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The deluded fools still aboard the good ship Sefton (LSE:SER) were thrown a bone today with news that the pension plan of chairman Jim Ellerton has ponied up £76,145 in a placing at a share price of 1.1044p – this they argue is a huge vote of confidence in the AIM listed oil stock. Er…perhaps not. Is this real cash? The company will not say.
Of course C&J Resources (Jim Bob’s pension plan) has put in hard cash. Brokers Dowgate takes a quick turn and £75,383 goes to Sefton. Hard cash went in. But…. Seftonologists will know that Sefton owed Jim Bob’s pension plan $137,000 at the end of last year. That would work out at around £84,000. Given Sefton’s cash constraints I doubt that money has been paid. And you will know that as well as a basic package and bonus (er for what) of $418,000 in 2011 Jim Bob was entitled to a pension payment of another $66,000 – my guess is that he would have been entitled to the same again this year.
My detailed analysis of how close Sefton is to the edge is revealed in detail HERE
So my question for Sefton’s latest advisers today was “I know C&J put hard cash in but can you confirm how much of the $137,000 (plus this year’s contribution) has been paid back?” The answer I got was “you will have to wait for the 2012 annual report.” As ever ten out of ten for transparency.
My 5 Albanian Lekke wager is on the actual cash position of Sefton not actually improving as a result of this placing; Jim Bob has just removed a bit of a liability from the balance sheet. If Jim Bob really wanted to help the company what he should have done was put up hard cash not to dilute shareholders but to repay the $283,000 “cash advance” he took out in 2010 and – as at 9th October 2012 – had not repaid.
But this “placing” is not about restoring Sefton’s balance sheet. It is about spoofing gullible private investors into buying stock so that there is a) a higher share price and b) increased trading volumes so that Sefton can draw down another tranche of Darwin Death Spiral money. As things stand when the 2012 annual report is finally published, unless Sefton has raised a stack more cash from the Death Spiral (and I mean a couple of million quid) the report must be qualified in some way.
Sefton should fess up on this placing “what is the net balance on the amounts owed to C&J Pension fund by Sefton as of today?” Easy question. Over to Jim Bob and IR gopher Doctor Doolittle for an answer.
To watch the Sefton downfall video featuring Jim Bob Ellerton and the Darwin Death Spiral click here
Sefton is still running out of cash even after the first Darwin Death Spiral Drawdown. The shares, now 1.1p are a sell. Target price 0.01p.
Libertarian investment writer Tom Winnifrith writes extensively for a number of US and UK financial websites. All of that material appears on his own blog, which also carries his extensive original non financial material, at TomWinnifrith.com – for alerts on all Tom’s writings follow him on twitter at @tomwinnifrith
