Leadcom Integrated Solutions Share Discussion Threads

[njp] 03/4/2008 10:39

Seems you missed this, Haywards. From the accounts:

'The consolidation of YTelcom's balance sheet into Leadcom's resulted in an increase in total assets excluding intangible assets, amounting to US$162.8 million. The decrease in Company's tangible net equity to US$29.1 million (leading to a ratio of tangible net equity to total tangible assets of 17.9%) has resulted in a breach of one of financial covenants with its banks, such covenant requiring a minimum of 25% ratio of tangible net equity to total tangible assets. The Company is negotiating a temporary waiver with the banks, to cure this situation. The main means to rectify the situation are an injection of funds into the Company as referred to in Leadcom's announcement on February 21, 2008, and through generating net profit in 2008.'

Truth is, they're quite highly geared and the terms of the current bond are onerous - hence the high finance costs in 07.

[haywards26] 02/4/2008 13:30

On inspection of 2007 accounts it looks like the following to me, correct me if I am wrong.

$6,5million needed this year as per debenture repayment structure
$13 million needed this year short term bank loans

Cash in Bank = $22 million

Then working capital looks ok

Trade debtors of $73 million
v
Trade creditors of $32 million

So I don't see the need to issue further share capital and dilute everyone if they can efficiently manage their debtors and we resume cash-flow positive operations in 2008.

[madalex] 02/4/2008 12:21

So following their Fed 21st announcement they have terminated talks dure to the companies share price ?

OK, so the share price has dropped from 27p to 19p, but thats only 30%!!!

Something smells very bad here, looks like a vote of no confidence to me, IMHO.

[njp] 01/4/2008 22:47

Haywards

I suggest you take a closer look at the 2007 results. You'll then see that, in the profit & loss account, net finance costs consumed 45% of operating profits and that there are $26m of bank loans and a $33m bond (unsecured debenture) included in liabilities.

The terms of the bond are clearly onerous (though they've taken steps to mitigate this by converting it from shekels to USD) and bank debt has grown to accomodate the Ytelcom acquisition. As Aric says, they clearly do need to take steps to improve the balance sheet.

[haywards26] 01/4/2008 20:52

Don't know what to make of Leadcom at the moment. Am a holder and feel the quarter 1 results are a pivotol moment for us. An upturn in financial performance, along with another nice contract announcement could start to retrieve some of the lost market cap.

At year end we had nearly $23 million in the bank. So what are the funds from the proposed Old Lane investment (up to another $10-15 million) needed for? The RNS states it would be used for significant Indian work and balance sheet strengthening.

I think the proposed Old Lane investment looked to be the better option over the Electra proposal, as the Electra proposal looked like a cheap way of beginning a takeover to me.

Management have to be looking to regain the markets confidence and rebuild their tarnished reputations.

Margin retrieval and cost cutting to ensure a more efficient and controlled operation needs to be paramount. The acquisition last year appears to have been the beginning of the troubles, with the fall out from Nokia a real hammer blow.

[papalpower] 01/4/2008 02:07

Would have been nicer of course if Electra came back with a 34p a share investment offer to beat the Old Lane offer at 31p, but given the credit crisis and equity weakness, not much of a driver to do that I suspect, with the price presently sub 20p.

[papalpower] 01/4/2008 02:06

As to be expected considering Old Lane came in with a later (March 12th) offer of investment at 31p a share, nobody would have accepted the February Electra offer of 28p a share.

Therefore Electra have realised they had no hope of getting approval (being 3p a share lower than Old Lane), and removed their low offer.


Leadcom Announces Discontinuation of Due Diligence with Electra Ltd.

Process with Old Lane Continues

March 31, 2008, Hod Hasharon, Israel -

Leadcom Integrated Solutions Ltd.('Leadcom' or 'the Company', AIM: LEAD), a leading international provider of innovative telecommunication solutions, announces that, following its February 21, 2008 announcement of the execution of a term sheet with Electra Ltd.("Electra"), a subsidiary of Elco Holdings Ltd. ("Elco") (TASE: ELCO), for an investment in the Company, Electra today announced that it has discontinued such process.
In its announcement, Electra stated that the reasons for the foregoing
discontinuation are the current price of the Company's shares, Electra's
estimates that the chances of Leadcom's shareholders approving the transaction
with the required majority are low, and the Company's announcement of March 12,
2008 with respect to the process with Old Lane (UK) LLP ("Old Lane").

Due diligence with Old Lane is proceeding as planned.

Enquiries:Yael Margoninsky - Leadcom
Tel: [phone]

Andrew Godber - Panmure Gordon
Direct: [phone]



The later Old Lane offer at 31p is 3p over the 28p initial offer by Electra.

Leadcom Integrated Solutions LtdMarch 12, 2008, Hod Hasharon, Israel - Leadcom Integrated Solutions Ltd.('Leadcom' or 'the Company', AIM: LEAD), a leading international provider of innovative telecommunication solutions, announces that it has received a non-binding offer (the "Offer") from Old Lane (UK) LLP ("Old Lane"), for an investment by Old Lane in the Company. Old Lane currently holds 5,000,000 shares in the Company, representing 4.15% of the Company's issued share capital.

The Offer follows a preliminary approach to the Company that was announced on
February 25, 2008.

The Offer provides that Old Lane would subscribe for between 16.4 million and
24.6 million shares at £0.31 per share (or £0.34p if the Company records a net
profit of over US$10 million for the financial year ending December 31st, 2008), raising a total of US$10-15 million. The injection of funds into Leadcom will improve the Company's balance sheet and should enable significant additional opportunities in the Indian market to be funded. If the transaction is completed, following the issue of shares the holding of Old Lane would be
between 14.42% and 18.90% of the Company's issued share capital, on a fully
diluted basis. The shares issued would be subject to a 6-month lock up period.
Under the terms of the Offer, Old Lane would also be entitled to appoint two
Directors to the Company's board.

In addition, the Company would grant to Old Lane, at no additional cost, an
option for 30 months at £0.40 per share to purchase such number of shares that
will equal two-thirds of the number of shares that are actually subscribed for
by Old Lane in the first phase.

[captain haircut] 31/3/2008 19:13

Looks very bad!

[jwe] 31/3/2008 18:47

julian-i think the price was inverted for a while i.e you were unable to deal.Sorry you are quite right that is not the same as suspended.Nevertheless this does not look good imo
No position

[stegrego] 31/3/2008 18:22

lets see PP put a positive spin on this fekker!

[julianc35] 31/3/2008 16:57

where does it state that the shares are suspended

[jwe] 31/3/2008 16:43

Not looking good.Shares suspended after the announcement.Running out of cash perhaps?

[papalpower] 29/3/2008 03:56

Some people really do like to waste their time don't they. Is there a number to call for "Stalkers Anonymous".......


alansmith23 - 29 Mar'08 - 03:52 - 66 of 66 (Filtered)

[papalpower] 29/3/2008 03:32

Oh dear, looks like they have let him out and near a computer again....

alansmith23 - 29 Mar'08 - 03:07 - 64 of 64 (Filtered)


LOL :)

[papalpower] 29/3/2008 01:52

Well, I am going to hold at this level now. The short term short at 27p made a nice turn and gave additional profits when closed to take extra long positions on top of the original stake. Average is now just over 20p and thats a level I will leave it at.

Who knows, if bad news comes in three's, we are due another load of bad news, and I would not say it will not come. Its a very high chance it will happen, and so I am leaving any further "average down" until such time as more bad news comes.

If it does not come then fine, so be it, and it can move up from here.

Q1 2008 results will be key, expectations have to be for lower margins on a weighting towards Indian work, but EPS should be around the 0.7p to 1p level imv. So now time to sit back and wait.

[papalpower] 27/3/2008 09:00

Checking the on line limits :


BUY 50K @ 20p

SELL 50K @ 19.06p

[papalpower] 27/3/2008 02:14

Boring end to the day really, buyer not going for any more 20p buys, seller not selling down.

Both put out the carrots, seller put over 500K at 23p up, buyer put near 200K on at 16p levels.

Which one will make the move ?

If another profits warning is coming you'd expect the seller to be moving, however, if Q1 is going to be ok (but lower margin due to large amount of India work) perhaps the buyer will start to move the price back upwards now before a Q1 trading update comes late April to early May time.

[papalpower] 26/3/2008 11:02

My word, you are not an EME holder are you ? All that talk of whipsaw's there...... LOL :)

Given the amount of pathetic fantasy accusation posted around by the numpties, I thought I'd let them read a blow by blow account on trading.