Aston Martin Lagonda Glo... Share Discussion Threads

[loglorry1] 18/7/2022 09:13

Ultimately the post RI price (which is really all that matters) will be set by what investors value the market cap to be divided by all the new shares and of course more short term the buy/sell flow.

Results are out soon and unlikely to be good. Once we are past this mini squeeze I think holders will realise its best to sell some up here and use their rights to top back up a lot lower.

Those who have committed to taking up rights like PIF are agnostic to the RI price. They are just putting in more cash to avoid dilution. The RI price only affects those not taking up rights. To see this consider a RI price of 1p. Holders have a choice of taking up rights or being diluted to oblivion but their rights will trade at a significant premium to 1p.

[wilmdav] 17/7/2022 13:39

According to the RNS, PIF are committed to investing £173.3m (335 - 105.3 - 56). £78m of that will come from the placing, the balance of £95.7m will come from the rights issue. Contrary to what I previously suggested they will be able to do that at whatever price the RI is set at, providing the issue ratio is set appropriately, e.g. 1.2:1, 1:1, 0.8:1 etc).

However the RI has to be got away, and the actual price will ultimately depend on whatever investors are willing to pay.

I have also given the impression that the share price will drop precipitously on the day of the RI due to the dilution. As loglorry rightly says, the market price will gradually adjust in anticipation of the post RI situation.

My current expectation is that the RI price will be below £3.35 but this is going to be an educational exercise for me at least.

[swiss tony] 17/7/2022 11:24

PIF are taking shares at £3.35 to be able to buy MORE in the rights issue, which will have to be below that.
The problem is with assuming AML are going to pay off expensive debt. The CFO refused to say what he was doing with the cash from the RI, when specifially asked.

CFO: "Moving to the balance sheet, given FX movements during the period, we anticipate a further FX re-evaluation impact, mostly non-cash on our dollar denominated debt
Finally, in addition to our planned Capex in H1 and cash interest payment in Q2, our H1 free cashflow and cash balance, was highly impacted by elevated working capital outflows related to supply chain logistics disruptions
As well as movements in the level of usage of the revolving credit facility at the end of the period."

HIGHLY IMPACTED!

I'd assume the cash level of 400m at Q1 2022 had reduced dramatically, hence the cash raise required.
Stroll is incapable of being honest with the world, I reckon very little of the bond debt will be paid off, this money is purely for immediate survival.
The Nebula court case is end of this year, and they are set to lose £210m from that alone.
They need to design THREE new cars in 2023, costing £200m each, then EV after that.
Interest payments will still be £90m per year (CFO stated so).

No way is this enough cash, it just kicks tha can down the street for another 18-24 months.

I bet the balance sheet is a disaster at Q2 results, 29th July, not long to wait.

[loglorry1] 17/7/2022 09:49

The problem with assuming half the pre-RI price is twofold. The price slipped a lot as it was obvious a raise was coming so it was down a lot already in anticipation. So perhaps a price of around 500 is a better assumption as pre-rights issue price. Furhtermore, the injection of cash will make the balance sheet a lot more solid and also repay some expensive debt which will help the company's p&l.

The share count will probably at least double though.

So I'm guessing that we might settle around 350p once all the new stock has been issued.

I'm also pretty sure that PIF will not allow other investors to buy lower than the price they put money in at during the placing 335p. It makes no sense to bail out the company and then let others dilution their investment.

What we saw on Friday was just a squeeze. I'm confident the price will drift lower to around the RI price in the coming weeks.

[wilmdav] 17/7/2022 08:30

Yes, what I said was not completely groundless. The main mistake was to give the impression that an approximate figure could be calculated from the data available.

However it is not unreasonable to expect the eventual RI price will be less than the placing price of £3.35 for the reasons I gave and those of other posters above.

As you suggest, the market price between now and the RI should give us an indication of what the final price will be, i.e. approximately half the pre-RI share price.

[swiss tony] 16/7/2022 18:58

I thought your guesstimate was pretty well thought out and reasoned Wilmdav!
And £2.50 is considerably less than £3.35

[wilmdav] 16/7/2022 18:21

Tony, my reasoning is faulty, please ignore.

Your own guesstimate of the RI price of £2.50 if the pre-RI price is £5 makes sense for the reasons you give.

[swiss tony] 16/7/2022 15:12

What did your calculations come out at?

Depending on the market cap at the time, say the share price is £5, then the issue price will be £2.50 ish.
Not many seem to have realised that raising the same amount of money as the company is worth means doubling the shares in circulation.

[wilmdav] 16/7/2022 12:51

There was one notable difference between the FT article on Thursday 14th July and the RNS published next day, a directors meeting having taken place in between.

The FT article reported the likelihood that the Saudi PIF would be investing up to £200m for a shareholding of slightly less than 20% and a seat on AML's board.

The RNS stated that the PIF would be investing £23.3m in a proposed placing which would raise £78m at a share price of £3.35.

There would also be a "subsequent" rights issue, raising another £575m.

Presumably the purpose of the £23.3m placing is to give PIF the right to increase their investment in the rights issue. If I am not mistaken a right to increase their total investment up to £200m would imply a rights issue price of substantially less than 335p.

Edited at 13:00 on 16/07/22

[shooter mcgavin] 16/7/2022 12:04

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[gary_barlow] 15/7/2022 18:19

Thanks Joseph.

[drew lonmenob] 15/7/2022 17:37

Huge stench of riles's shorts here today. Marvellous smell

[gary_barlow] 15/7/2022 17:36

There used to be a magnificent church near where I live - and then it got demolished. Great visions don’t last forever. This company is crumbling and nobody is serious about replacing the lead.

[gary_barlow] 15/7/2022 17:23

If that Telegram really does have 2k participants circling AML then there is plenty of mug-money to hand the baby to.

[gary_barlow] 15/7/2022 17:20

My thoughts Tony, are that it’s pretty much 1:1 retail to algorithm. In the entrance, and out the fire exit.

[topazfrenzy] 15/7/2022 16:46

The Arabs are buying up all the cheap UK stocks with their petrodollars against a super weak GBP

They've started nibbling on Foxtons too, only a matter of time before they bid for it at x4 the current SP

GLA

[mallorca 9] 15/7/2022 15:52

In for a short.

[shooter mcgavin] 15/7/2022 14:53

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[swiss tony] 15/7/2022 14:27

In total, Yew Tree, Mercedes and PIF will invest £335mn through the rights issue or the fresh shares, Aston said. This leaves other investors to pay up to £318mn through the rights issue, which has been fully underwritten.

So what are both your thoughts now that we know it's 50/50 between retail and IIs?

[jonnywalker77] 15/7/2022 13:45

IMO would be surprised if north of 200p (only 30% discount to TERP, assuming 445p pre-RI price). If I had to guess (no positions; never touched AML) I'd guess more like 175p

575m raise on a ~600m mcap (post-placing) is huge

[gary_barlow] 15/7/2022 13:36

The RI will keep the retail active here. I really can't see why any institution would bother throwing money in the ring here though - I just cant!

[shooter mcgavin] 15/7/2022 12:52

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[swiss tony] 15/7/2022 12:51

I'd say that's pretty close