Arria Nlg Ords Share Discussion Threads

[dice1950] 04/10/2016 11:50

Guys been buying AVN noticed a lot of chunky buys recently as the FT reported they knocked back 180p bidders circling.

Avanti Communications (AVN) Bidders NAMED EchoStar, Intelsat AND Solus, Boris Skuratovsky - October , 2016

[kcr69] 04/10/2016 11:18

Hi Aja5, many thanks for your response last night, much appreciated.

While we won't agree on everything, and while I think you sometimes post just to be provocative, I do enjoy your posting as you often come up with points and angles that make me re-look at things or investigate further, particularly when those viewpoints are outside of my knowledge comfort zone.

Your last paragraph is a point in question, and as I am not an accountant or pretend to understand all the vagaries of corporate financing, I will need to re-read through the recent financial updates to try and get a view. I will come back to you, it just may take me a little while.

Best wishes.

[kcr69] 03/10/2016 20:15

Hi Kidknocked

I hadn't seen it but it would appear to have been traded over a couple of days as the trade commenced on the 30th September. I can't remember the exact pricing on Friday but there is a chance it could have been a sell as the trade price was 18.25 and the spread on Friday around the same time appears to have been 18.00 - 18.50 so right in the middle.

Who knows with the reporting of trades albeit todays price movement does suggest sell rather than buy.

All in all though encouraged more than discouraged by todays RNS.

Hope you are well.

[aja5] 03/10/2016 20:04

Kcr.....makes perfect sense,again the company has been very consistant regarding the distribution of warrants nothing has changed 2 per $ invested !
I did say earlier that a prepack is now off the table,they have circa six months to produce some income. Which again they did forecast cash flow neutral for 2017,I think they are behind forecast as cash burn appears to be higher than projected .

The one thing that's still bugging me is they have now raised £3.3 million in less than three months for short term capital requirements but not reduced the fundraising amount of £8.5 million. Let's say they move exchanges end of November they will have raised two years of projected losses (£6million mentioned in interims) WHY ?? That's not consistant with being cash flow neutral in 2017..........

[kidknocked] 03/10/2016 19:59

Hi all, been travelling so just catching up. Good debate here, so just want to say did anyone else the 250k shares purchase that was posted late today ?

[briannewby] 03/10/2016 19:43

kcr - completely agree. Just a few more weeks to wait!

[kcr69] 03/10/2016 19:36

Rackers1, thanks for the response and clarification with regard to the reposting of one my earlier posts.

Many thanks

[kcr69] 03/10/2016 19:32

Hi Aja5, good to see some healthy discussion today.

I don't think anyone is saying that the loan note holders would or should convert their loans at 40p while the share price is anything under that price, that would obviously be nothing but sheer madness.

Furthermore, my point regarding a price of 25p was based solely on a simple and theoretical calculation should the loan note holders ever decide to covert loans and warrants.

Today's RNS stated "Subscribers for the Loan Notes will receive two unlisted warrants to subscribe for new ordinary shares in the Company for each US$1.00 invested in the Loan notes, exercisable up to 11 June 2019, at 12p per new ordinary share (the "C Warrants")."

$1 loaned (give or take - 80p) would convert to 2 shares at 40p with 2 "C warrants" at 12p. As such a total of £1.04 for 4 shares which I rounded to 25p per share, and hence my point that todays fundraising when expressed in relation to the share price was carried out at 25p per share. I am most definitely not saying that the loan note holders would convert their shares and exercise warrants currently at what would be a 50% premium to the open market, nor am I trying to debate that yield as a proposition should be ignored or has anything to do with share price. I fully agree with you right now that a 5.25% yield is better than any conversion.

The key point I was making however was that if equity at some point is a better proposition to loan note holders than yield, then the equity equivalent cost of todays fundraise was 25p per share which at a 50% premium to the current share price appeared to me to be a better round of fundraising.

I will do something I rarely do and put my neck on the line with regard to what I believe will happen, solely based on released RNS and a little research around current board members, shareholder base etc.

I do think the listing will go ahead, and I think it will be priced somewhere between 30p and 40p, but to avoid a sell off which would undeniably happen at that price, the listing will be accompanied by concrete revenue news / partnerships that will underpin it. I also think the share is now a binary bet with regard to success or failure, which as described by briannewby is 'worth a punt'. I am more confident today than I was yesterday even with todays reversal in selling price.

Have I clarified the point I was making and does the above logic make sense, or do you think I am talking b*llocks?

Best wishes

[aja5] 03/10/2016 13:55

Of course it doesn't because they can't........ but they must also agree to changes in structure of the company...........not all notes are with the founders !

Again the point being made was a simple one, the share price doesn't matter the yield is the important factor. People all around the world are searching yield so they have no desire now or @50/60p or even at the made up £1.10 for that matter

But let an educated guess say that the note holders are the ones who change who is running the company and that was the reason for the small emergency last lot of funding. They company did what was asked so further funding was provided. Also note the last two lots of funding and the proposed £8.5 million fund raising also include New as well as existing share holders !!

[briannewby] 03/10/2016 13:36

Aja5 - The July RNS does not state that the loan note holders will be forced to convert on the scheme becoming effective:

Holders of convertible loan notes in the Company (the "Loan Notes") will retain their Loan Notes. As with the Quoted Warrants and B Warrants, the Loan Notes will be outside of the Scheme and the proposed amendments to the articles of association of the Company will provide that any shares in the Company issued following the Scheme becoming effective will be subject to the Scheme. Consequently, upon a future conversion of the Loan Notes, the holders will be issued with shares in the Company which will then be immediately acquired by Arria NLG Group on the same terms as offered to the Existing Ordinary Shares. So, on conversion, holders of Loan Notes will receive ten shares in the Company for every GBP4.00 of Loan Notes (based on a current conversion price of 40p, and with fractional entitlements being rounded down), which are then immediately acquired by Arria NLG Group for ten new Arria NLG Group Shares and one Bonus Warrant. The expiry date of the Loan Notes will remain 31 October 2019 and will not be extended. Holders of Loan Notes will be asked to waive their rights to have their Loan Notes acquired and/or repaid upon the Scheme becoming effective. The Loan Notes will not be listed on any exchange.

So there is nothing to prevent the loan note holders from continuing to receive interest, with the principle now due Oct 2019. They will have options on equity in the form of both B and C warrants; so can maintain an opportunity for potential equity upside, while minimising risk. Agree I cant see them converting the loans now at 40p.

Why would the funders convert warrants now at 12p, if they could access the previousiy used funding scheme (loans + warrants)? This way will maximise potential returns for them (with a downside of potential extra dilution for the current shareholders)

[aja5] 03/10/2016 12:22

At least the risk of a prepack has gone..................

[aja5] 03/10/2016 11:55

Brian...If things were going to plan and they are almost there with the new listing lets say@25p using Kcr's calculations. The loan note holders could very simply pay 12p per warrant and have them placed into the pot for the new listing!
Double their money overnight and at the same time buy the company some breathing space......But they chose to issue more loan notes with the accompanying warrants!
The company for what ever reason put the debt for equity swap in the proposal, nobody in their right mind would convert when they see the current share price
Again the loan note holders are in control.....

[rackers1] 03/10/2016 11:49

It was a light hearted play on words kcr.No hermits on his board, just helmets (ausoaf, kiddie)Hope this helps.

[aja5] 03/10/2016 11:43

Kcr...I never accused YOU of anything, you are a balance fair poster and understand the risks...fairplay
I have NEVER slated company communications or the product, I have questioned how it is monitised and how current shareholders will see value in their investment !!
Dilution calculation looks about right....

Your point about 25p........The share price has no real bearing on it at all.......If the share price was 50p and looking like going one way they will still collect the coupon for as long as they can 2019. Why wouldn't they@ 5.25% per annum??? If things went fantastic and the company came into a position to buy back the loan notes they would simply convert to equity and save the profits. No rush unless they themselves require cash !!
The loan note holders are in control.....

[kcr69] 03/10/2016 11:33

Hi rackers1

Good to see you are still posting and obviously well.

On that basis just wondered whether I had articulated clearly enough my previous questions to you with regard to your post 3572, e.g.

1. Why did you feel the need to repost my words?
2. Who or what is a helmet in this context?

Further, and this isn't directed at you rackers1, but for those who approved your post, I remain fascinated at what exactly what was being approved. I can only assume it was one of the following

1. The ability of rackers1 to copy and paste? (assuming no copyright laws exist)
2. That you enjoyed or found amusing the warmth of the comment I made that was subsequently copied and pasted.
3. That you enjoyed rackers1 describing something or someone as a helmet.

I remain interested in understanding the thought process of all of the above if you feel you have the time.

Regards

[briannewby] 03/10/2016 11:33

I agree with you the company communications have been very clear and transparent. The RNS from July (which gives the latest official update on listing progress) states:

"The Board of Arria currently anticipate that full details of the Listings and the Fundraising will be announced in the current quarter."

So no fixed timescale was given - although I am expecting an update in the next couple of weeks. I've no idea how long it would actually take to move the listing etc, but would estimate 6-8 weeks (anybody have more information on this?)

So yes, they may need money until the end of the year. But I would say these interim fundraises are the result of the income shortfall due to lower than estimated funding received via the Landstead funding arrangement, rather than clearly indicating that things are not going to plan. And if things were clearly not going to plan, would the company have been able to raise at Libor +5%?

Agree re: BB statements can be "excessive" at times; and it does not help balanced debate - can't see that changing anytime soon :-). I just happen to think this is worth a punt at this level.

[rackers1] 03/10/2016 11:19

OopsThis don't look good.Sellllllllll

[aja5] 03/10/2016 11:04

Brian....I don't need to. You see I read what the company says unlike others!!
You can not accuse them of being anything other than clear and transparent !!
What is spouted/ramped on here any other threads is the issue.....by the way cash burn appears to be higher than the projections which is probably the costs of trying to get the fund raising away and move exchanges.
The amount of money raised clearly indicates things are not going to plan,they have raised circa 5 months running money,so expect the time frame to be end of year beginning of Jan........

[briannewby] 03/10/2016 10:49

I am fairly confident we should get an update on the listing in the next couple of weeks or so... Maybe worth you contacting the company directly?

[briannewby] 03/10/2016 10:45

Aja5 - I would "hope" most BB readers would do at least a little research themselves; rather than rely solely on posted comments. For a listing at that price, I would expect a raft of deals to be announced, including concrete financial / revenue projections - not seeing much evidence of this in the current price / volume in my opinion.
But - there are obviously entities willing to lend money to keep the company going at this stage, and they will be privy to far more information than you or I. This whole interim funding situation has arisen simply because of the terms of the Lanstead funding (which was heavily dependent on the prevailing SP)

[aja5] 03/10/2016 10:36

Anyway if the listing is so so close why the need for £2.7 million ??
Everything on track my backside,they are struggling with certain parts of what they are trying to do. Which again I have been saying for a while to be ridiculed again and again...........

[briannewby] 03/10/2016 10:25

Hi aja5 - the £1 listing price has only been suggested by a BB poster; the company themselves have simply referred to a premium over the share price of 16-17p at time of the RNS

[aja5] 03/10/2016 10:17

You are assuming they will convert the debt......things need to change on the cash burn front for this to happen!
5% above BOE base rate is a nice return in the current climate,no one in their right mind will give that up without good reason,it's more expensive funding!! And it's only meeting the short term capital requirements..

The other thing to point out is if you take your figures above who in their right mind will pay circa £1 on the float just a few weeks after someone to all intents and purposes paid 25p???

The plus side is they now have running money into the new year to do what they need to,it is noticeable that the rns didn't say the cash raising will be adjusted accordingly................