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Something very dodgy going on with this share. SP was down to just below 3 - this was when the very existence of NSF was under threat. Now we are at about 4, when there is no danger of this at all. Something doesn't add up at all.
And the RNS, Alavib, was indeed weird. Seemingly arbitrary raise amount, but mainly why the need to state te amount now if we don't know the redress?
Mariog - your line of thinking is very plausible.
Thanks johnnypc.
What do you think about rising a concern regarding private investments in both Market Maker and company where the MM is managing the share price? I can't see this right as it creates a risk of manipulating the share price
Couldn't agree more Mariog. And that looks very suspiciously apparent here.
The raise just doesn't make sense. I can't get my head round an 80m raise on a current MCAP of 13m. Someone correct me if I'm wrong but that appears to be around an 86% dilution. That is astronomical. I'm hoping someone will correct me. Pre-pandemic we were at around 30p. Dilute that by 86% and the equivalent is 4.2p. Exactly where we are now. But we are lending less, so less profits. Are we actually over-valued?
I'm hoping I've messed up somewhere. Please someone explain why I'm wrong and also explain the justification for such an obscene dilution. My confidence in NSF has evaporated. I've got quite a substantial interest here and my finger is hovering on the sell button before my current state of marginally down gets worse :-(
Please email company to get some clarification about the 80m need. It is impossible that 80m is needed to unlock 200m securisation facility. Do we actually still need it? Another issue, what does it mean "supported by Alchemy" ? What role is Alchemy going to play in the placing?
NSF is very under-valued, do not think it is too expensive. It is a company that is operating in approx 70-80% pre-pandemic.
In last update they said in October there reached the break-even and are profitable.
I will try to dig into the same time investments in the MM and company where MMs are managing the price level.
Well I've emailed them, but expect a standard fudged response.
I asked them once about missing directors buys but heard only that they are in the locked period before the results. Wonder if they will open personal wallets in 2 weeks.
I reckon about half of the £80m raise is necessary to strengthen the balance sheet which has been hit by (1) reduced lending at EL division over the months of lockdown and (2) no new lending in the GL loans division and (3) provision of £16m re. FCA review. We can expect a £20-£25m loss for 2020 when the accounts are published on 30/6.
The other half is about creating the dominant sub-prime lender in the UK, perhaps taking the place of PFG.
Well I got a very quick response, below...
The size of the capital raise is for a number of reasons including the payment of redress due to customers that have suffered harm and also to ensure that the level of gearing is reduced to a sustainable level so that the Group can hopefully diversify its current debt funding and also reduce its cost. You are right we do have substantial cash balances but we also have £330m of debt that will need to be repaid or refinanced at some point over the next two to three years. The capital raise will put the company in a much better position to get that done and at a lower cost.
Alchemy controls 29.95% of the Group’s shares and remains supportive of the capital raise. I am not able to share any more details on the exact shape of the capital raise but, once we conclude the discussions with the FCA we will hope to be in position to set all of this out for shareholders. As to timing, I can only assure you that we are as frustrated as you are over the length of time this is taking and are doing everything we can to reach a conclusion as quickly as possible. The FCA clearly has a lot on its plate and we are unfortunately in their hands on the timing.
Regarding further clarification, I am afraid that there is nothing else we can say at the moment but I can assure you that as soon as there is something to announce, we will do so.
80 million sounds fair. They need to lend money to make money. The question here is.....will they just wipe out existing holders? A huge dilution at 1p per share would do it. They can then do a 100 to 1 consolidation.
But who knows? A 10p placing and all are happy....
Share price needs to be at 10p for that. What will push it up that high?
I think the best we can hope for is a deal that allows PIs to buy new shares at the same price as Alchemy.
I'm not sure whether the company is obliged to do this.
As another poster wrote yesterday, it will be something like Alchemy's complicated deal for Countrywide. But Alchemy are probably in a stronger position here.
Thanks Johnny pc for sharing.
What is weird is an urgency to rise 80m when share price is at historical lows.
As they have 2-3 years to pay back the term loan they could easily wait with the capital rise in 12-18 months from today. They kind of forgot that they make money and they keep repaying the loan instalments on time.
Also as it is still 2-3 years, why not negotiate extension or repay it from the locked unused 200m securisation facility valid to 2026?
So many unanswered questions and no transparency from the company directors.