Lamprell Share Discussion Threads

[dealy] 02/7/2022 10:20

Being a shareholder means nothing to an administrator. An administrator firstly imposes a moratorium on all "old" debts. They will be handled via dividend from the asset sale process (2 years from now). "new" debts are then paid on a current basis e.g. paying for a service or good to be delivered now or in the near future so that the company van operate and retain value. The administrator then begins a lengthy asset sale process based on the highest bidder. Nothing to do with shareholders.

[pwhite73] 02/7/2022 10:09

dealy - "Blofeld and Sami could so a capital injection on Monday "

Yes and so could administration come as early as Monday. Ironically if it does Blofeld and Sami would be the first people the administrators talk to as they have major stakes in the company and are willing to inject fresh cash.

Speak Later

[pwhite73] 02/7/2022 10:03

I too am certain the accounts were and still are in the final stages however they cannot be signed off as a going concern or a going concern with qualifications if the company is in default of a $26 million loan.

I also totally agree these are terrible times for markets. The recovery from Covid, the war in Ukraine, the rising cost of energy, raw materials and food, the rise in interest rates, the new recession and the total collapse in the value of bitcoin.

Its nigh impossible for companies in dire straits like LAM to raise fresh capital from anywhere. If it does happen it comes at the ultimate price administration.

[dealy] 02/7/2022 09:51

I'm.pretty sure they are in the final stages. They came out at exactly this time last year. Clearly the situation has been made complex by the lack of short term funding. But that is also because the markets are going through the worst period in decades. It doesn't mean it won't get resolved. Blofeld and Sami could so a capital injection on Monday (no open offer , just straight placing to them) and then the working capital lenders would show more flexibility. Blofeld probably feel more comfortable with Sami involved, sharing the risk

[pwhite73] 02/7/2022 09:45

dealy - Again you are right about the markets. The market cap of LAM is completely out of step with its order book. The problem is if you inject $75 million into LAM this is not reflected in the market cap and the company is still owned by those who defaulted in the first place. If the Plc is kicked out of the way (administration) then serious discussions can start regarding a rescue and liquidity package for the operations.

[dealy] 02/7/2022 09:45

The market cap is a variable not a constant. The NPV of the business plan probably values the company at 2 or 300m . Companies raise money all the time so they can grow. Look at Ocado (raised 500m last week) de la Rue , Asos etc all raised money in the last couple of years. That's why we have the term Capital Markets

[pwhite73] 02/7/2022 09:41

dealy - "but that is not being sadled with debt !!"

Yes it is that's why the accounts have been delayed for three months after telling the markets they were in the final stages.

[dealy] 02/7/2022 09:41

Here's my take: if a company of this size delivering highly strategic services in a high demand sector in the richest region on the planet with a substantial order book and net assets has no equity value then you might as well just give up on the markets completely. I'm pretty sure Sami cannot believe his luck that he could buy a 19% stake in this for just 6m quid. And you are saying he was robbed !!

[pwhite73] 02/7/2022 09:40

dealy - "The issue is that much of the cash is restricted and the business has upfront investment associated with contract fulfilment and the JV"

That's 100% correct. Now due to Covid-19 the company has not been able to operate to meet its debt and capital expenditure requirements therefore if the Plc is to survive an external party has to immediately inject $75 million into the company to meet its debt obligation, payroll for June/July and working capital expenditure, are you with me so far. Good.

Now imagine if you were that external party why would you be stumping up $75 million to rescue LAM if the company remains in the hands of those who defaulted on the loan and failed to meet the capital requirements. Moving on from there LAM has a market cap of just £32 million. If you are going to inject $75 million then its only right and proper the whole company is yours.

[dealy] 02/7/2022 09:34

but that is not being sadled with debt !!

[pwhite73] 02/7/2022 09:30

dealy - "What is the debt that you are talking about other than typical working capital"

RNS 24/06/2022 - "Under the terms of the Initial Facility, the Company is required to make an initial repayment of $26.4 million on 27 June 2022 with the final repayment of the Initial Facility being due in Q4 2022. The Company is seeking a one-month extension for payment of the June milestone. There can be no guarantee that such extension will be granted by the Company's lenders."

[dealy] 02/7/2022 09:15

What is the debt that you are talking about other than typical working capital ? Why did the company report net cash of 81m back in November and this was before they raised 30m in equity?Also the company is Ebida break even with 20% growth rate.The issue is that much of the cash is restricted and the business has upfront investment associated with contract fulfilment and the JV

[pwhite73] 02/7/2022 09:15

When McColls went into administration it had a market cap of just £5m. Morrisons paid £190 million to rescue McColls but didn't touch the Plc valued at only £5m.

[pwhite73] 02/7/2022 08:56

dealy - "The route to value here for the shareholders and lenders / jv partners/ suppliers/ customers is to help the company get through the next few months."

You need to take one step back and consider if helping the company through its liquidity crisis is the best outcome for everyone how has LAM got into this mess in the first place.

In RNS 24/06/2022 LAM told you it has tried to negotiate an equity fund raise with its lenders. It has asked for a one month extension on the $26 million loan from its lenders. It has tried to negotiate a takeover offer with Blofeld that includes addressing the liquidity crisis. To date all the negotiations have failed even the auditors have been put on hold for the next three months. That's because nobody is interested in debt stricken LAM Plc its the contracts, rigs and assets the lenders and shareholders are interested in.

Try and separate the shares from the operations. I know its hard and you can't get your head around why major shareholders would damage their own holdings but it happens if there is a bigger pot of gold from administration.

[dealy] 02/7/2022 08:27

Look, call me old fashioned but generally the best outcome for shareholders (including the major ones) is a strong share price. You build a stake and you hope that the shares go up and stay up and pay dividends or the company is sold for a premium.Everything else is highly risky (cherry picking contracts, assets etc) and extremely complicated. The company has net cash and net assets and a number of milestone cash payments in the pipeline. It is not saddled with debt in a way that would make a pre pack or chapter 11 interesting. The business plan is solid with just short term liquidity/ working capital needing fixing. The route to value here for the shareholders and lenders / jv partners/ suppliers/ customers is to help thr company get through the next few months. Anything else will produce a worse outcome.

[pwhite73] 02/7/2022 08:19

That is exactly what's going on and as I said the biggest shareholders who own in excess of 70% (£26m share value) are prepared to lose the lot for this:-

RNS 24/06/2022 - "The project has the potential to double Lamprell's annual renewables revenue capacity from c.$400 - $600 million to c.$800 - $1,200 million while lowering unit production costs and materially improving gross margin contribution by over 2.5x on offshore wind foundations projects."

Indeed the major shareholders may use their shares to block any third party rescue package for LAM Plc.

[kibes] 02/7/2022 07:58

Results before the end of Q3? That is 3 months away. The situation must be absolutely dire with questions about whether they are a going concern. Some danger here of a 'pre-pack' administration in which somebody buys the assets but walks away from the debts? Shareholders get nothing in that situation.

[pwhite73] 02/7/2022 07:51

dealy - "But on the other hand talks with the shareholders are proceeding at an urgent pace to solve this issue"

I'm not sure where you've got urgent pace from when discussions with Blofeld have being ongoing for two months with no offer formal offer only an indicative offer made at a substantial discount. No talks with Sami's consortium have started yet.

Neither Blofeld or Sami are interested in LAM Plc what they're after is the Middle Eastern contracts, rigs and assets. Both are prepared to see LAM go into administration to achieve these because the value of their shareholdings are small compared to the value of the contracts, future contracts, rigs and assets.

The suspension will not be lifted until the liquidity crisis is resolved and the accounts filed.

[dealy] 01/7/2022 18:25

Fair enough. I see your point. But on the other hand talks with the shareholders are proceeding at an urgent pace to solve this issue

[pwhite73] 01/7/2022 18:16

You cannot complete an audit with a going concern qualification when a company is insolvent that would be fraud. LAM defaulted on a $26 million loan on 27/06/2022 and requires an immediate $20 million for payroll in June/July 2022. A cash injection is required before the audit.

Speak Later

[dealy] 01/7/2022 18:11

They are giving themselves maximum flexibility. Only last week they told us the audit was nearly complete. They didn't say "the audit cannot be completed until the financing has been agreed"

[dealy] 01/7/2022 18:09

you can complete an audit with a Going Concern qualification

[pwhite73] 01/7/2022 18:08

RNS 01/07/2022 - "This is expected to be before the end of Q3 2022."

Before the end of Q3 2022 because they will either be recapitalised via a takeover or in administration by then. Blofeld must make a takeover offer on or before 22/07/2022 and Sami must make a takeover offer on or before 29/07/2022. The audit cannot be completed before these dates as the company is currently insolvent.

[monte1] 01/7/2022 16:56

#16507

’ It's not inconceivable that they will be released next week’

Read the RNS ffs.

[dealy] 01/7/2022 16:54

They released results last year on the 29th of June. This year they endeavoured to make the same date but the audit wasn't finalised. But it's worth mentioning that it is around this date so it is not as if they are long overdue.Nobody knows how much longer it will take but it is a long established company and they have said that this process is well advanced. It's not inconceivable that they will be released next week.Meanwhile Sami sees value and synergies and will likely put forward a competing takeover offer. At the same time financing discussions are taking place. I would say that the chances of the shares being north of 15p are very high