Zenith Energy Share Discussion Threads

[duncandisorderly] 26/6/2012 13:57

A good summing up John.Let's hope that Cleaver's new business venture is better than the last.

[john of groats] 26/6/2012 13:40

I have read the circular on the website and there are a few significant details that were not in previous announcements.



The GM to approve the proposed sale of Zenergy Power Pty Ltd and the proposed adoption of an Investing Policy is to be held at offices of Lawrence Graham LLP, 4 More London Riverside, SE1 2AU, London, at 2.00 p.m. on 16 July 2012.

There is also a form of proxy on the website for those shareholders not able to attend.

The total proceeds consist of:
$400,000 (about £505,000) from the sale of the assets of Zenergy Power Inc,
£90,000 on demonstrating that the 11kV FCL delivered to ASL is fully operational and
£1 for the shares of Zenergy Power Pty Ltd.

The Investment Policy is to use the cash balance, including the proceeds, to fund an acquisition or acquisitions. "The Board have been considering a number of alternative futures for Zenergy and would expect to make further announcements on that before the end of the summer."

This is probably my last post on this board as I doubt that whatever they propose to invest in will fit my investment criteria. As I said before, I sold the last of my shares in January.

I cannot see that voting against the resolutions is an attractive option as there is a reasonable chance that the mFCL business will not become profitable before current funds run out. I would expect Simon Cleaver to offer his resignation if the resolutions were lost and I cannot see a queue of applicants with his level of experience lining up for the job.

Closing the business and returning any cash is not a very attractive option as there could be much less than £4m left after making the staff redundant and buying out any warranties on the FCLs already supplied. A distressed sale of assets is unlikely to fetch what ASL are willing to pay and the royalties on future sales of 2G HTS wire and mFCLs would be lost.

It is very sad to see our hopes destroyed but I think Cleaver's comment about the old Board running a superconductivity university sums up what went wrong. They made some very interesting inventions at our expense but were hopeless at finding an application for them that would repay the investment.

I think we (and that includes investors such as Cleaver) were dazzled by the possibilities. What we could not know was how reluctant potential customers would be to part with cash. Some of that can be attributed to the credit crisis which started about five years ago but I think we did not understand how customers would compare the benefits and costs of ZEN's products against existing solutions. Obviously, they did not find a compelling case to do more than play with them.

John

P.S. Carlsberg didn't say they made the best lager in the world. "Probably" was the key word.

P.P.S. It's "could have" or "could've", not "could of". "Of" is a preposition, not a verb.

[bobby.ifa] 26/6/2012 10:09

I think they call it marketing. Turn on your tv & watch the ads. Is Carlsberg the best lager in the world? No, its not.

[duncandisorderly] 26/6/2012 09:57

There are litteraly hundreds of large compannies that could of snapped up this company for 20 milion which to them would of been loose change.
Cleaver has been a huge dissapointment for me and without a shadow of doubt was the WRONG man for the job.]

[peterblok] 26/6/2012 09:41

I followed the links on the company website for "further information on the GM" and got no where. Seems they couldn't even get this right!

[john of groats] 23/6/2012 14:22

PJ,

I had been wondering whether to say anything about royalties on 2G HTS wire but you beat me to it. How do you know the 2G HTS wire is soon to come into production based on the ZEN continuous chemical process? Can you name the company that acquired the technology? ZEN has not revealed who it is. The only clue is that it is a "major industrial corporation".

On 26th July 2011, it said that it had received a grant "to assist with further improvements to the wire and the development of online monitoring, standardisation and quality control techniques which will be required when moving towards mass manufacturing. The total costs of this funded project are estimated at €6.0 million and will take up to 3 years to complete." Note that this does not include the time and costs to set up a production line before we see any royalty payments.

On 6th January, 2012, it said that, "the Company will also receive a royalty on all sales of 2G wire for the next 10 years if the major industrial corporation that has acquired the technology are successful in completing the development and commercialising the Zenergy Power GmbH 2G wire program."

By the nature of the beast, the costs and timescales of research and development projects tend to be underestimated. The upheavals caused by putting the German subsidiary into administration and subsequently transferring the project to another company are likely to have extended the estimated 3 years to completion. Note that the final statement gives no certainty that there will be any royalties or when they may start but I would be surprised to see anything before 2015.

John

[stegrego] 22/6/2012 13:06

Best hope you have here is that someone buys the company & listing and reverses something into it.

Management here are apparently looking at turning ZEN into a company that organises parties at breweries.....

Some may say that isnt a change of business direction at all, although previous attempts were clearly a failure.

[duncandisorderly] 22/6/2012 10:25

Ahhhhhhhh! thanks mate.

[pjj71] 22/6/2012 10:04

duncan, there is a short base of 3.8m on this stock, primarily cfds.. they are clearly cacking themselves and taking out the bid to get the price lower..

[duncandisorderly] 22/6/2012 09:34

Pj,you spoke too soon mate.Quite amazing really as the shares are worth 5.8p cash after costs and yet some are selling at 3.5.The only thing I can assume is they are forced sellers who either need the cash or did a few T10'S before the build up.It's only pennies anyway 65,000=£2,275

[pjj71] 22/6/2012 09:04

also we have the revenue stream from the Superconductor Wire licence (announced last October) for 10 years, which will soon comeinto production, a small loyatly payment for mFCLs, and lets not forget yesterdays RNS said only 'certain assets' were included in the sale, oh and 4m in cash! No wonder nobody is selling!!!

[looky] 22/6/2012 00:12

This is surely a no brainer. Cash is very hard to raise at the moment for IPOs and secondary issues so we should be able to negotiate a decent deal with any company wanting to reverse into Zen or any quoted company wishing to takeout Zen for the cash (ie a quasi rights issue). That is without taking into account the tax losses which must have some value.

The key to any reverse is not the price at which the deal is done at but the value of the company coming in. 3 months ago a company reversing would have been valued at a far higher level than it is today so the percentage of the enlarged company attributable to existing Zen shareholders is much higher.

[john of groats] 21/6/2012 17:03

duncan,

You must have read my reply to that iii post:

"I think you have miscalculated current market cap. The issued share capital is 69,059,368 shares. At the current share price of 4p that values ZEN at £2.8m. Apart from £4m in cash, what other assets are there after the disposal of the Amerian and Australian companies?

"You say there is no sale of IP yet today's Strategic Update specifically states that the Group's IP is owned by the Australian company. All we will be left with is the right to a 3% royalty on sales of FCLs by Applied Semiconductor for the next 6 years.

"Before you make any estimates of what those sales may be worth, I suggest you look at the Applied Semiconductor website and, in particular, the video of Vince Cable's visit:



"It is a small company based in Blyth. It installed a Nexans 11kV FCL for Electricity North West in 2009 and another for Scottish Power in 2011. These are essentially trials of the technology.

"It has just installed a Zenergy 11kV FCL for Northern Powergrid and is due to install a Zenergy 33kV FCL for them by the end of this year. This appears to be the first repeat order and proves that the thing works!

"They are backed by four investment companies so funding may not be a problem for some time. The money they are offering for ZEN's assets is small beer. However, if they are to grow fast, they will need considerably more funds. They have been more successful than ZEN at finding customers for FCLs but will Nexans be happy to leave the market to such a minnow?

"I disposed of my shares in ZEN some months ago but I cannot say I am inclined to reinvest."

John

[duncandisorderly] 21/6/2012 09:59

Come on Siemens,,yours for 3 million plus cash.Cheap at half the price.

[joeblogg2] 21/6/2012 09:38

I suppose this was the next best thing if he couldn't get sales. ASL hopefully has more cloat to get these sales. Lets see what new business ideas they have otherwise I would rather have cash returned but would mean most of us will still be well out of pocket :((

[giant steps] 21/6/2012 09:05

Reminder Simon Cleaver Appointed 12th April 2011

Remuneration ending 31st Dec 2011 £119K (for 9 months work)

Shareholding 1,342,120 @ 3.25p worth £43.6K

[duncandisorderly] 21/6/2012 08:51

Posted on iii and sums it up really.
What some of you are not getting is...

Cash = to more than 2 times current market cap.
No liabilities going forward for mcfl.
3% royalties on what we have all been championing as a Multi Billion $ product.
Ongoing talks (Meaningful) about funding and backing for new direction.
Asset sale... No IP sale...

Are you getting it yet?

Simon Cleaver, who has more than most here to lose and has an average of many many many times today price is manouvering us clearly to a position where we can hopefully remain bulletproof against economic turmoil, yet still benefit from the investments made in the IP of the sale.

Whats safer than £4 Million cash... "Post" sale.... Get that as well... Post, after fees and up to date valuation..

[duncandisorderly] 21/6/2012 08:15

4 million works out about 5.8p per share I think,plus royalties.All we need now is a counter offer from Siemens,lol.