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Well its not a good look this morning with a further reduction in the SP so far today the money men clearly do not believe John. Very sad.
PS No listing for IM this morning.
I think we have to accept that there is a material risk the financing don’t come off and that is being priced in. What will happen to Harl if it is rejected?
If HARL gets bailed out by the government the only one really getting bailed out are the two billionaire founders of Riverstone. One of them put his NY house on the market last year for $72.5m. That would make good headline that the gov are giving these guys free money. https://www.curbed.com/2023/05/gilded-age-mansion-973-fifth-avenue-for-sale.html
I don't think for one minute the UK public want to see the NHS deprived of funding to bail out US billionaires.
Before you all tell me that the gov is only backing loans and not risking any money that's obviously not true. The cost of debt for HARL should they be able to get it would be far far higher without government support because the company's balance sheet is so weak. Backing a 200m loan would be extremely risky. For this reason unless HMG and its advisors at UKEF have gone soft they won't back the loan.
There was a tongue in cheek post over the weekend regarding JW posting on the Scilly Isles Facebook page whilst eating his cornflakes - We have known for many years he is a 'cereal liar'. The RNLI will vouch for that.
Hebredian9. Does anybody care what the illegal migrant taxi service thinks?
The UK government are not handing anyone money. Yes they are risking it, that's what a loan guarantee is. But to claim the UK government are "bailing out" or handing over money to anyone is a downright lie.
If that were the case Xenor then the UK Gov might as well just back every small company in the UK with cheap loans. Why not? It woud be a huge boost. The obvious reason is that in a very large number of cases the tax payer would not be repaid and the endeavour woud be hugely loss making and hit public services badly.
Since Riverstone have senior secured debt any new cash made available to HARL by a Gov back loan will immediately cause them to be repaid and bailed out. In effect Riverstone would directly benefit from UK tax payer back loans. If that happens there quite rightly woud and should be a massive backlash in parliament.
" Backing a 200m loan would be extremely risky "
Right now, the risks are actually at their lowest, not highest
why? ... because the company has now invested in the infrastructure, the equipment and the training of labour and is therefore at its strongest position in terms of having the capabilities to win bigger and more valued contracts, as well as serve its existing ones.
It is also seeing on the horizon a level of revenue and margin from these existing contracts
Part of the reason the balance sheet is weak, is because of the expensive investment, from which its potential has yet to be realised
but, if you don not invest then you might as well not bother ....and just leave everything to the foreigners and import it all
Right now is the time to get a grip and look forward and not back .....
The consortium of banks is probably already lined up and ready to go. They will charge a Premium rate above SONIA for the 100% loan level , and have the Rights to most of the Assets should anything go wrong ....
but... the £200m is going to give them a good level of working capital and cash flow cushioning that will strengthen their tender position and allow them to pay working costs for the foreseeable
It is now or never to back a big ambitious vision..... if the US can do it and have shown it is possible for the last 200 years then it is about time the UK learned to as well
Shareholders are of course at the bottom of the food chain behind the lenders but the loan would put an end to share issue and provide the foundation for the strong future level of revenue and earnings
Xenor, if only your waffle was backed up by the numbers in the accounts. There is massive net negative tangible assets, an eyewatering payroll to fund, huge losses last year and this year, no significant capex spend has happened as you suggest.
The banks cannot subordinate Riverstone without their permission and why would Riverstone allow that when they want their money back first? The banks would if they allowed the loan and could subordinate Riverstone have call on the assets but the assets are not worth very little.
At the half year to 30 June 2023 (latest accounts). Property plant and equipment on the balance sheet was £26,670,074. As a reminder they own Riverstone c$115m.
Think you’re missing the point. The government guarantee is so that we can get a loan from a high street bank, not a special situations credit lender.
Riverstone charges 15%, we want a loan at 7%
Timkempster...no capex??? Have you been asleep for the last 5 years? The facilities have been revamped, significantly in the case of Appledore and Belfast with around £100m still being spent on Belfast and new state of the art machinery. Please, stop looking back and look forward.
If CAPEX had been spent it would be on the balance sheet. You can't invest in property plant and equipment to the tune of £100m as you suggest and not see it in the accounts which show that at £26.6m. Are you suggesting the accounts are wrong?
"At the half year to 30 June 2023 (latest accounts). Property plant and equipment on the balance sheet was £26,670,074. As a reminder they own Riverstone c$115m."
That was then. Stop looking at June 2023. It's nearly June 2024. By the way, we won the world cup in 1966...does that mean we are still the best football team in the world?
Timkempster,
The PPE book figures have barely changed in 3 years, and they do not re-value the Property as a result of the equipment and infrastructure spent on it ... so I would suggest the Property values on the books are somewhat being undervalued
I accept that the accounting date is quite hold but due to HARL not providing an update it's the best we have. However, we know very little has been spent since on CAPEX because there has been no cash to spend. The broker forecasts for 2024 and 2023 were losses and there were no other sources of cash going into the company. The debt with Riverstone has been maxed out for some time now, the company has been loss making and they have not raised any equity or sold any assets.
Therefore you statement that they've spent a huge amount upgrading assets is clearly just wrong.
You have to stop listening to the crap JW tells you and look at the accounts. They can't have generated cash from contracts because their own broker has told us they've been loss making. They can't have generated from selling assets because they have not sold any, they can't have generated it from selling shares because they haven't issued any and the debt situation has only got worse due to PIK interest so no cash from issuing debt either.
So where has all this investment in CAPEX come from? I think what you are assuming is the what HARL wanted to spend on its facilities should it had raised the £200m which it's been trying to raise for 18months+ now.
" Therefore you statement that they've spent a huge amount upgrading assets is clearly just wrong. "
He is referring to the next stage upgrade and extension to the Belfast facilities when he says " still being spent on Belfast " which would then create the most modern and sophisticated yard in the UK.
Timmy We already have Heb onboard to tell us all about Riverstone! Don't think we need a mk2 coming out of the woodwork at this stage. whats your agenda if we didn't really know lol
For those unaware, Tim Kempster writes for the shorting blog that has wrote several negative articles about HARL since the FSS contract was awarded.
Usually he posts on ADVFN, but that board is dead these days. These arguments he is pitching have been done to death on there, over the past year. He refuses to listen to any points that don't agree with his.
He completely ignores the 77m recapitalisation plan that was awarded alongside the FSS contract, because it wasn't on the accounts at that point and that's convenient. His argument is always "look at the accounts" because we all know they weren't good reading. Anything beyond early 2023 is conveniently ignored.
He also frequently states that a loan guarantee is bailing out Riverstone at tax payers expense. He isn't stupid, he knows the money is coming from the banks rather than the tax payer but facts don't matter when you want to sow doubt.
I'm done, saying no more on the matter as he will not stop or change his viewpoints until finance is signed.