London Scottish Bank Share Discussion Threads

[grlz] 29/5/2008 23:49

Appears there is a misunderstanding to the content of the rns

£32.5m relates to the minimum capital LSB as a group needs to hold. The shortfall is around £13.8m

The new £83.5m + £1.5m overdraft facilities arranged for RW bridges this regulatory shortfall in the short-term by over-lending £15m subject to repayment upon (a) the sale of invoice discount and issue/placing thereafter or (b) failing both the sale of RW itself. Essentially offsetting monies LSB expects in future with borrowings today returning to what was probably the originally negotiated £70m finance package imho

The positive is the 10 syndicated banks in question have performed extensive DD on LSBs current financial position which I imagine focused heavily on further impairment risk and have then offered a £70m advance going forward, at a decent rate imho.

Next step is completing the sale of the InvDis business - Then LSB can finalise it's fundraising, which imho will set about to clear the balance of any capital requirement (if needed) and provide additional funds towards expanding RW which LSB quoted:

Debt purchase / debt collection
Robinson Way's debt purchase business continues to grow and, in the 5 months to March 2008, 23 portfolios were purchased for a total consideration of £11.9m (5 months to March 2007 - 17 portfolios for £6.7m). Receivables growth, together with continuing strong collections, has resulted in a 44% increase in interest income and additional income from debt purchase to £8.5m (5 months to March 2007 £5.9m).

DYOR

[ihavenoclue] 29/5/2008 23:37

M4P ... all i can see it that O is ordinary and K is trade using the bulk trade facility.

[m4p] 29/5/2008 21:01

states it as an OK trade on Barclays

[lagos40] 29/5/2008 20:57

M4P

Misunderstood sorry, what type of trade was it?

[m4p] 29/5/2008 20:37

thanks lagos

no what i was referring to was the type of trade ok trade not an o trade

[lagos40] 29/5/2008 20:28

M4P

If you mean the share price price now to buy, I think it is still a decent price, obviously not as good as it was at 5, 6 pence etc, but don't forget there are a lot of people I imagine involved with LSB with shares valued at x2, x3, x4 ++ the current share price value so to that degree they are still a good buy.

I cannot top up any more as all funds are stuck elsewhere, was hoping to get back in before these jump up to perhaps 16 - 18 pence (with the news from the sale of the factoring arm) but like wirral has referenced I think the sale is very close now. I have mentioned before I am in this for the longer term, hoping to release a little profit along the way.

Night from the sunny Algarve.

[m4p] 29/5/2008 18:39

Lagos40 good spot

what is an OK purchase?

[lagos40] 29/5/2008 18:19

350K buy @ 16.27 mmm.

[lagos40] 29/5/2008 18:13

citygirl

"All the more surprising then that this good news you guys keep promising hasn't materialized"

must be missing something perhaps, haven't seen to many "promises" made from the guys on this BB, I think the messages posted here in the main over the last months have been quite open and honest news snipets etc, and in the main very helpful especially to me. Thanx all keep the faith.

Pays ya money, ya take ya chance.

[m4p] 29/5/2008 17:03

CG

This is a very risky stock at present hence the low market cap

If you don't like the risk best to sell and take your profit

However if LSB sell the factoring business and make some other none core disposals and have the rights issue things might look a lot rosier

The price seems to be holding quite nicely at present (good sign)

When the factoring sale is confirmed I can see this being marked up (how much depends on what they get for it)

From reading your comments it seems to me that you are not prepared to be patient, so take it from me if you adopt this approach on all your investments
you will lose more often than you succeed (i have been there and done that!)

Regards

[city girl] 29/5/2008 16:49

I don't see today's announcement as good news if you read it carefully, although that's the spin the company is putting on it.
They've got a temporary facility that keeps the group trading for the time being but come October the threat is there to start a forced sale if the board haven't got their house in order.
All the more surprising then that this good news you guys keep promising hasn't materialized.

[m4p] 29/5/2008 16:47

CG that was the day b4 yesterday keep up

[ihavenoclue] 29/5/2008 16:38

I am a bit surprised by the market reaction ... i felt this was very good news today. Maybe i really do have no clue LOL

[city girl] 29/5/2008 16:29

Today's RNS reports that AXA have just dumped a load of shares (550,000)?
Are they looking to get out?
This seems a very odd move if this long awaited good news is just around the corner.
Should I be worried?

[m4p] 29/5/2008 13:56

Davius

You have summed up my thoughts in a nutshell

It is now clear to me that it is a combination of the sale of the factoring business and a rights issue that will reduce the facility to 70 million

But where are they going to get the other 17.5 million from?

Have they enough assets excluding Robinsons Way that would fetch that much?

Or is the rights issue going to be larger than 12 million?

[johnspain] 29/5/2008 13:30

maybe a daft question, but

if Cattles are willing to spend £200m to aquire a banking license, why don't they just buy out lsb and get the banking license for the (lower) price?

sorry if already covered, not been paying close attention here.

[ihavenoclue] 29/5/2008 13:14

Yes ... they need to cut off the dead wood to show the true potential of RW

[davius] 29/5/2008 13:04

It's an interesting RNS. It says the £85m facility will be reduced to £70m "following the planned sale of the Group's factoring business and the completion of the planned equity capital issue the facilities." I read that as meaning that both the sale of the factoring business and the equity issue will raise £15m. The implication is that if the factoring business raise says £8m then a rights issue would need to raise £7m.

The part M4P is no doubt commenting on is:

"In the event that regulatory capital of a minimum of 32.5m has not been raised by 31 October 2008, the facility's maturity date will be reduced to 28 May 2010. Additionally, in such circumstances, the Company has agreed to take steps to effect the sale of Robinson Way or the Group by 30 June 2009."

That presumably means that they need to raise an additional £17.5m by the end of October or they have to sell Robinson Way or the whole group by June next year.

I can't imagine they'd have a rights issue shortly and then another within 3 months, so either the issue will raise the extra funds or it will come from additional disposals. It seems to me that the intention is for LSB to end up as Robinson Way and nothing else. And that's no bad think in the current climate.

[ihavenoclue] 29/5/2008 13:01

This is looking more and more manipulated as the day goes on ...

[ihavenoclue] 29/5/2008 12:59

M4P ... you are correct ... they need to sort out the disposal of the factoring business but the RNS seems to imply to £15m and not £10m. They need to show they are on an even keel and moving forward in hope the market will respond ... the better the responce the less dilution

[m4p] 29/5/2008 12:49

Am I correct in thinking they need to raise £32million this year through disposals & a rights issue? or they effectively have to sell the company

The factoring business will raise circa £10 mill?
The rights issue would then need to raise £22 million?

Are there other disposals they are considering that would limit the dilution?

[davius] 29/5/2008 12:44

Short term buy, medium/long term sell according to that site. Of course it's only based on charts and share price movements and takes no account of potential movements for new bank facilities, sales, etc, etc.