Taking Stock on 26/06/23: Hold your nerve, Cineworld restructuring the sequel plus #PREM, #DVRG & #GGP
Episode 1500, Jun 26, 2023, 09:53 AM
WELCOME TO TAKING STOCK, IT'S A ROUND UP OF TODAY'S BUSINESS NEWS & INVESTMENT VIEWS.
INDICES
FTSE 100 7,425 -0.5% (down 6 days in a row)
12 MONTH HIGH: 8,014 - 16/02/2023
12 MONTH LOW: 6,826 - 13/10/2022
FTSE 250
FTSE 250 17,966 -0.54%
12 MONTH HIGH: 20,614 - 01/02/23
12 MONTH LOW: 16,611 - 12/10/2022
FTSE AIM All-Share 764 -0.37%
LAST TIME IT WAS THIS LEVEL WAS 22ND APRIL 2020
12 MONTH HIGH: 934 - 15/08/2022
12 MONTH LOW: 764 - 26/06/2023
3 Top Business Stories
1. The UK Prime Minister has urged homeowners and borrowers to "hold their nerve" over rising interest rates aimed at bringing down stubborn inflation.
Rishi Sunak told Sunday with Laura Kuenssberg: "I want people to be reassured that we've got to hold our nerve, stick to the plan and we will get through this."
This week the Bank of England raised interest rates to a 15-year high of 5%.
(Click here to read more)
2. Struggling cinema chain Cineworld has said its screens will remain open despite the company planning to file for administration in the UK.
The move is part of a restructuring plan for the world's second-largest cinema chain that will see its shares being suspended.
The company filed for bankruptcy protection in the US last year as it struggled with debts of $5bn.
But the firm said it was still business as usual for its cinemas.
(Click here to read more)
3. The prospect of a new battery factory in Northumberland has suffered a setback after the buyer of Britishvolt was raided by Australian police.
Investigators went to the offices of Scale Facilitation and SaniteX, owned by Australian entrepreneur David Collard over alleged tax fraud.
Recharge Industries, a subsidiary of Scale Facilitation, bought Britishvolt this year after it collapsed.
(Click here to read more)
1. The UK Prime Minister has urged homeowners and borrowers to "hold their nerve" over rising interest rates aimed at bringing down stubborn inflation.
Rishi Sunak told Sunday with Laura Kuenssberg: "I want people to be reassured that we've got to hold our nerve, stick to the plan and we will get through this."
This week the Bank of England raised interest rates to a 15-year high of 5%.
(Click here to read more)
2. Struggling cinema chain Cineworld has said its screens will remain open despite the company planning to file for administration in the UK.
The move is part of a restructuring plan for the world's second-largest cinema chain that will see its shares being suspended.
The company filed for bankruptcy protection in the US last year as it struggled with debts of $5bn.
But the firm said it was still business as usual for its cinemas.
(Click here to read more)
3. The prospect of a new battery factory in Northumberland has suffered a setback after the buyer of Britishvolt was raided by Australian police.
Investigators went to the offices of Scale Facilitation and SaniteX, owned by Australian entrepreneur David Collard over alleged tax fraud.
Recharge Industries, a subsidiary of Scale Facilitation, bought Britishvolt this year after it collapsed.
(Click here to read more)
WINNERS & LOSERS
WINNERS
1. Wildcat Petroleum #WCAT - MOU signed re Funding
Wildcat has entered into a Memorandum of Understanding (MOU) with a third party that has expressed an interest to carry out due diligence on deals that Wildcat can source from Sudan. This third party will then decide whether or not to invest directly into a deal up to an amount of US$25 million.
2. IOG PLC #IOG - Successful Blythe H2 Intervention
Rupert Newall, CEO, commented:
"We have successfully completed the wireline intervention at Blythe H2 well, which has now flowed at a maximum stabilised rate around 42 mmscf/d, slightly above our original 30-40 mmscf/d guidance.
Production will now be managed up from 20 mmscf/d towards the maximum rate to further dewater the pipeline. The team has worked very well to identify the issue and remediate it safely and efficiently. The significant improvement in our operating team performance is also demonstrated by Blythe operating efficiency increasing from 59% in 2022 to 93% over 1H23 to date.
3. Aston Martin Lagonda #AML - Aston Martin Lagonda and Lucid Group, Inc. to enter in to strategic supply agreement to create industry-leading ultra-luxury high performance electric vehicles
Under the terms of the proposed agreement, Aston Martin would issue 28,352,273 new ordinary shares to Lucid and make phased cash payments to Lucid, with the aggregate value of shares issued and cash payments totalling approximately $232m (£182m)
Lucid Group would become a c. 3.7% shareholder in Aston Martin Lagonda Global Holdings plc
LOSERS
1. Microsaic Systems #MSYS - DeepVerge: debtor update
As announced on 18 April 2023, approximately £1.4 million of overdue trade receivables were owed by DeepVerge to the Company on that date. Following further receipt of payments and Microsaic equipment from DeepVerge, this amount has further reduced to approximately £1.35 million as at 31 May 2023.
The Directors believe that, after a slower start to the year, the Company's growth plans and sales pipeline prospects offer a cautiously optimistic outlook.
In the event of no further reduction in the debtor balance owed to the Company by Deepverge, which seems likely given their announcement made today, Microsaic will need to raise further working capital during Q3, 2023.
2. Premier African Minerals #PREM - Offtake and Prepayment Agreement Update
Premier African Minerals provides a further update on the progress of the revision of the Offtake and Prepayment Agreement entered into between Premier and Canmax Technologies.
Whilst Canmax and Premier continue to engage no amendment has been signed to date, nor will an amendment containing certain of the terms now currently proposed by Canmax, be acceptable to Premier.
And a formal state of Force Majeure is now in effect.
(Click here to read the RNS)
3. Cineworld Group #CINE - Chapter 11 Update
The Proposed Restructuring, will involve the release of approximately $4.53 billion of the Group's funded indebtedness, the execution of a rights offering to raise gross proceeds of $800 million and the provision of $1.46 billion in new debt financing.
Given the level of existing debt that is expected to be released under the Plan, the Proposed Restructuring does not provide for any recovery for holders of Cineworld's existing equity interests.
Most Read RNS's
1. Premier African Minerals #PREM - Offtake and Prepayment Agreement Update
2. Deepverge #DVRG - Sale or closure of subsidiaries; share suspension
The Company has been seeking to sell one or more of the principal business units with the aim of raising sufficient funds to enable the remainder of the Group to continue to trade.
Despite receiving indicative offers for both the Labskin (including Skin Trust Club and Rinocloud) and Modern Water businesses, in the Board's opinion none of these offers appears likely to reach a successful conclusion on a timely basis.
The Board's current expectation is that this process will result in the sale, closure or administration of all Group subsidiaries.
3. Greatland Gold #GGP - Drilling commences at Paterson South Project
§ Drilling has commenced at the Stingray target which is an underexplored magnetic anomaly within the Budjidowns tenement
§ Drilling will commence shortly at the Decka target which is a combined magnetic and conductive anomaly within Proterozoic sediments, similar to Havieron
§ Both targets are modelled within 250m of surface, making them shallower than Havieron
WINNERS
1. Wildcat Petroleum #WCAT - MOU signed re Funding
Wildcat has entered into a Memorandum of Understanding (MOU) with a third party that has expressed an interest to carry out due diligence on deals that Wildcat can source from Sudan. This third party will then decide whether or not to invest directly into a deal up to an amount of US$25 million.
2. IOG PLC #IOG - Successful Blythe H2 Intervention
Rupert Newall, CEO, commented:
"We have successfully completed the wireline intervention at Blythe H2 well, which has now flowed at a maximum stabilised rate around 42 mmscf/d, slightly above our original 30-40 mmscf/d guidance.
Production will now be managed up from 20 mmscf/d towards the maximum rate to further dewater the pipeline. The team has worked very well to identify the issue and remediate it safely and efficiently. The significant improvement in our operating team performance is also demonstrated by Blythe operating efficiency increasing from 59% in 2022 to 93% over 1H23 to date.
3. Aston Martin Lagonda #AML - Aston Martin Lagonda and Lucid Group, Inc. to enter in to strategic supply agreement to create industry-leading ultra-luxury high performance electric vehicles
Under the terms of the proposed agreement, Aston Martin would issue 28,352,273 new ordinary shares to Lucid and make phased cash payments to Lucid, with the aggregate value of shares issued and cash payments totalling approximately $232m (£182m)
Lucid Group would become a c. 3.7% shareholder in Aston Martin Lagonda Global Holdings plc
LOSERS
1. Microsaic Systems #MSYS - DeepVerge: debtor update
As announced on 18 April 2023, approximately £1.4 million of overdue trade receivables were owed by DeepVerge to the Company on that date. Following further receipt of payments and Microsaic equipment from DeepVerge, this amount has further reduced to approximately £1.35 million as at 31 May 2023.
The Directors believe that, after a slower start to the year, the Company's growth plans and sales pipeline prospects offer a cautiously optimistic outlook.
In the event of no further reduction in the debtor balance owed to the Company by Deepverge, which seems likely given their announcement made today, Microsaic will need to raise further working capital during Q3, 2023.
2. Premier African Minerals #PREM - Offtake and Prepayment Agreement Update
Premier African Minerals provides a further update on the progress of the revision of the Offtake and Prepayment Agreement entered into between Premier and Canmax Technologies.
Whilst Canmax and Premier continue to engage no amendment has been signed to date, nor will an amendment containing certain of the terms now currently proposed by Canmax, be acceptable to Premier.
And a formal state of Force Majeure is now in effect.
(Click here to read the RNS)
3. Cineworld Group #CINE - Chapter 11 Update
The Proposed Restructuring, will involve the release of approximately $4.53 billion of the Group's funded indebtedness, the execution of a rights offering to raise gross proceeds of $800 million and the provision of $1.46 billion in new debt financing.
Given the level of existing debt that is expected to be released under the Plan, the Proposed Restructuring does not provide for any recovery for holders of Cineworld's existing equity interests.
Most Read RNS's
1. Premier African Minerals #PREM - Offtake and Prepayment Agreement Update
2. Deepverge #DVRG - Sale or closure of subsidiaries; share suspension
The Company has been seeking to sell one or more of the principal business units with the aim of raising sufficient funds to enable the remainder of the Group to continue to trade.
Despite receiving indicative offers for both the Labskin (including Skin Trust Club and Rinocloud) and Modern Water businesses, in the Board's opinion none of these offers appears likely to reach a successful conclusion on a timely basis.
The Board's current expectation is that this process will result in the sale, closure or administration of all Group subsidiaries.
3. Greatland Gold #GGP - Drilling commences at Paterson South Project
§ Drilling has commenced at the Stingray target which is an underexplored magnetic anomaly within the Budjidowns tenement
§ Drilling will commence shortly at the Decka target which is a combined magnetic and conductive anomaly within Proterozoic sediments, similar to Havieron
§ Both targets are modelled within 250m of surface, making them shallower than Havieron