Auction Technology Share Discussion Threads

[silkstag] 21/6/2012 10:36

Alexi5, RC eliminate competition and get the assets cheaper this way. Part of the plan is to roger the unsecured creditors. There is also some necrophilia of the ATG shareholders.

What do you think the RC contolled company 'Hyena Ltd' will pay the Administrator for the Tech division goodwill? Adventis bought that goodwill for about £6.8m. Winks/Pearson said on 10-5-2012 they would almost certainly get much more than £1.5m for it. They admitted on 13-6-2012 they would get less than £1.5m (though they tried to hide it under ambiguous drafting).

Plowman Craven had turnover about £7m pa so was very similar size to Adventis Tech division (£8m turnover). Plowman Craven Administration shows the RC-backed company paid only £20,000 for the goowdill; £1,000 for other intellectual property; £1,000 for contracts and £5,000 for the Plowman Craven name. Total £28,000.

Forget covering Adventis ballpark £5.5m net liabilities. Forget the £1.5m Winks/Pearson said would easily be exceeded, then they admitted it would not. RC startpoint is ballpark £28,000. RC will want to use their £1.5m secured debt to devour the Adventis debtors.

ATG shareholders have been dead for some time, but the debt sale from LTSB to RC will lead to the unsecured creditors being starved even worse. I have said it before but agree with other posters, this looks like Wrongful of Fraudulent Trading. It is improper and unlwaful to take services from trade suppliers when you know perfectly well you will not pay them, you are increasing the debtors by trading and the secured creditor will grab those extra assets.

RC do not owe the unsecured creditors any duty of care so their stance can be 'we are hyenas and will grab whatever meat people let us'. Winks/Pearson are the people with the duty to protect the unsecured creditors' food. But they are too busy charging management fees, deceiving the stock market and lording over the group. Winks/Pearson do not care about defenceless trade creditors who won't do anything when they are starved, except complain to the Administrator (who RC will hire) - who will be polite but ignore them.

Winks/Pearson are disgusting. It is more disgutsing that this is playing out while ATG shares are quoted. The shares are worth 0p. RC are fighting to minimise what p in the £ the unsecured creditors get. That is the only battle.

[bozzy_s] 21/6/2012 10:28

I'm guessing Saud's out (trade 165431 bought @ 0.514p just before he popped up here, then sold @ 0.3p this morning).

Real bright investor that one!

[alexi5] 21/6/2012 09:31

Sell price just dropped to .30! I am interested to watch what happens here as I am trying to learn. By the way, Silk, why did RCapital not make an offer for the tech businesses outright? (ie. instead of going through the process of buying the debt and putting Adventis into administration in order to end up with the tech businesses)

[silkstag] 20/6/2012 16:53

BP, told you so! RCapital did a pre-pack Administration on Plowman Craven & Associates Ltd. RC bought HBOS senior debt, appointed Administrator on 9 April 2009 and same day trade and assets were sold to company under RC control for less than book value. Unsecured creditors were left behind. 30 months later, unsecured creditors received about 40p in £ (would have been less but statutory share as there was a floating charge, which did not get paid in full). Shareholders of course got 0p.

RC controlled company changed its name to Plowman Craven Ltd. Original 'Plowman Craven & Associates Ltd' changed its name into Administration to PCH Realisations Number 2 Limited on 9 April 2009.
Hyena maulling of old shareholders and unsecured creditors completed on 9 April 2009!

[silkstag] 20/6/2012 16:31

Unsecured creditors in Plowman Craven were hammered as expected. After 30 months waiting they eventually received about 40p in £ (which was the statutory minimum given there was a flating charge). They would have received less otherwise as that floating charge-holder also suffered a loss. Of course the shareholders, who rank below unsecured creditors, got 0p in £. But we all knew that.

The same hyena team have moved in on Adventis. Wonder how this will end for shareholders? 0p? Yes, I think so!

[silkstag] 20/6/2012 15:40

Alexi5 and saud, the original company was called Plowman Craven & Associates Ltd. Rcapital bought the senior debt from HBOS, used a shell company to buy (syphon off) the trade and assets on 9 April 2009, leaving the creditors behind. They renamed the shell 'Plowman Craven Ltd'. Meanwhile, the original company, Plowman Craven & Associates Ltd, was forced to change its name to PCH Realisations Number 2 Ltd on 9 April 2009 having been promptly placed into insolvent Administration on 9 April 2009. Hello, pre-packed Administration!!!. [It moved into insolvent liquidation on 13 April 2010].

RC bought the trade and assets at below book value. They gleefully recorded 'negative goodwill' in the shell balance sheet.

So the hyenas at RCapital are going to syphon of the tech trades and assets, just like they did with Plowman Craven & Associates Ltd. The shareholders got £0 and the unsecured creditors got hammered - i'll check what p in £ they got and revert.

Amusing that Adventis shareholders and rampers are trumpeting a hyena knawing at the last meat on the Adventis carcass. Bad time for unsecured creditors. Shareholders have been dead for a long time.

[silkstag] 20/6/2012 14:34

Alexi5, if Adventis gets the £1.5m from the sale then they must appoint an Administrator or Liquidator who will promtly give the £1.5m back to RC as they are the secured creditor so have first claim on that cash. All roads lead to Rome. Adventis shareholders 0p. Adventis unsecured creditors are in worse trouble than before.

[silkstag] 20/6/2012 14:30

Alexi5 and saud, you cite the Plowman Craven 'Initially RCapital purchased the senior debt from HBOS...enabled a successful restructure'. I have checked what happened. On 9 April 2009 a dormant shell company with net assets of £1, part-owned by RC, 'purchased the trade and assets...and started to trade from that date". On 23 April 2009 that shell changed its name to Plowman Crvaen Limited. Note the creditors were not bought!

That is exactly what RC did here and will do again. Use the senior debt to hive off the tech businesses into a shell company it part-owns. Other funders and tech management will also get shares in newco. Then newco will change its name to something similar to Second2 or bChannels or whatever.

The word 'restructure' doesn't mean the shareholders or unsecured creditors get anything. It is a polite word for the secured creditor getting a solution.

It is like the line in the film 'Disclosure' where the oily corporate lawyer offers the Michael Douglas character a 'sideways move' to Atlanta. The Donald Sutherland character says 'that is like offering a duck a sideways move to a l'orange'.

[vijay130] 20/6/2012 14:19

What do you think about TEX? It has made a maiden profit. Any idea?

[alexi5] 20/6/2012 14:17

If this forced sale happens pre-administration, then RC would not be buying it from themselves they would be buying it from the current company called Adventis Group!

[silkstag] 20/6/2012 13:45

Alexi5, LTSB sold its £1.5m debt to RC for say £1m. Adventis now owes £1.5m to RC. RC forces Adventis shareholders or the Administrator to sell the tech businesses to Hyena Ltd (owned by RC) for £1.5m. RC loan the £1.5m to Hyena, Hyena pays it to the Administrator, who then pays it to RC as the secured creditor in Adventis. The £1.5m goes in a loop from RC back to RC. RC's only cost to strip out the tech businesses is the original £1m it paid to LTSB. We are still on page 1 of the Hyena Bible.

[alexi5] 20/6/2012 13:38

'no value in Adventis shares' MEANT what it said, but since then the debt has been bought by a company specialising in turning businesses around.

According to your theory, RCapital took on the debt (at an unknown price) with the intention of possibly forcing it into administration so their company can then buy it (if shareholders do not agree the sale). This means that RCapital will have to spend even more funds on Adventis ie. to buy the loan and to buy the tech businesses before they have even started to turn it around. This does not make sense to me. Maybe you are right and I am naive.

[silkstag] 20/6/2012 13:28

Alexi5, the shareholders get 0p on every scenario, as will be set out in the circular to them. Them approving the sale to Hyena Ltd will save some Administrator fees which slightly helps the unsecured creditors. If they dont approve it then the deal will go through 48 hours later anwyway. This is why Winks/Pearson admitted on 13-6-12:
"...Technology division...net proceeds will almost certainly not be sufficient to repay in full the Company's bank debt and other liabilities...Directors consider that it is probable that there is no value in the Company's ordinary share capital...taking account of the ability of the Company to pay all creditors which will include consideration of an insolvency process".

no value in Adventis shares' means what it says, as does 'insolvency process'.

[saud2237] 20/6/2012 12:46

Hedgefundadvisor LOL

[saud2237] 20/6/2012 12:46

hahahah alexi. You hit the nail on the head. They lose everything anyways.

Also implying that the sale is agree is wrong. They have bought the debt so far. They will now attempt to buy the company. If they dont then the technology company gets sold and they get some money back i.e. RCs loss. So they will need to make sure that they buy at a price where the existing shareholders are happy.

[alexi5] 20/6/2012 12:42

Why on earth would shareholders be motivated to agree to a sale to the RCapital company? They lose everything if that happens according to you.

[saud2237] 20/6/2012 12:31

What is your obsession with Hyena?

[silkstag] 20/6/2012 12:12

Alexi5, some accuracy is needed.

The tech businesses are each contained in subsidiary companies of Adventis Group plc ("Adventis"). Adventis has been trying to sell those businesses. The best offer to date was not enough to pay LTSB their secured £1.5m.

LTSB have bailed and sold that debt to RC. RC thus have proof that the tech businesses are worth less than £1.5m so either the Adventis shareholders approve their sale to a new RC company ('Hyena ltd') or RC will select and appoint an Administrator to run Adventis and they implement the sale immediately.

The Adinistrator primary duty is to the creditors in order of their security ranking. RC are at the top. RC can say to the Admninistrator 'you must accept the £1.5m offer from Hyena Ltd as it is better than any other offer and if you dont you will lose us £1.5m which will be your fault'. The Administrator will say 'good point, the Adventis directors tried and failed to get even £1.5m, so we must and will accept that £1.5m offer immediately, as it is best for the secured creditor'. Game over.

This outcome is on page 1 of the Hyena Bible. It is called a pre-packed Administration. [The Adventis shareholders may approve the deal in which case it will happen before Administration].

[saud2237] 20/6/2012 11:43

alexi this is precisely what I have banging my head about but I give up.

======================

Plowman Craven

Plowman Craven is one of the world's most innovative geomatics companies specialising in accurate measurement of buildings and transport infrastructure. More recently, the company applied its measurement skills in Hollywood, on films such as Batman - The Dark Night and for a gaming company that wanted to measure the grand prix circuit for a computer game.

Founded in 1964, Plowman Craven is a fascinating business able to deliver a consistently high standard of quality and service to clients, regardless of the size and complexity of each project. As a consultancy firm, this can only be achieved through the continuous adoption of new technology and astute investment in both staff and equipment – a strategy RCapital has followed since this acquisition was completed in 2009.

RCapital's investment in Plowman Craven was based on its strong client base in the public sector, which has proven to be a sustainable business model with, to a large extent, indispensable services that have been sheltered from the economic downturn.

"This was a sound but poorly managed company, suffering the effects of a very highly leveraged buyout and lack of focus within the senior management team"

Jamie Constable, Co-Founder, RCapital

Initially RCapital purchased the senior debt from HBOS who had become uncomfortable with the exposure. This allowed Plowman Craven two months breathing space and enabled a successful restructure, which reduced costs significantly.

==============================

THIS IS STILL A HIGH RISK. EXTREMELY HIGH RISK

[alexi5] 20/6/2012 11:40

Silk, when I read the RNS I took it as good news, as I assumed that RCapital would not be calling in the debt, but would turn the business around. Their policy is to invest in businesses with strong potential but failing due to bad strategic decisions.

You believe that they will put the business into administration and then buy the business themselves, without all the debt (makes financial sense). But, talking of FSA rules, is that actually allowed? I thought the Administrator would have to be objective and so, what is to stop them selling the business to a company that outbids RCapital?

You are far more knowledgeable about business than me, Silk, and I bow down to your superior intellect. But I still don't trust everything you say, lol!

[saud2237] 20/6/2012 11:27

I am pulling your leg. Relax. Times are hard. You win some you lose some