Listen to our latest Investing Matters Podcast episode 'Uncovering opportunities with investment trusts' with The AIC's Richard Stone here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
The lender does not own the asset - they have claim against it for the value of the loan. The shares are not worthless as the Company has a balance sheet value net of liabilities and can be sold in the future as going concern which will increase as the Company gradually gets its operational activities sorted - which it is gradually doing. The only worthless thing is your opinions. you should be fine under the trade description act for calling yourself `Smart Punter`.
. You can check in Companies House, charges are recorded there.
https://find-and-update.company-information.service.gov.uk/company/05101822/charges
As you can Newgen have fixed, floating charges over all property of the company
Looking at the contract (pretty standard), default on the loan and everything is taken over by Newgen.
Until the loan and all interest accrued is paid in full the assets are complely under control of the lender.
Hence the suspension.
Just wanted to weigh in on one point. Someone mentioned that on event of default everything passes over to the lender. This is not true.
Firstly, there is a difference between an event of default and the lender calling in the loan under their rights detailed in the loan. In effect, due to the default they would be able to demand repayment, enforcing their security to the amount of the capital amount of the loan, accrued interest & associated costs. The issue here, I would imagine a large portion of their security would come from the value of the Ming Mine based on its reserves. I do not anticipate there is sufficient realisable assets to repay the debt.
The fact they have not done so is likely due to them realising having an operating mining company is potentially more valuable to them at this moment than trying to achieve a fire sale of a distressed asset or because discussions are positive towards a solution. I anticipate them coming to an one year interest only extension, I see the forward selling / hedging of copper being part of their negotiations to sure up cashflow and I anticipate they too are waiting for the full cost cutting measures, financial reports and strategy to assess their lending position before deciding to extend the loan or foreclose.
There is no passing of control to the lender, they are not miner, they simply are able to demand funds under their agreement… the issue for the investor if this is not repaid out of readily realisable assets which do not impact operations (which let’s be honest…. This is unlikely) they will take this chunk out of the mine (which they can’t) or RMM will have to raise from another lender or equity.
The voice of reason
I'm still not sure if SmartPunter is a troll account. The irony is just too tasty.
Fellow Ramblers - the equity is gone - whatever happens the debt needs to be restructured and in these situations the equity gets wiped out - and then reset by the new money that comes in - they dont give the old shareholders a free ride i am afraid - so yes the mining assets may re-emerge but under a wholly different debt structure and so the equity that we have is toilet paper - the business may survive but we will lose 95% or more of our equity as the capital is restructured, and converted. Please understand that you / we have lost our money. Sorry - thanks Blue
>>Someone mentioned that on event of default everything passes over to the lender. This is not true.
Mates rates. Read the contract A default event has been raised (reported in the RNS). Title is now under control of the lender until 100% of all debt interest and fees are repaid. Lender has power of attorney and appointment of administrator is optional.
RMM is effectively under administration, Google what this means and how it operates in practice.
Blue post on 27/9.....
"Yes me too - bought in at 35p and just sold at 4.8 pence - lost £4000 recovered £500.
Boo Hoo.
Thanks Blue".
So whatever happens here, and as said many times. Awaiting the deal/no deal RNS to land in 2023.
Like a few others, from his own words this poster is no longer a "fellow Rambler" anymore. So why 3 months on is he returning again to advise that our games up ..... Emmmm I wonder?
Once again. Am waiting for next year's official Comms. Till then it's FUDster city clearly. Yawn.
You do realise that FUD, de/ramping don't apply to suspended shares?