Phoenix Copper Share Discussion Threads

[bubface] 09/2/2008 19:11

vob,i make the difference between £210m and £187m at £23m not £33m.but still therefore over 10% of current market cap which is viewed as significant by the regulatory authorities.
still confused by the escrow £15m you mention is it relative to £210m or £187m.
confused ? you will be.perhaps they had hasselhof doing the rns's too??

[chorister] 09/2/2008 18:20

>> Very old Bob ...

Obviously not too old to do some really decent homework! Many thanks, your posts are exactly what a BB should be about. Much appreciated.

[bubface] 09/2/2008 16:18

vob,it would be nice to get a static picture of how we stand.the difference between annouced sale proceeds by pxc and tiscali represents more than 10% of the present market cap and should be clarified...how else can we attempt to value a company than by official rns's.
i still feel that there will be a relatively pleasing outcome to this,deubens,his friends and family,ubs and a whole host of other people that have backed him are shareholders here,he has no other reason than to maximise value.[personally he has more money in pxc than oakley]
we will have to wait and see.

[veryoldbob] 09/2/2008 15:58

For pre-disposal balances, the last interim report gives the balance sheet as of 30th June 2007. That's where I got the 130M debt figure from. Cash and equivalents were 35M odd at that time.

Misrepresenting the sale price by 33M is a bit naughty but I've never caught them quoting the £210M without those magic words "before adjustments". Made a difference to my calculations!

Almost time for the annual report which would shed a bit more light on matters, but I suspect it'll all be over by then...

[bubface] 09/2/2008 15:11

thx vob for digging out the news items.my estimate of current £100m+ is not reliant on tiscali exact proceeds,but also combination of other factors such as pre disposal balances,i believe the company also retained the freehold properties from broadband biz worth £10m [have these been sold?].
i do think the company should have given more information/guidance to shareholders with statement as to current cash status post loan payback..especially when there is the discrepancy that vob has alighted to.but why should thay start now?

[veryoldbob] 09/2/2008 14:50

By the way, the figure held in escrow is (according to PXC at least), some 15M due to be paid in June 2008, so can't explain the 187M figure:

"Subject to the adjustments referred to below, this consideration will be satisfied at completion, save for the sum of £15,750,000 which will be held in a retention account controlled jointly by the Buyer's solicitors and the Company's solicitors"

[veryoldbob] 09/2/2008 14:41

Chorister:

Note that everytime PXC mention the Tiscali sale the magic words "before adjustments" are mentioned! Tiscali have made two formal statements to the Italian Stock Exchange confirming the figure *after* adjustments:

"The price originally established in the contract for the purchase of the Division, GBP 210 million (around EUR 310 million), was subject to an adjustment mechanism and reduced, when the Transaction was finalised, to GBP 187 million (around EUR 274 million) based on the estimates of the net financial position and working capital of the Division at that date, as well as the number of active customers of the Division as of 31st August 2007."



and again in the latest set of interim results:

"The acquisition was approved by Pipex's shareholders' meeting and by the UK Office of Fair Trading on 17 August and was formalized on 13 September 2007. The final price was established as GBP 187 million (around € 273 million)."

[spights] 09/2/2008 14:19

bubface I agree with you.I would be happy to have around 12p per share back (although I would have liked more) Plus I am pleased we are not selling Freedom4

[bubface] 09/2/2008 13:27

the £210m is the sale price for broadband,£23m held in escrow pending meeting sale criteria.some has already been released i understand and the rest could be released if the company pays insurance premium against likelihood of claim or not sure of the timeframe.there was competitive interest in the assets being disposed of,oakley will not be able to steal them.deubens does not decide whether they sell the assets and at what price...it is the independent directors decision.i still think that the sale will realise £120-£130m.
i think the company has net cash in excess of £100m currently and with sale proceeds recieved i still think we will get equivilent of 10p + in cash and a equity holding in freedom4 worth 1-3p [wide i know].
increased holding friday below 7.3p...a steal.

[chorister] 09/2/2008 12:09

>> Very old Bob

Any reconciliation between the £210M headline sale to Tiscali and your £187M? I may have missed something, but I can't see it (though the market seems to be agreeing with you).

TIA

[troys] 09/2/2008 10:05

How much will UBS be charging for investigating a number of strategic options?

[buywell2] 09/2/2008 09:50

What are the 'further debts' ?

Should the sale of its hosting and networking business go through, Pipex plans to add the proceeds to the remains of those from the broadband sale, and return the capital to shareholders, after clearing possible further debts.

[joesmoke] 09/2/2008 09:34

I won twenty quid on the eurolottery last night, more than i ever got out of this lemon

[veryoldbob] 09/2/2008 09:33

Latest calculations:

As of 30th June 2007, total debt was 131M. With the bonuses paid on redeeming the bonds and the ongoing losses, the figure now must be higher (there was an extra 5M in short term borrowings alone, let alone fees and share options and PXC's share of the losses in the JV with Intel was running at 1M a year).

Tiscali paid 187M after the famous adjustments, which leaves a net profit of 56M. The latest news story puts the sale of the Business and Hosting Division at 85M. Previous reports have said 100-130M. If the division sells for 85M, the total is 141M or 5.8p a share (with 24.1bn shares in issue). If it sells for 130M, the calculation is 7.8p a share. Take the middle "valuation" and you get 6.5p a share.

With only one purchaser (hmmm, wonder who that is?), I suspect it will be the lower price. Being generous though and taking the 100M gives 6.5p plus a stake in Freedom4. If that's worth a penny or so, you get the current market cap. Might be scope for a penny or so more but I'm afraid my estimates were horribly wrong.

As for the Freedom4, who knows? I hadn't seen this statement before (from the last annual report):

"Pipex Wireless Limited, our partnership with Intel, is governed by a constitution which requires that for major business decisions the unanimous agreement of shareholders is required. Consequently, Pipex Communications does not have management control of the business.."

How do you value an undisclosed percentage of a JV over which you don't have management control?

As usual, IMHO, DYOR etc

[veryoldbob] 09/2/2008 09:31

Spights ------18p
Donkeystone --17.99p
Troys --------17.20p
plast---------16p
Tonybaloni ---15p - soon
MavTT --------14.75p
fullupfool ---14.50p
singy --------13.5p
bubface ------13p
ps0u3165------12.75p
SarahBudd 12.4p
veryold bob --12p
chrissey -----11.6p
propane-------11.50p ------need more (you will)
metamopper----11p
dave-w -------10p
Invest Ted ----9p
Joesmoke (returns) ---7p
Howling 0.002p

[bubface] 08/2/2008 19:01

business' worth £85m??? think more like £120-130m.with £85m they reckon £200m payout.with £120m,therefore £235m to payout.about 10p equivilent per share,then there is freedom4.maybe a tender for 80% of outstanding at 11p,leaving wimax and small cash for the 20% shares left outstanding.

[vivgav] 08/2/2008 18:57

so how many pennies can we expect?

[bubface] 08/2/2008 18:55

Pipex shareholders closer to windfall
By Emma Thelwell
Last Updated: 3:37pm GMT 08/02/2008



Pipex shareholders are one step closer to a windfall worth as much as £200m, after the telecoms group revealed today that it is in advanced talks over the sale of its hosting and networking arm.



The group, which began a strategic review with adviser UBS in March, said it had received a number of offers for the business, worth around £85m, and is now in the final stages of a sale with one potential buyer.

Pipex already sold its broadband business to Tiscali for £210m last September and has used the cash to wipe out £90m of debt.

Should the sale of its hosting and networking business go through, Pipex plans to add the proceeds to the remains of those from the broadband sale, and return the capital to shareholders, after clearing possible further debts.

The group's fledgling wireless unit would be all that is left of Pipex, and would represent a fundamental change to the business under the rules of the Alternative Investment Market - forcing it change its name and seek shareholder approval for the deal.


The wireless business owns licences to offer broadband services using the long-distance technology known as WiMax. It already operates under the name FREEDOM4, a joint venture between Pipex Communications and Intel Capital.

Pipex told shareholders today that should they approve the sale of the hosting and networking arm at a general meeting in March, the group would rename itself FREEDOM4 Communications.

It said today: "We believe the wireless joint venture continues to represent a long-term growth opportunity, although it is still at an early stage in its development."

FREEDOM4 currently provides WiMax services for Nokia Siemens, Ericsson and National Grid Wireless, among others.

However, analysts at Goldman Sachs recently noted the capital risk in the roll-out of WiMax.

[troys] 08/2/2008 17:36

Not enough small shareholders to make much difference IMHO

[bubface] 08/2/2008 17:16

it's a legal technicality that needs shareholder approval and a court visit to be able to distribute the cash.

[sweepsmate] 08/2/2008 16:07

Having just read the announcement put out be Pipex it sounds to me like they are trying to pull the wool over our eyes and that they do not intend to return the money they got from Tilscali. Am I reading this wrong? Because in September it was a forgone conclusion that the proceeds from the sale were going to be distributed to shareholders, it was just a case of when! Now it seems that the companies act won't allow them to do this! Or are they just using this as an excuse.
What is mean't by capital reduction is this another term for share consolidation or just a way of reducing the share price.

[buywell2] 08/2/2008 15:58

I think PXC management are the only ones who will probably do well with this stock

[spights] 08/2/2008 15:54

I hope not:o(

[veryoldbob] 08/2/2008 15:36

"Following receipt of a number of indicative offers this sale process is now at an advanced stage with a single potential purchaser."

Now I wonder who that "single potential purchaser" is? My money's on OCL...

[propane] 08/2/2008 15:24

Pipex receives offer for hosting, network units; says group not for sale
AFX


LONDON (Thomson Financial) - Pipex Communications PLC said it has received offers for its hosting and network services divisions and that the sale process is now at an advanced stage with a single potential buyer.

The provider of telecommunications and Internet services said it is not in discussions with any party about an offer for the group and it is no longer considering a potential sale of the group as a whole.

Pipex Communications said if the sale of its hosting and networks services divisions are completed, its remaining operations would consist solely of the wireless joint venture, which it believes continues to represent a long-term growth opportunity, although it is still at an early stage in its development.

At the same time the company announced a share reduction, which requires court approval, and would effectively free up the proceeds made on Pipex's sale of its broadband and voice operations last year to Tiscali SpA, for return to shareholders.

Pipex said: 'The capital reduction itself will not involve any distribution or repayment of capital or share premium by the company and will not reduce the underlying net assets of the company.'

It said it intends to change its name to Freedom4 Communications PLC prior to the expiry of the licence for using the name Pipex, on March 13 2008 and implement the capital reduction.

Both these moves require shareholders approval at the general meeting which will be held on March 3.