to be moving inexorably towards production, while Afferro seems to be moving inexorably into the arms of IMIC. But nothing is certain in these markets, and we shall see what happens.|
|yumyum: The AFF price says nobody believes in the IMIC deal. What I find interesting is that no major shareholder increases their stake. That is a big negative against AFF share price (and full disbelief of the IMIC bid). I worry about that! Or a 100% negative against those big shareholders if they are asleep. I find it interesting - either the purported bid is worth next to nothing or the major money manager shareholders are asleep and therefore should be fired. Or they have zero cash. Or AFF are going bust.
We shall see of course what is the result.
I have had so far no reply on my questions to the company regarding late results or the new website fiasco. That sucks hugely....from the guys we are paying. Quite extraordinary incompetence. I really hope it is a sign of company arrogance but also of inward company confidence.
|sean cadman: I am confused, can anyone tell me why AFF share price didn't react the same way WAFM did?|
|effortless cool: I'm convinced that most of those rubbishing this offer just don't really understand it.
Let's say the takeover happens at end-June.
Let's assume everyone takes the 140p share option.
Let's assume no further fund-raising.
With IMIC shares at 24p, that means 5.83 IMIC shares for every AFF share. IMIC currently have 60.1m shares in issue, AFF currently have 105.0m shares in issue. These would combine to give 612.7m shares in the "new-IMIC".
AFF shareholders would own 91.1% of the combined entity; the original IMIC shareholders would own 8.9%.
This relationship is not massively sensitive to the takeover price. At 100p per AFF share, the AFF shareholders own 87.9% of the combination; at 200p per AFF share, the AFF shareholders own 93.6% of the combination.
IMIC is not taking AFF's cash here. The cash is still there post transaction and most of it is still attributable to AFF shareholders.
Let's assume AFF is burning cash at $2m per month. That leaves it with £50.7m at the time of the takeover.
Let's assume IMIC has £5.0m then (ignores cash raised from bonds).
The combined entity then has £55.7m cash. This is 91.1% attributable to AFF shareholders. 91.1% of 55.7 is £50.7, so we are back where we started.
Again, this relationship is hardly sensitive to the takeover price.
Could those who think that IMIC would be stealing our assets please explain why - with numbers, not opinions.|
|ridicule: currentone you are again completely missing the point I am making. Why would I want to phone the company for info when they are not in a position to issue an RNS? It would be futile! My point, to repeat it, is that the speculation element on the AFF share price is going up as the SDL position unravels. This can lead to illogical pricing of any share that finds itself in this position. This increases investor risk and the chance of a low ball bid coming in; not where I as a significant investor in AFF want to be. My point is that the AFF BoD must be cognisant of this and have failed (Possibly for good, but unknown reasons)to manage the risks to the share price that this level of speculation generates.
I agree with the points LS makes at 35721, but he has an in depth understanding of AFF value that the market lacks. Just look at the statement yesterday where the Chairman of SDL pointed out that the SDL assets had significantly increased since the original Hanglong bid. The share price promptly fell 45% overnight. Not because he was wrong, but because the unlocking of that value had become much more speculative.|
|nickdr99: Great post currantone. Key point impatient PIs are missing is that whether POSCO, IMIC, both or someone else, this type of deal does not happen overnight. The ore is still there, the demand is there, the BoD has a great track record and Cameroon needs this to happen too. We may have to wait longer here for a decent return but we can't know the timescales. Could be next week, could be next year. As much as I hate the current share price i believe in the story here. Would buy more if I didn't have so many... and may still add if falls any further. Nuts price.currantone - 05 Apr 2013 - 12:50 - 35650 of 35661I don't share the view that some seem to have that the IMIC bid when it comes (or if it comes depending on your take) will be heavily influenced by the current share price In fact I doubt it will have much to do with it at all. Of course the announcement would say something like "this represents a xx% premium over the share price at the close of business on yy date" but this is because it is the rule to do that, not because they scrutinise the share price every day waiting for a chance to get in cheap.I also believe that IMIC will not make a formal announcement until at least six items are in place:1. An agreement with the Afferro BoD over terms (obviously).2. Agreement with one of their Chinese associates to build the railway.3. Full financing agreed for the railway and any other major infrastructure.4. A long term contract to sell the ore to China.5. Government permissions, agreements, esp re the infrastructure, etc6. Routine issues like due diligence.The fact that due diligence was said to be nearing completion and may now be complete could well be a useful indicator of the state of progress of the other five. We shall see, but it is my belief that it is.The share price rose to around the 100p level about 3 months ago in anticipation of a deal and has now sunk back to the pre-bid speculation level because the average PI fails to understand that the little list above takes more than a couple of weeks to accomplish. Not entirely because of that of course, but it has a lot to do with it imo.There is far more reason to buy into Afferro now than there was in December when it was rapidly pushed up to 100p at a point when negotiations on these issues could surely not have been at anything like the same stage as they are likely to be now.And my remarks say nothing at all about any increase in the value of Afferro's assets as a result of drilling reports, etc. What the market seems to want now is certainty and nothing else seems to matter. Which is why if and when this bid is announced there will be an instantaneous markup and no second chance. AFF seems to be at near cash value in the absence of a bid, probably something like double the value at least in the presence of a bid and no gradation in between. A case of making your decision and staying with it really.|
Afferro Min share price data is direct from the London Stock Exchange