It feels like whatever good news may yet be to come, the market will not believe until there is some hard profits in the bank.
All we have to go on so far is promised made, promises not delivered.
And I am a long term shareholder. |
Tomorrow begins METS Amsterdam 24 which should feature a high profile display of NEXUS - (aka 'Em-trak X100'). Hopefully ST will ensure some gallery photos pronto.
I would presume that tomorrow will also see the end of the information / comments embargo which will have been observed by the various bodies invited by SRT to participate in consultations and lengthy pre-production testing of this remarkable piece of kit.
ST has been conspicuously cautious about getting NEXUS exactly right before launch and we have to hope that the lengthy time and significant investment of resources will be rewarded. |
This company SRT is in a very unique place and is going to make a fortune, whilst helping to save the planet. That is a win win and will attract investors. £2 a share here we come. |
 I understand that it was Ocean Infinity which approached SRT in the first instance, offering to take a slice of the company (about 9%). I assume that they recognised the synergy between the two companies. O I could bolt on robotic vessels to SRT contracts and therefore use SRT as a route to market. It was SRT which approached O I for the recent cash support and both companies recognised the importance of the Kuwait contract. O I was in effect protecting its original investment because if there was no Kuwait contract SRT could be on a downward spiral, with few options for bolt on robotics. We now have a situation where SRT has a strong financial future and is the global king of the MDA systems market. I just wonder how the Saudi coastguard feels about the Kuwait impending system, together with O I robotics. Can't Saudi afford such a sophisticated system? SRT and O i make an impressive team.
When the dust settles O I will issue a RNS identifying the size of their shareholding.
Now that Oliver Plunkett has joined the board, the company must issue a RNS if they just buy one more share. Concert parties are an interesting concept with regard to the takeover code. Any parties deemed as acting in concert must declare their holdings. If an employee of O I, or someone connected to O I buys a SRT share, are they deemed as acting in concert? Does O I have a duty to notify all employees of their obligations if they buy an SRT share? Question for Oliver Plunkett at AGM?
I feel more relaxed about O I's intentions with regard to a takeover. The code is quite protective of small shareholders especially as I believe that we have substantial holders who might have a vision of reaching a market cap of £1 billion. I believe that this is known as a 'Unicorn'.
PS. I get the impression that there are one or two disgruntled shareholders here who would enjoy life more if they were to sell up. If you have a substantial holding, may I suggest that you contact Cavendish who probably know of an institution looking for stock. Unfortunately there are only small numbers changing hands now and this prevents an institution from obtaining a generous sized stake. |
I thought it was 100% irony or satire and anyone who disagrees must be daft. |
I took it to mean the Internet encourages argument not being able to see another point of view. Maybe I didn't get it either. |
kb - thank you for that sphinxlike comment but, being a bear of little brain, could I ask you to very kindly clarify what on earth it's supposed to mean? |
AE said..
I've been weighing up the various arguments posted here today and can see why there are opposing views
This isn't how the internet works. |
Not sure if i saw this posted but Simon Thompson says Retail offer is worth subscribing to.... closed now obviously but was from the other day i guess at least he's still keeping a watchful/interested eye on them |
Well done SRT and thank you OI for your faith in SRT. Yes, you get your pound of flesh. Not dreamily ideal but that is normal. Not a problem for me. What really was SRT's alternative? Nice ideas to ask Kuwait to split the contract or delay the contract until xx date, or wait for money to come through from Indonesia/wherever.......but now we are on a much sounder cash footing. Yes the company can fail. That has always been the case. But...but...it looks less and less likely that it will be due to a lack of cash resources. All good in my book. Onwards and upwards after a few positive RNS contract awards/other positive news. Hopefully starting next week of course. Apparently some are due in the next six weeks...... |
I suspect they started off on the wrong foot, thinking it would be more straightforward than it proved, and then for the usual reasons couldn't back out. |
In a short time, this thread seems to have gone from looking forward to major contract signings and being confident that SRT hasn’t got any competitors tendering, plus looking to the future with multiple contracts, to doubts about everything.
There have been many chances to get out, if anyone had got nervous about prospects or analysed the likely business requirements to fulfil contracts and didn’t like the look of it.
I’ve had SRT shares since goodness knows when, but the details of OI’s shareholding, the placing etc etc hasn’t put my nose out of joint.
Biggest disappointment would be an early takeover, but I don’t think that I deserve anything particular for holding such a long time. It was my choice. I’m not under any illusion that any company will put my personal wants before its own requirements to get the job done.
If it turns out OK, this week will be forgotten quickly. |
I didn't think of that, Super. An elegant and simple solution. No doubt the contract is in very separable milestones in any case. |
LV - I would much rather they'd split the contract into two or three tranches. That would have achieved all the same end goals without the current (entirely justified) hand-wringing.
And yes, I know it's easier said than done, but I remain somewhat baffled as to why such a Gordian knot-cutting approach couldn't have been managed. |
LaV, what you write suggests that there's no added value in the relationship with OI beyond this one Kuwait contract. For my part I don't believe that's the case:
- inflow of immediate £7+m hard cash
- doubled if, as, and when OI exercises its warrants
- backing of a strong shareholder (or at least one perceived to be strong) will discourage lowball bids
- OI CEO now on SRT board as nonexec, admittedly unknown quantity but generally seems to be considered positive;
and most of all
- OI technical [subsea] support for future system contracts etc, as well as potential further financial backing if required
We can debate ad infinitum whether or not the relationship with OI is good value for money, but it's certainly not one-way traffic - not all cons and no pros - as you seem to imply. |
If you look at the thing in the round, SRT has sold 20% of the company and incurred $21 million of debt to get this contract. At a 20% margin is that worthwhile? 30%?
I would much rather they had stalled the Kuwaitis until they had cash inflows from Indonesia and Saudi. If the counter argument is that Kuwait would have shopped elsewhere, that doesn't say much for SRT's system
I get C5's argument that this will lead to more work in the region and if they didn't do it their regional hopes would be unlikely to materialise, which again does not say much about their system. |
An export credit agency would normally have its own internal progress check requirements, before it was allowed to sign off on any re-distribution of credit risk/responsibility.
UKEF is also a party to the other (delayed) contract signing. Have they been the ones foot-dragging there - Indonesia being /becoming dependent on Kuwait?
Who knows?
But if ST and SRT hope to remain independent, they must surely see that this may be a drink at Last Chance Saloon and will be busting a gut to get it right this time.
AFAICS
GLA |
hfs
It also appears that there is some confusion between the bond amount and the cost of the bond. Unless I’ve got it badly wrong, the whole purpose of the bond is to insure the customer and the contractor. In this case the cost is just expensive for SRT and indirectly for its shareholders as a result of dilution with OI shares. |
You're getting a little tiresome now.Sovereign state issue $213m contact to a UK based £100m company, of course they were going to ask for some form of guarantee (performance bond) as SRT have not yet completed such a project.Would you prefer we turn down the contact due to the performance bond and the execution risk ?You could look through a different lens, if we deliver OTOBOS we get the bond back. |
It would be nice to see plucky little UK businesses fighting their way gradually to greatness with full backing from the investment community, but we’re too conservative and today’s world isn’t like that.
No good blaming the companies.
SRT is aiming at big contracts - that isn’t a gradual process and working capital is a nightmare to manage.
There were only three options - being taken over before signing any contracts (unlikely), get a large investor, or make a big placing a while ago (imagine the complaints). |
No doubt you are right Extrader. Who gets to confirm failure to deliver or perform?
What would happen if say UKEF was pondering whether to step in as guarantor of the bond in six months time and no performance at all had happened on the contract with a two year implementation period? They would probably ponder some more and for them pondering for two years doesn't seem a stretch. |
A PB is typically called at the end of a contract, on confirmed failure to deliver goods/ perform to spec...which wouldn't be known until a fairly late stage.
At least in my (dated) experience.
On site visits to road construction contracts (%age completion stage payments) it was common to be able to drive 50 to 80 Km along completed road..and then have to drop down to cross (slowly) a riverbed :
the (value-adding) bridge completion being dependent on other stage payments being relatively up-to-date.
GLA |
pidazzle
That is the $21 million I am on about. Any hiccoughs on the Kuwait contract and that $21 million is lost, whether it is replaced by a UKEF guarantee or not. Who knows whether the performance bond includes a time element but if it does then woe is us. UKEF is providing the assurance to Kuwait not SRT and if Kuwait call the bond SRT is on the hook. |
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