Aura Renewable Acquisiti... Share Discussion Threads

[hedgehog 100] 02/2/2023 18:33

Recent Share Trades for Aura Renew Acq (ARA)
Date Time Trade Prc Volume Buy/Sell Bid Ask Value
02-Feb-23 12:02:23 6.45 177,728 Unknown* 6.00 6.50 11.46k O
02-Feb-23 12:17:52 6.08 20,000 Sell* 6.00 6.50 1,216 O
02-Feb-23 08:13:56 5.65 30,000 Sell* 5.50 6.50 1,695 O


Welcome S.C. - and thanks for letting us know.

And you are not only in, but in in quite some size: about 1.69% of the company (10.5M. shares in issue).

[shortcpx] 02/2/2023 12:20

Cash raised is to appraise targets. Always another fundraise for the target business to execute growth plan. The fun is in the RTO raise price and subsequent performance if well received by the market. See CRTM as another example. Just under trebled after returning.

[shortcpx] 02/2/2023 12:08

SOP/KNB was a banger (in youth parlance). 5p IPO, 40p plus on return. And they gave shareholders on the register at suspension 10p warrants as well. IIRC.

[shortcpx] 02/2/2023 12:05

177k shares just bought. Valued below cash.

[shortcpx] 02/2/2023 12:03

ARA. I am in you.

[hedgehog 100] 16/1/2023 17:11

Recent Share Trades for Aura Renew Acq (ARA)
Date Time Trade Prc Volume Buy/Sell Bid Ask Value
16-Jan-23 12:30:56 5.97 15,000 Buy* 5.50 6.00 895.50 O
16-Jan-23 08:01:11 5.94 25,000 Buy* 5.50 6.00 1,485 O
16-Jan-23 08:00:06 5.80 40,000 Buy* 5.50 6.00 2,320 O

ARA has closed up 9.1% today, rising 0.5p to 6p.


Today's operation update from ARA is doubly reassuring:-

• The company has been active in pursuing potential acquisition targets, with international battery storage technology companies being particularly mentioned, with sounds exciting.

• The company is clearly husbanding its cash superbly for an intended acquisition.

This should reassure Chinahere's concern, expressed in post 34 above, that "there won't be much left soon".

The prospectus allocates £478K. cash for making an acquisition, and £350K. for general and administration costs.
But I would think that the £350K. will be used largely for due diligence and legal costs etc. for an acquisition, leaving the balance of £478K. to go towards the actual purchase price (combined with the issue of shares to the target company) and/or go to the cash resources of the expanded entity post RTO.


Even with today's rise, ARA's market cap. is still just £630K. at 6p, which is way below its cash, for an asset class (shells) that nearly always trade at a premium to cash.
And even though ARA looks a cut above the average shell.

[hedgehog 100] 16/1/2023 14:29

A good positive update today from ARA, which has currently lifted the share price back up to 6p (5.5p - 6.5p), on volume of 80,000 shares traded, all of which are buys.

And well done to the company on such refreshingly good cash conservation.

From ARA's 5th. April 2022 prospectus:-
"The Company recorded an audited total comprehensive loss of £23,734 for the financial period ended on 30 November 2021 and as at 30 November 2021 had net assets of £26,266."
"Estimated Net Proceeds of the Placing and Subscription £828,000"
"On Admission, the Company will have an additional cash amount of £50,000 available for use in making an Acquisition, being the proceeds from the issues of shares in November 2021."

From today's ARA RNS:-
"As of 31 December 2022, the Company had an unaudited cash balance of GBP809,000, reflective of the minimal overhead base following the listing."

= Cash burn of c. £45K., 1.12.21 - 31.12.22, excluding the one-off IPO costs taken off the gross IPO placing proceeds.

From ARA's prospectus dated 5 April 2022, re all four directors:-

" ... not entitled to a fee until the first Acquisition has been completed, at which time his subsequent entitlement to a fee will be considered by the Nomination and Remuneration Committee. ..."

HTTP://aurarenewables.com/investors/


16/01/2023 07:00 UK Regulatory (RNS & others) Aura Renewable Acquisitions PLC Post Year End Operational Update LSE:ARA Aura Renewable Acquisitions Plc

"Aura Renewable Acquisitions plc, a UK-based company whose objective is to invest in the global renewable energy sector supply chain and thereby build shareholder value, is pleased to provide an update on progress for the period from the date of incorporation on 4 November 2021 through to 31 December 2022.

Aura was formed as a special-purpose acquisition company focusing on the Global Renewable Energy Sector Supply Chain, particularly on businesses in the wind, solar, biomass, hydropower, carbon capture, waste management, energy storage, smart grid and green hydrogen supply chain.

The Company raised gross proceeds of GBP1 million on admission to the Standard Segment of the Official List of the Financial Conduct Authority and to trading on the Main Market for listed securities of the London Stock Exchange in April 2022. As of 31 December 2022, the Company had an unaudited cash balance of GBP809,000, reflective of the minimal overhead base following the listing.

The Company has actively and selectively reviewed potential international acquisition targets since listing and at the same time the Board has taken soundings from the investor community to seek to best fit investment appetite with the opportunities available.

Amongst others, and by way of example, companies in the energy storage sector, developing next-generation battery technologies, have drawn the Company's attention. Batteries play an essential role in the energy sector supply chain, facilitating the transition to a net zero economy and a more sustainable environment.

Many countries, including the United States and the United Kingdom, have realised the importance of secure domestic supply chains and have introduced legislation, government grants and other incentives to support their battery industries - an example being the Inflation Reduction Act under the President Biden Administration.

Our investment horizon is relatively wide within our chosen sector, and we will continue to assess and qualify what we believe to be value accretive opportunities in the UK and overseas. When our ongoing evaluation and investigation result in the potential for a transaction, the Company will give the market appropriate notice.

The Company expects to announce its results for the period ended 31 December 2022 in early April 2023.

John Croft, the Chairman of Aura commented:

"As we move further into our first full year of operation, Aura continues to explore a range of target acquisitions and investments which the Board considers could offer the potential for significant growth in this exciting, fast-moving and crucially important market sector.

"We expect supply chain, inflation and interest rate issues to be less of a dampening factor on corporate activity in 2023, and believe that capital market activity and fundraisings will slowly recover as the year progresses. Hostilities in Europe and further afield, the lingering impact of Covid, especially in China, are still causes for concern, as is the irrefutable and increasingly evident daily impact of climate change.

"As I have mentioned before, we are more confident than ever that the renewable energy sector will offer excellent opportunities for acquisitive and organic growth for the foreseeable future. We are striving to give the Company and its stakeholders the chance to share in these opportunities, not least to help in some small way to protect our planet for future generations."

Publication on website

A copy of this announcement is also available on the Company's website at hxxp://www.aurarenewables.com."

https://uk.advfn.com/stock-market/london/aura-renewable-acquisiti-ARA/share-news/Aura-Renewable-Acquisitions-PLC-Post-Year-End-Oper/89981908

[hedgehog 100] 09/1/2023 15:43

Medcaw Investments (MCI), another small shell, floated just before Christmas, and highlights ARA's value.

MCI raised £0.45M. net in its float, at 10p/share, and its current market cap. is over three times the level of ARA's: market cap. £1.8M. at 10.5p/share.

On Admission, the Company had a cash balance of £702,393, according to its prospectus on its website.


21/12/2022 08:00 UK Regulatory (RNS & others) Medcaw Investments Plc First Day of Dealings on the London Stock Exchange LSE:MCI Medcaw Investments Plc

"Medcaw Investments plc, a company formed for the purpose of undertaking an
acquisition or acquisitions in the life sciences sector life sciences sector,
focusing on companies developing medical or wellness technologies and
therapies, is pleased to announce that, following the publication of its
Prospectus on 16 December 2022, a total of 17,132,095 ordinary shares of £0.01
each in the share capital of the Company will today be admitted to the standard
segment of the Official List of the Financial Conduct Authority and to trading
on the main market for listed securities of the London Stock Exchange plc.

Dealings will commence at 8:00 a.m. today under the TIDM 'MCI' with ISIN number
GB00BM8SQP62 and SEDOL BM8SQP6."

https://uk.advfn.com/stock-market/london/medcaw-investments-MCI/share-news/Medcaw-Investments-Plc-First-Day-of-Dealings-on-th/89826451


10.50 -% (-)
MCI ORD GBP0.01
https://www.londonstockexchange.com/stock/MCI/medcaw-investments-plc/company-page

[hedgehog 100] 07/1/2023 17:15

An RTO is simply an alternative way to float on the stock market, and some of the world's largest companies have come to market via this route.

Including WPP, current market cap. over £9 billion:-

" ... WPP plc is a British multinational communications, advertising, public relations, technology, and commerce holding company headquartered in London, England. It was the world's largest advertising company, as of 2019.[4] WPP plc owns many companies, which includes advertising, public relations, media, and market research networks such as AKQA, BCW, CMI Media Group, Essence Global, Finsbury, Grey, Hill+Knowlton Strategies, Mindshare, Ogilvy, Wavemaker, Wunderman Thompson, and VMLY&R. It is one of the "Big Four" agency companies, alongside Publicis, Interpublic Group of Companies, and Omnicom.[5] WPP has a primary listing on the London Stock Exchange, and is a constituent of the FTSE 100 Index.[6]

The company was founded as Wire and Plastic Products plc to manufacture wire shopping baskets in 1971. In 1985 Martin Sorrell and Preston Rabl,[9] searching for a listed company through which to build a worldwide marketing services company, bought a controlling stake. ..."

https://en.wikipedia.org/wiki/WPP_plc

[hedgehog 100] 05/1/2023 18:45

Chinahere,

It's fairly common for shells to target a particular sector etc., although this can be flexible when appropriate/necessary.
The focus can relate to the particular expertise-contacts-interests of the directors-investors, &/or what they think may be attractive from an investment viewpoint.
Focussing can also reduce the search to a more manageable level.

For any business wishing to potentially reverse into ARA, the logical first port of call would be to contact the shell company directly, and to then take it from there: i.e. initial assessment, potentially progressing to due diligence etc.

Obviously any overpriced new issue, be it RTO or IPO, is likely to underperform compared to a good value new issue, other things being equal.
But a key determinant of performance is how the company performs on a business level. Some of the best performing shares of all time have looked far from cheap at their floatation prices; whereas some shares that have looked cheap at float have failed to deliver.

[chinahere] 05/1/2023 16:56

It's very strange stuff but interesting too thanks.

Why did the management here tie themselves to the area of renewable energy? I realise it is probably the hottest sector, but why not be open to anything?

Say I was an owner of a renewable energy private company. What would be the stages gone through if I wanted to main-list into Aura via an RTO?

A 'deemed' price without a placing would surely be questionable at best? I guess the market would quickly revalue it on listing anyway?

If a share placing was involved then the valuation would have to be at least partially justified via a prospectus wouldn't it.

I guess this is the sort of thing that really can gain value from a recent fad isn't it (probably answering my question above). Like a few years ago - add 'blockchain' to your company name and treble the price!

[hedgehog 100] 05/1/2023 16:14

Chinahere,

The premium paid to a shell's cash for a RTO can vary enormously, and the waters can also be muddied if there is no RTO placing, because any RTO price is then in effect a 'deemed' price: a shell can RTO a target for a given share of the equity, and then 'deem' a value for the shell and the target.

Generally though, the RTO will also take account of cash spent by the shell, at least relatively recently, in pursuit of a RTO, and give a value of at least £250K. or so for the listing - though it can be multiples of that in some cases.

Remember that if the company floating is valued at hundreds of millions, then a shell value of a few £millions may be just 1% of the expanded equity, which is comparatively insignificant.

ARA's value is a combination of:-
• Its cash.
• Its listing.
• Its work and spending to date in pursuing a RTO.
• The additional value that its 'shellmeisters' can bring to the floating company.

Note that due to recent changes in listing rules, 'new' main-listed shells can only float with a £30M.+ market cap. (previous minimum only £0.7M.) ... unless they completed their FCA submission by 2.12.21, in which case they can float at the old minimum up until 2.6.23.

So the supply of very small main-listed shells like ARA will gradually dry up, increasing their scarcity value.

[chinahere] 05/1/2023 14:18

Thanks. A concise reply. You are right that I am pretty much ignorant about these.

So the listed vehicle can have value as an entity in itself. Interesting if the RTO has benefits to IPO too. Can you put a £ price on the value of a listed company regardless of assets?

So where do you think the main value is here then?

The 'shellmeisters' business acumen? Or the listed vehicle?

[hedgehog 100] 04/1/2023 22:02

Chinahere,

You may not have come here to be vindictive, but you are clearly being ignorant.

With virtually all cash shells, the cash is deplenishing from the day they list, because they have no business to generate funds.
So to criticise a cash shell for that is a bit like criticising an opera because there are people singing in it.


Note that even in current challenged markets, some shells are still successfully completing RTOs.
Here are a couple of recent examples:-

22/09/2022 06:01 UK Regulatory (RNS & others) Sivota PLC Readmission and Publication of Prospectus LSE:SIV Sivota Plc
https://uk.advfn.com/stock-market/london/sivota-SIV/share-news/Sivota-PLC-Readmission-and-Publication-of-Prospect/89117451

31/10/2022 07:00 UK Regulatory (RNS & others) Vox Valor Capital Limited Admission to Main Market and First Day of Dealings LSE:VOX Vox Valor Capital Limited
https://uk.advfn.com/stock-market/london/vox-valor-capital-VOX/share-news/Vox-Valor-Capital-Limited-Admission-to-Main-Market/89413871


And if you are disciplined in only buying shells with good cash underpinning, &/or near term deal likelihood, then good results at a RTO are very possible.

Here are three current examples:-

1. CRES.
Suspended at 3p: intended RTO 4.625p:-
https://uk.advfn.com/stock-market/london/citius-resources-CRES/share-news/Citius-Resources-PLC-Statement-re-Suspension/88323962

2. TMOR.
Suspended at 0.95p: intended RTO 2.25p:-
https://uk.advfn.com/stock-market/london/more-acquisitions-TMOR/share-news/More-Acquisitions-PLC-Acquisition-Megasteel-and/89129228

3. ROC.
Suspended at 4.7p: intended RTO 7.86p:-
https://uk.advfn.com/stock-market/london/rockpool-acquisitions-ROC/share-news/Rockpool-Acquisitions-PLC-Potential-Reverse-Takeov/89561567

Those three, if they complete, would represent an average uplift of 90% during suspension (based on suspension price to RTO price).


Note that the RTO route may have attractions to the IPO route that may give it additional 'value' to a company wishing to float:-

• A requirement to give away less equity than in an IPO.

• Potentially more speed and certainty - an aborted IPO due to market conditions could be very expensive, and time is money.

• The 'shellmeisters' may also have attractive business acumen, contacts, and 'clout', that may be attractive to the floating company.

[chinahere] 04/1/2023 20:09

Yes, I don't know much about cash shells, but I can see that the cash is running out.

It's hard enough understanding companies that exist. Why do you believe that they can purchase something here that will be worth more per share than 5.5p?

By the way I didn't come here to be vindictive. It just looked interesting.

[hedgehog 100] 04/1/2023 19:42

Chinahere,

I wasn't aware that any shares, especially penny shares - shells or otherwise, had any "guarantees".

If you want "guarantees", then perhaps you should put your money in a building society, rather than wasting your time reading share prospectuses.

I also get the impression that you're new to shells, and know next to nothing about them. If ARA signs an intended RTO deal - which could be at any time - the shares will be suspended until the RTO deal is either finalised or aborted. So the shares wouldn't be "drifting along" as they wouldn't even be traded.

[chinahere] 04/1/2023 16:07

Thanks.

I think it prudent to assume the cash is spent then, or at least it will be later this year.

Then we are really hoping that they can make a purchase and also that is liked by the market. There are no guarantees there, especially in the current market where it is very difficult to raise cash. I sadly can see this drifting along until the money is gone - but I may be completely wrong.

[hedgehog 100] 04/1/2023 11:38

Thanks for your input, Chinahere.

The important thing is that ARA should have enough cash to arrange an RTO this year, subject of course to identifying a suitable target, and agreeing terms, etc.
If it does, then from the current level (5.5p mid) you would expect a decent share price uplift.
If it fails this year, thereby prolonging its life as a shell, then in 2024+ it may seek to top up its coffers, but I wouldn't regard that as an immediate concern.

From the Aura Renewable Acquisitions plc prospectus, dated 5 April 2022, page 37:-

"The Directors believe that the Company’s cash at bank at Admission will enable the Company to undertake preliminary due diligence on a number of potential targets and to execute its first Acquisition. It is likely that some due diligence fees will be payable on completion of the relevant Acquisition, and the Board would expect the target in each case to carry part of this risk, but there may be certain due diligence fees which have to be incurred upfront, and whilst the Company will seek to agree abort arrangements with providers of legal, financial and technical due diligence services, these may be significant. The Board considers that the Net Proceeds should be sufficient to undertake preliminary due diligence on a number of potential transactions and to carry out substantive due diligence on at least two preferred targets. If significant costs have been incurred without an Acquisition being completed in the longer term, the Board may need to seek additional finance to carry out further due diligence or complete a transaction, but this is considered unlikely. Follow on acquisitions would be financed either from cash flow generated at the time, the issue of new Ordinary Shares or debt financing, or a combination of two or more of those.

The Directors may, at the time an Acquisition is completed, seek to raise further funds by way of equity and/or debt in order to support the then enlarged group’s increased working capital requirements."

HTTP://aurarenewables.com/Investor-Documents/Prospectus.pdf

HTTP://aurarenewables.com/investors

[chinahere] 03/1/2023 17:07

This looks interesting but Page 45 on the Admission Document makes me worry that there won't be much left soon:

"The Net Proceeds of the Subscription and Placing of £828,000 are expected to be utilised as follows:

General and administrative costs: approximately £350,000

Cash held for use in making an Acquisition: approximately £478,000"

[hedgehog 100] 11/12/2022 13:09

AR,

ARA is a cash shell, so as is to be expected doesn't currently have any non-cash assets.

That's been a positive this year, considering the way that the value of many renewable energy businesses has been rerated downwards, whereas 'cash is king'.

And of course this means that ARA will get more for its money when it invests.

If you read this thread in full, then that should give you a good idea of ARA's strategy, and the opportunity here.

As far as I'm aware, ARA is the cheapest and best value shell relative to its cash that's currently trading on the London Stock Exchange.

[acceptablereply] 11/12/2022 12:30

Is there any documentation that we can refer to for insight on ARA's current acquisitions/investments? I'm keen to know more about the current technologies supported by the company, e.g. Unique recycling technology from Ocean Polymers etc

[hedgehog 100] 11/12/2022 12:03

From TradingView.com:-

"AURA RENEWABLE ACQUISITIONS PLC ORD GBP0.01"

"ARA technical analysis"

"Oscillators Summary Moving Averages"

"Buy Buy Buy"

https://www.tradingview.com/symbols/LSE-ARA/technicals/