Thalassa Share Discussion Threads

[rcturner2] 07/10/2014 08:24

caradog - the trust essentially replaces options for the directors and other staff. It is not in any way of benefit to the shareholders, but likewise should not have any negative effect on the shareholders either.

[caradog] 07/10/2014 08:16

Of course, if the share price rises, the trust can repay out of its own resources and the company gets its money back with 3% interest. But wouldn't buying the company premises give a better and less risky return for shareholders? It would seem that shareholders are shouldering all the risk here.

[caradog] 07/10/2014 08:08

The trust has no income , does it? If not, It can only pay back the money by selling shares. If the share price drops, it can only pay by being granted shares at below market price and selling them on the market.

Isn't that a bit like a motor dealer lending money to staff to buy new cars. The only way they can pay the loan back after a year is to sell the car. But the value has dropped so the company writes off the debt. The only way the company can avoid this is if it allows employees to buy cars at below market value. Either way the employees win and the company loses.

[rcturner2] 07/10/2014 07:44

As long as the trust can cover the loans!

[stemis] 07/10/2014 07:41

Sigala,

Yes, the company confirmed the position for me although the information is in the public domain. The alternative would have been to issue a bunch of options which would have lead to further dilution. People moan about Soukup selling to the Trust but it was done at market price which any of the complainants could have taken. It's probably unlikely the Trust would have been able to buy that quantity in the market anyway. If anyone has lost out by the price it is the beneficiaries of the Trust.

[caradog] 07/10/2014 07:36

So the company has lent money to the discretionary trust at 3% so that it can buy shares off the chairman at market price and shares off the company for a tenth of the market price. The trust is for the benefit of managers and employees and the chairman sits on the board of the trust, I believe. Correct me if I'm wrong, but this leaves the chairman with effective control of the same number of votes having realised cash from his shareholding. With the cash he buys the property from which he has decided the company is going to operate. And the yield on this investment is, well a lot more than 3%.

But I am not an investment expert and I could have got it all wrong. And, of course, We can rely on the non-execs to look after shareholders' interests.

[bootie64] 07/10/2014 06:58

Sigala
from the RNS Jan 2014
To finance these purchases by the THAL Discretionary Trust, the Company has agreed to provide a loan of GBP3,054,768 to the THAL Discretionary Trust. The loan, which has been granted for a term of up to 36 months, bears interest annually at Base Rate plus 3 per cent.

[pj 1] 07/10/2014 06:54

ItchyCrack
6 Oct'14 - 23:03 - 2887 of 2889 0 0


Tesco bought 4 company jets! I didn't read about shareholder outcry over that! Its quite clear many of you live in your isolated little bubbles and have no comprehension of how the wider business world functions! You should sell up and stick the money in a bank account as investing here is clearly way above your level of intellegence! Some of the posts are just unbelievable!
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So TSCO share price is going up is it? There is your shareholder outcry.

[sigala] 06/10/2014 22:58

Itchy,

maybe its just a wariness of AIM and some of the goings on I've witnessed and occasionally suffered. I think a cautious attitude is helpful where AIM is concerned.

But I agree, market cap and blue chip status are no guarantee against embezzlement, in some cases the frauds are just more sophisticated.

Regards

[sigala] 06/10/2014 22:49

SteMIS,

Thanks for the clarification. Sounds like you got that from the horses mouth.

Its not an arrangement I've come across before, I guess it makes some kind of sense to me, but I wonder whether such a large cash outflow at a time of fast growth in the company is what I would have done.

With their placings they do seem to have sufficient cash for the foreseeable I guess, although how much investment will be needed in Autonomous Robotics before it is market ready is a big unknown.

Regards

[itchycrack] 06/10/2014 22:03

Tesco bought 4 company jets! I didn't read about shareholder outcry over that! Its quite clear many of you live in your isolated little bubbles and have no comprehension of how the wider business world functions! You should sell up and stick the money in a bank account as investing here is clearly way above your level of intellegence! Some of the posts are just unbelievable!

[stemis] 06/10/2014 22:00

The THAL discretionary trust will pay back the loan when the shares it holds are sold. The loan is due for repayment in Jan 2017.

[sigala] 06/10/2014 21:25

Have re-read the various interim and final results documents for this company again, and still come away with the impression that DS actions over the years are not those of a swindler.

On many occasions he has waived his fees, or taken them as shares at the market rate thereby increasing his personal wealth exposure to the fortunes of his company.

I have never met the man, and so my view is only based on the information available in the public domain.

Having said that, I personally would like more clarity on things like the THAL discretionary trust and when it will pay back the approximately $7.3m it has borrowed from the company.

Such an arrangement is too fast and loose for my liking even if done with the best of intentions. I think it forces shareholders into the onerous position of having to make a vital judgement call on the personal integrity of the Directors. The arrangement seems highly unorthodox to me, and many investors will understandably err on the side of caution and give such practices a wide berth due to lack of transparency.

JMHO, NAI

[stemis] 06/10/2014 20:59

I've found the company quite happy to answer questions (which they did on the accounting for the loan to the Trust Fund) but it depends on what you ask them. Some small PIs with a few thousand quids worth of shares think management should debate with them how to run the business or provide them with inside information. It's not going to happen.

I know from experience that £12 a sq ft isn't really that expensive for good quality office space in the regions. Certainly cheaper than a prestige office in London! Some might prefer THAL to save £20/30k by working from some grubby little shed but, if they are planning to expand and want to attract decent staff and project an image to their multi national clients of a quality/solid contractor, I'd suggest that's not the way to do it. This is a company with a NAV of $50m. Let's take the numbers in some sort of context. The price Soukup paid is actually probably more of an indication of the depressed capital value. Personally I'd rather that the company had had the benefit of that but maybe there's reasons they didn't want to tie £1.2m up in capital.

[rp19] 06/10/2014 15:28

FWIW some English Partnerships data that I've used previously suggests as a general figure 1 employee per 19 sq m for a typical office (which this may, or may not be). 10,000 sq ft is circa 930 sq m, so 930 / 19 = circa 50 employees.

[rcturner2] 06/10/2014 14:59

For example, 200 sq ft is roughly 20 sq m which is 4m by 5m. I currently sit in a room that size and would not want to share it with 2 others! You have to add in meeting rooms and storage as well.

[rcturner2] 06/10/2014 14:56

Normally you would go with 200 sq ft per person so 10,000 would house 50?

150 would never fit in such an area.

[itchycrack] 06/10/2014 14:33

That's why you don't learn anything muppet!

[propercharlie] 06/10/2014 14:30

FWIW I have both RCT and Itchycrack on filter. I know from past exposure to both it is not worth my while reading their posts.

[rcturner2] 06/10/2014 14:17

Erm, there is a massive difference between unit reparations and a refurbishment! After most leases 7/10/14 years offices need a total refurb because technology and tastes have changed so much. A tenant does not have to modernise the offices.

[pj 1] 06/10/2014 14:11

RCTurner2
6 Oct'14 - 14:56 - 2874 of 2874 0 0


Normally the landlord would be expected to make good the premises and this again may help to explain the price/yield disparity if that purchase price is discounting the cost of the refurb.
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Sorry- Totally incorrect. It is usual for the tenant to return the Unit to pre lease condition. Unit reparations

Otherwise most landlords would be seriously out of pocket

[rcturner2] 06/10/2014 13:56

Normally the landlord would be expected to make good the premises and this again may help to explain the price/yield disparity if that purchase price is discounting the cost of the refurb.

[sailing john] 06/10/2014 13:52

Agreed but Thalassa are cash rich at present and property assets can be used as security for a loan probably at a lower rate than 10% (and similarly tax deductable) . And there would always be the option of a sale and lease back at a future point in time if cash was needed.

I just think it was a mistake especially given the need for refurb and general maintenance expenses which might be payable by either lessor or lessee (we don't know) over the next 10 years.