Stanley Gibbons Share Discussion Threads

[jasdan] 23/2/2018 14:36

Simply amazing how many of you do not get this deal.

I know it is complex, but even so....

Don't any of you understand that Phoenix is spending £19.45m for 58.09% of SG?

[jasdan] 23/2/2018 14:33

Augustus, you just cannot make out that the £19.45m investment amounts to accountancy lies!!! That is ridiculous and completely undermines your comments.

You also are factually wrong in your breakdown. It is not that the £6.2m alone equates to 58% of the shares. It is the overall package of money that Phoenix is providing to SG that equates to the 58%. It is for example, including taking on the RBS £17m debt and then cutting this immediately to £10m with the £10m being then spread over five years on such a soft deal that it is not likely to ever be repaid.

You would be better off focusing simply on the fact that to Phoenix, £19.45m = 58% so Phoenix cannot see a return on their investment at this price as and until the stock price exceeds 18.75p.

[augustusgloop] 23/2/2018 14:28

jasdan,

Do you really believe that Pheonix paid RBS 100% for the SGI debt -- in the same deal that SGF paid only 40% ????

In 5 years time - the £10m loan is due for repayment = £12.75m

You can not ignore this in calculating the value of the shares.
If you buy £1m of shares now --- you don't get a payment of £1.275m in 5 years (but Pheonix do).

The shares are effectively for free.

If SGI are able to refinance 5 years from now - Pheonix walk away with a £2.5m profit AND can sell their 58% stake.

[orange1] 23/2/2018 14:27

Here below is Stockopedia's take on matters. Jasdan, I suggest you read it carefully. You don't appear to be a sophisticated investor at all and your understanding of accounting matters rudimentary. Can your Dad assist?

[pugugly] 23/2/2018 14:22

augustus - While not said can it be assumed that the 5% interest is being charged on the nominal value of the loan - ? So rate of 12.50% cumulated over 5 years - Very nice - Even less than nothing left (imo) for the residual PI's -

[augustusgloop] 23/2/2018 14:22

Effectively Pheonix leant Stanley Gibbons £10.2m at 5% (guaranteed no repayments over 5 years) -- and received 58% of the company for free as a 'thank you'.

[jasdan] 23/2/2018 14:20

Augustus, more drivel from you I see.

It is pretty obvious that Phoenix are spending £19.45m to acquire 58.09% of the shares. How that money is spent, is not really relevant, it is simply a £19.45m investment following which they acquire 58.09% of the company. Ignoring any future trading, that then dictates that Phoenix value SG as an overall group at £33m or 18.75p a share.

What you are confusing is the debt with RBS and the acquisition and merging of the debt by Phoenix. Once the deal goes through, SG won't owe a penny to RBS. So that debt is gone and replaced with a somewhat complex inter-company debt arrangement. As majority shareholder, £10m of the debt will technically remain on the SG books, with no need for it to be repaid for five years. A further credit facility at soft terms will be offered by Phoenix if required. And Phoenix is funding £6.2m to provide funding for SG to buy stock etc.

No, this has got to be a mega deal for shareholders. The issue for Phoenix is now getting the market to value SG at more than 18.75p a share so that they can see a good return on their investment, but I imagine this will come sooner than later. Once the EGM votes this through, we will be much nearer 18.75p I suspect.

[augustusgloop] 23/2/2018 14:15

Investment by Pheonix

£6.2m for 58% in shares
£4m for £10m of RBS loans.

But accounted as
£6.2m for shares
£10m for loan Pheonix to SGI (transfer of RBS loan)
£2.75m for 5 years compound interest
£0.5m for possible extra to RBS if outstanding amount increases in next few weeks.

Total investment claimed = £19.45m === Accountacy lies!

They are only stumping up £10.2m of their own money.

And if SGI are profitable in 5 years - they will pay off the loan of £12.75m (including interest) and have the 58% of SGI equity for free.

Fantastic deal for Pheonix.

Shows how desperate SGI are!

[jasdan] 23/2/2018 14:10

Looks a great deal for shareholders.

Clearly, if the £19.45m investment = 58.09% shareholding, then 100% = 18.75p so I expect this stock to move up sharply once the deal is approved by shareholders. Only has 31% support currently which seems a bit odd as the two main investors account for 38% of the shares, and they, apparently, are happy with the deal.

I guess we will all see the price increase once the EGM passes the offer, although there will be no need for any current shareholders to sell out. It is not clear if the current two main shareholders are selling out or staying, but these shares are going to get even less liquid.

This stock has been off everyone's radars for some time, so I expect the price to firm now as we go forward, and perhaps we will go past 10p by the end of February?

[augustusgloop] 23/2/2018 14:09

jasdan -- completely wrong.

It appears that RBS sold the debt at 40% of face value - SGF acquired £7m of debt for £2.75m

The same discount no doubt applied to the Pheonix purchase of debt -- thus £10m of debt only cost them £4m.

So Pheonix total investment is £6.2m + £4m = £10.2m (may come to a bit more in certain circumstances)

For this, they receive 58% of the equity AND £10m of SGI debt.

The stated structure - allows them to legitimately say "Proposed total investment of up to GBP19.45 million by Phoenix UK Fund." but this is highly misleading - because it values the loan held by Pheonix as an investment of £10m when it probably only cost them £4m.

[jasdan] 23/2/2018 13:56

Looks a great deal for shareholders.

Clearly, if the £19.45m investment = 58.09% shareholding, then 100% = 18.75p so I expect this stock to move up sharply once the deal is approved by shareholders. Only has 31% support currently which seems a bit odd as the two main investors account for 38% of the shares, and they, apparently, are happy with the deal.

I guess we will all see the price increase once the EGM passes the offer, although there will be no need for any current shareholders to sell out. It is not clear if the current two main shareholders are selling out or staying, but these shares are going to get even less liquid.

This stock has been off everyone's radars for some time, so I expect the price to firm now as we go forward, and perhaps we will go past 10p by the end of February?

[pugugly] 23/2/2018 13:37

Capitalised interest - Anyone like to do the compound interest on 5%pa over 5 years - ??
"Capitalization is when unpaid interest is added to your loan principal. ... Before your first payment is due, any unpaid interest that has built up is added to the amount you borrowed (capitalized). From that point on, interest accrues on the higher balance so you end up paying interest on interest". Pheonix taking all their "profit" if any in interest - However (imo) stamp collecting except for some HNW "investors" an obsolete hobby. "


Looks as though (imo) nothing left for current PI's - Possibly even more toxic than before (imo)

[pre] 23/2/2018 12:03

Good outcome for SG...hence the share price rise....there is value to be had here, else phoenix wouldn't invest...management done well here under the circumstances imo, ...they'll have cash headroom for investments/acquisitions going forward....dyor etc folks:-)

[sikhthetech] 23/2/2018 11:34

Phoenix have done well here...
This is the best possible outcome for SG to continue trading..

[jim digriz] 23/2/2018 11:17

No, definitely still quite a lot of risk.

But this company should be sortable out if it can stop worrying about the debt and invest properly. We're about to be 58% owned by people who will be very committed to it not going under.

[11_percent] 23/2/2018 10:35

Jim,

So, you think this is the end of the risk (company will now trade at a profit) and the share price will go up medium/long term.

[11_percent] 23/2/2018 09:49

That is going to be one very big overhang of 2.5p shares to sell into the market at 5p.

They have 58% and there is no point in having more than 51%.......that's 7% spare shares.....at least.

[orange1] 23/2/2018 09:47

What's happened to the subscription for new shares at 11.24p?:

"In the recent AGM, a resolution was passed [special business, item 10] allowing up to 25% additional stock to be issued without a general rights issue = 44.5m shares. If £5m is provided via this route, it will equate to a share price of 11.24p each - a premium to the current share price.
Yes, you are all shouting, but why would they pay more than the current market price?
Because once the banking facility is sorted out simultaneously, and the £5m provided, there is no way that the current share price will be just 4p. the 40% shareholders want a return on their investment, this is it, but they equally do not want to particularly dilute their own holdings. Therefore, they provide the bulk of the £5m, existing shareholders do not get a look in, but can't complain as the share price rapidly moves up to 15p - 25p range. And in reality, if a major II wanted to purchase the same amount now, equal to the amount they are providing to the rights, the price would probably not be that far off. It is impossible to get a pricing on the price to buy 25% of SGI, but clearly, you would pay a substantial premium to 4p.
That is what appears to be going on, as bourne out by the Outlook in the recent statement."

[augustusgloop] 23/2/2018 09:26

Clear as mud!

What a complex arrangement.

Who is buying at this price?

Valuing the shares at present is impossible.

Worth more than 2.5p? = probably YES.

Worth more than 5p? = absolutely not.

[bookbroker] 23/2/2018 08:32

What, so you get shares in two listings, Stanley and Gibbons, and a penny for each, should be called the the Two Monkees!

[tsmith2] 23/2/2018 08:30

don't fall for pump. Read the end statement carefully. indebtedness hasn't been reduced at all..it's just been broken up into two tranches...diluted to 2.5p, suspect these will when pen drops shortly

[topvest] 23/2/2018 08:17

Interesting that Phoenix now have a majority holding in Hornby and Stanley Gibbons. I really rate them as a fund management group. Hold Aurora Investment Trust which is managed by them.

[jim digriz] 23/2/2018 08:16

58% dilution. Hmmm. It's worth more now it won't go bust which will assist, but Phoenix UK Fund have done well here. What interest rate will we be paying our new majority shareholder I wonder?