|Breaking out today, nice and cheap still|
|moving along nicely|
|looks a decent RNS IMO|
|Just bought some and showing as a sell|
|Hmmm profits much higher than expected well eps based on unchanged first half was going to be 6p , so lets say 7p , even with the new shares the pe is going to be less than 3 .... And growing fast now too....|
|And there's the reason for 1m director buy - "materially higher than current market expectations"|
|I've just got home from work to see a director buy of 1m shares.|
|I still think compared to the 250m of dilution that was due to happen this is an excellent outcome, minimal current dilution and in effect they have 3 to 8 years to be able to buy back these prefs, there is a huge incentive to get the share price higher now, they have very strong ebitda and over the next three years I am sure they can get the shares re-rated and do a placement or rights issue at better levels to buy back the prefs...my only regret is not buying more sub 8p|
|.... or a dilution is coming :-0
Meeting in Lusaka yesterday (September 8), shareholders agreed plans for the company to raise US$65 million in new capital in order to take full ownership of the subsidiaries, as well as further reduce its debt levels and fund capital investment plans. The transaction will also lessen Zambeef’s exposure to exchange rate fluctuations.
|Going up almost every day, maybe we se a substantial holder rns soon , someone is buying ...|
|Looking like we are inching up to the 13.5p level, whatever you think about the new deal its a substantial injection of cash that solves some current major problems and lets them focus on a 5 year horizon, I will be interested to see how the company present the deal at the next yearend / company presentation|
|thanks spooky, nice insights|
|200,000,000 shares at 13.5p is equivalent to $35,640,000 at current exchange rates. If they redeem after 3 years they are paying $22,000,000. The $13,640,000 difference is equivalent to 3% compounded over the last 5 years, that's very cheap so i don't think it makes sense to redeem. Once again IMO and rough numbers. Obviously if things went spectacularly well it may alter the equation but i think management will want to use free cashflow for expansion.|
If Zambeef's "ballpark earnings are £15,000,000 after tax" then why would Zambeef with all this profit (and hence cash) not issue redemption notices well before the 8 years so as to force a conversion ratio of one to one rather than the 3.0833 ordinary shares to one preference share ratio that applies after 8 years?|
|Zambeef will not redeem the preference shares, CDC will convert in 8 years so essentially they are issuing 300,000,000 for $55,000,000. In valuing the company i would proceed on the basis that there are now 600,000,000 shares. Thus the current market cap is circa £66,000,000, ballpark earnings are £15,000,000 after tax which puts them on 4.4 times earnings IMO. These are obviously just rough numbers.|
Given the existence of the RCL put option and the effect of events over the last few years (tax dispute, disagreement with Zambian government of beef quality, and forex impact of USD debt) on the share price I don't think Zambeef had much choice.
I agree that in essence the convertible is a 12% loan for a minimum of 3 years with interest rolled up with with CDC getting the benefit of any upside should the share price increase beyond where it was a while back. Also bear in mind that the cost of debt in 2015 was 11.7% anyway. And as CDC do not have the right to receive cash (interest, dividend or repayment) then from an accounting perspective I do not think the convertible will be accounted for as a debt.
So Zambeef will be largely debt free and if it can consistently produce EBITDA at the level it did in the interims ($15m for 6 months) then it should not have any problems redeeming the convertibles before year 8.|
|Exactly Valhamos, they are attempting suicide and betting the house on the share price in 8 years.If they couldn't pay RCL options due now then how on earth they going to pay back the pref shares. The thing they most don't get here that this is just another form of debt issuing, it isn't really an equity investment.In 8 years time this will be called CDC group if not way before that.Watch out for a heated voting in the EGM, won't go down easy for existing big shareholders!!!|
paul the octopus
|Thanks catsick for of pointing the 0.55/3 bit, but I shall refer you to the following extracts from the RNs"The Preference Share Dividend, shall following a resolution of the Directors declaring the Preference Share Dividend, become a debt due from and immediately payable by the Company to Preference Shareholders.""to refinance USD 38,200,000 of the outstanding debt of the Group;""Through the issue of these new shares we are able to finance the purchase of RCL Foods' outstanding equity stakes in both Zamhatch and Zam Chick, refinance a significant amount of our debt, as well as provide additional working capital to accelerate the roll out of our new macro outlet stores."It's not all of the debt paid though.|
paul the octopus
|Paul the Octopus
I agree with your analysis (as per my earlier comment this morning)
CDC have 35% voting rights (from ords and prefs). The preference shares will convert on a one to one basis before 8 years is up giving CDC 35% of ordinary share capital.
If Zambeef do not issue a redemption notice before the 8 years, then CDC will have the right to convert on the basis of 3.0833 ordinary shares for one preference share which would give them 59% of the company. Also I note that that scenario also applies in a takeover situation when an offer is made for the company at less than USD 0.365 per share.
Note also that the redemption price of the prefs (relevant if CDC choose not to convert) is the $0.555 subscription price increased by 12% p.a. (with a minmum of $0.77 reduced by any preference divdends). The $0.77 minimum represents 3 years return therefore I expect Zambeef to start issuing redemption notices after 3 years.
So a good deal but only if CDC convert or Zambeef redeem all the preference shares before the 8 years is up and Zambeef start the redemption/conversion process after 3 years.|
|Excellent news today.Also take a look at GWMO its about to multibag, and drilling of its huge copper-gold asset has started. Awaiting rns.Multibagger, GWMO get in ahead of the crowds.|
|epic forecast upgrade!
finnCap note on researchtree
"For FY2017E we increase PBT by 45%, Debt to Equity falls from 60% to 23% while free cash flow increases by c100%. Critically, this will enable Zambeef to proceed with confidence in growing its core growth cold-chain food products and retail businesses."|
|are we going to roll in the close?|
|Also new NAV is about 65p per share with the company debt free and making healthy profits there is a ton of upside !|
|No the pref shares are sold at 55 cents , if the share price is below 18 cents in the 8 year end preiod they get the shares at 3 per pref which is 13.5 p , if the shares are up at 1 quid they convert at 1 share per pref = 41p so they are selling these shares somewhere between 13.5p and 41p depending on where the shares end up, in the interim they get the same divs , and we have no debt and no interest to pay, awesome deal|