Thanks Alter-25pc is a key point under the Companies Act as you know |
I’m forming the view Super that OI has no choice but to put something up.The accounts , the long awaited accounts, will reveal all.
The dance is almost complete-the good new s of the contract award, the funding, then the 2024 accounts-probably tomorrow if they stick to the timetable |
One rather obvious conclusion is that OI thinks it's a bargain at this price, and is happy to take as much as it can get. It surely can only be a matter of time before they attempt to take full control - perhaps the next time ST needs money?
I would have no problem with this, provided the price was relatively sensible, but would positively welcome it if it left me without the systems business, but with an ongoing stake in a separate transceivers+ business. Not an outcome I think very likely, but one can always hope... |
 "Anyone know what percentage OI will have after all the dilution?"
Using the numbers I posted earlier in 14982, I have created a spreadsheet based on the current number of shares in issue and the number following the fund raise and the 20m warrants. This says OI will own 23% and if they exercise the 4m warrants that increase to nearly 24%. In arriving at these numbers I have assumed the 7m shares for existing holders are not taken up and pass to OI. This shows the maximum position OI could reach but obviously it's very unlikely. The percentage owned by others drops from 46% to 38%, again if no-one increases their current holdings.
Please bear in mind that the total number of shares in issue goes up when warrants are exercised but I've allowed for that in my calculations.
There are shareholdings I am unable to quantify eg LaValmy trust and probably others so given all the other variables please take the percentages with a pinch of salt. Nevertheless it's pretty clear that OI will have a commanding stake. |
Every time they have said that a customer needs a system urgently nothing much happens and/or they come a cropper. Saudi comes to mind.
In this case, they could certainly have managed the negotiations so that implementation starts in six months. They currently don't have the cash to order any equipment and are still looking for the three staff they think they need to do the project. Starting on Thursday.
Given that they will have a slow start and that the timescale is likely to be over-ambitious, how much of the bond will be called?
Or to take a rosy scenario in which all goes well, the share price recovers and gets to 70p in six months. This short term loan will have cost close to $10 million in opportunity cost.
As it stands, we will have to wait until there is a broker's note for some idea of the margins on this and the other contracts, but I don't expect that they will be high and I do expect that fixed costs will rise as usual. 2025/6 should in theory generate the highest turnover but I doubt that eps will hit double digits then or in the foreseeable future. |
Where is CM today after all the pushing and shoving over the last couple of weeks?
Anyone know what percentage OI will have after all the dilution?25pc plus would give them a pretty strong position on corporate activity |
LaValmy, I think the company is worth around £90m.
Where better should SRT raise moreorless immediately $21.4m for the performance bond?
Or you think better to ask Kuwait if they would be happy to wait 6 months (or whatever) before contract starts?
Meantime the company anyway needs cash for day to day expenses. Hence the issue of 21.5m shares at 35p.
Let's hope SRT do not need to issue any further equity in the case they cannot repay the loan within 8 months. |
Spin back over the last 18 months and you will see the promises and forecasts in a different light and to remind all, the company isn’t punching above its weight other than in raising expectations and money at higher and higher numbers
Maybe we will see some commonsense with the OI guy on board |
I don't know about that YumYum.
How much do you think the company is currently worth if they might need £7 million of new equity in three years?
They haven't got financial security with that. They have sold 20 million shares at 35p (at a minimum) for a six month loan, funds they will not need in six months time. |
Well said YUMYUM! |
I think it is a pretty good deal under the circumstances.
Powerful and rich Ocean Infinity are standing behind little SRT who manage somehow to punch far beyond their weight.
It is a game changing result. Dilution, financial security, further dilution options already in place for continued financial security, and a massive contract to start in a few days. I think we can say goodbye for good now to those share price lows.
Well done SRT and thank you Ocean Infinity.
I am happy not grumpy. |
I’m not quite as ‘disappointed’ as you Homeboy but the smoke and mirrors really has to stop.The 24 numbers are likely to be poor and the accounts will reference going concern, broken loan covenants but also the money coming in over the next few weeks from OI.You can see the sequence of events all now fitting into place.
The reality now is that if these contracts materialise, they still need installation -not easy in these jurisdictions |
Yes.
Full marks for effort, though. |
as i said last month,,,,,"homeboy24 Sep '24 - 16:11 - 14711 of 15023 Edit
0 1 0
must be getting close to 2m left in cash,,,another 2 months worth of pay days,, they'll have burned through most of the ocean infinity and beyond life line by now, they'll be having to tap into the revolving facility soon,,,,, just a question,,, if they had to fudge the year end dates to get a contract that didn't happen in the end, will they have another balance sheet problem that prevents any sane country from putting multi million dollar projects their way when they've got no munnee left
same old srt" |
I’d be interested in any alternative ways of running the business in the last few years, in order to get more contracts signed more quickly, from anyone who has run anything similar.
It remains to be seen if there will be a rush of contracts to other companies with equivalent tech.
Does anyone know of any direct competitors?
Got a feeling the answer has been no for quite some time.
Difficult to separate disappointment with one’s investment, from the reality of an actual business, isn’t it? |
Hopefully Plunkett's arrival will bring a bit of focus/discipline to the Board and its grip on SRT's finances.
As to the PB, my understanding is that :
- SRT is required to post a bond for $21.4m (ie 10% of contract value....hmmm, I'm more familiar with 5%...) as surety for its ability to 'perform' (duh!) its contractual obligations ie delivery of specified kit that works as described;
- it's evidence for the client that SRT's bankers believe it'll be around long enough to fulfil its contract obligations, including maintenance. It would be interesting to know the duration of the PB...and how it phases out as the contract progresses/completes).
- SRT's bankers aren't willing to post such a bond without 100% cash margin (make of that what you will), so SRT has got a bridging loan in cash from OI that SRT will in turn place with its bank, which will then issue the [cash collateralized] PB, which is sure to be a Condition Precedent for contract signature.
- with the Contract signed, SRT's bankers will/should release the 100% cash collateral they hold (which SRT will then return to OI) in exchange for an equivalent (substitute)guarantee from OI in favour of the bank.*
* This tells you something about SRT's still parlous state with its banker, even after securing the Contract.
It also pre-supposes OI's own credit-worthiness, of course, and will come at a cost.
- SRT will use the proceeds of the placing + other cash inflows (Indonesia? Kuwaiti / Phillipine/ Saudi invoicing and 'revenue milestones') plus other support (UKEF facility AND £7m proceeds of OI 20m warrants) to convince its bankers to release OI from its guarantee obligations to the bank within 6 months and accept SRT as a stand-alone risk thereafter.
- OI gets 20m shares in SRT at a discount and - if there's any slippage (surely not!)beyond that - the chance to tighten its grip on the Company. Not quite a CLN situation, but maybe rhyming somewhat.
The mid-morning announcement, convoluted nature and 'cash is king' solution speak to the urgency of the situation....and the 31st October deadline.
I'm sure they were burning the lights over the weekend...in MSN and elsewhere!
All AIUI
GLA and ATB |
I don't think thet will get much beyond £1, sad to say after all these years. Dilution, loss of any first mover advantage that they might have had etc will have a large negative effect on the returns I had been hoping for. Becoming the incumbent in some countries is about all I expect and even then that may not be all that valuable, e.g Bakamla if their position weakens or the BFAR and whither that might go. |
Think Tucker us going to have to get his options repriced
Latest batch of shares plus warrants means there will be something like 265m shares. Those £3 options mean market cap has to be around £800m to break even and £1bn to be meaningful.
That’s a big ask. |
As I keep saying, keep following the cash-or lack of.
This is yet another example of missed timelines-yet another.
The 2024 accounts will be horrible and will have a going concern note which is overcome by this latest cash raise
As I said a few weeks ago, David Brent and the good news/bad news trick |
In fact the broker note (8th March 2024) from when they moved the year end says that:
'The company is actively delivering and invoicing on multiple concurrent projects.'
So how come system revenues will be zero for the 15 months? What did they deliver? What did they invoice?
They go on to say:
'The company has multiple sources of debt financing sources to fund working capital requirements and the £14.9m debt components include £8.7m LGB loan note and £6.2m loans (£2m Barclays and supplier loans).
By 15m FY24E to June, we do not expect any further drawdown of debt within the three months to June. Instead, the company is expected to have paid back £1m of the Barclays loan and a portion of the supplier loan.'
So that looks like £4.2 million of supplier loans were outstanding in March, some of which they hoped to repay by end June. |
Normally the performance bond cost is 1-4% of the bond value. As it is, that cost is now intangible as its in share options, but the injection of capital from OI enables the bond.
The capital from OI is to enable the bond that otherwise might have been unavailable given the size of the contract(s) vs SRT’s balance sheet/financial situation.
I’m sure the bond value itself is not any sort of dodgy discount on the contract payments SRT will receive. Nobody would do any contracting if that is or was the case.
In fact, having had client payments delayed years ago in contracting myself, I assume the performance bond is also a kind of insurance for SRT. |
Hatfull
I don't think you factored in the large stock component which has been sitting in England for well over a year. Some has been supplied on supplier loan as the broker said in May, but much must have been paid for. In fact some has been sitting there for two years now, the Saudi stuff, so at least that will not have eaten into the last fundraise, just the one before that. Not impressive use of scarce resources. |
The broker says:
'The financing package is a positive development, indicating well-funded and significant progress towards revenue milestones with initial recognition estimated to begin in the New Year.' So still sitiing on the tarmac at MSN.
but the placing is
'to complete at the earliest opportunity and subject to shareholder approval'.
No AGM for me then |
I'm not sure about that [is quite simply because they have run out of money again] LaValmy.
"In January 2024, we successfully completed an equity cash raise of £10.5m. This placed the Company on a strong cash footing intended to enable us to withstand the variances that come with our strategy of becoming a large global maritime systems business. In addition, we retain our secured loan note programme where we have existing undrawn capacity of £16.7m. Thus we are in a positive position to weather the project delays"
My calculations show they had a cash runway (excluding the undrawn facility) until April 2025 as they had a "relatively fixed cast base"
More to give OI a bigger slice of the pie.
There's a £45m milestone payment on signing the Indonesia contract |
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