Thursday 7 November 2013

Oxus Plc - why this EFF & International Arbitration Coverage

It’s interesting that a number of parties have been utilising the opportunity to acquire further stock over the longer term in Oxus Plc. I don't know who Mr A F Gibbons is nor is it fair that people suggest or pry into his life in an attempt to find the individual. I wish him the best of health etc...He’s working to the same accord as other shareholders in acquiring.

There would have been a significant increase in the SP if it was not for the Darwin Equity Finance Facility (EFF Agreed on the 13 March 2013). It raises a question of why Oxus uses the EFF. It contradicts all of their efforts in securing and using the Third Party Funding from Calunius Capital (01 March 2012) but significantly dilutes the settlement (to a degree) and negatively impacts on any share price appreciation with an almost permanent short on the stock. Something I'm not innocent of myself however this is purely because of the EFF and protecting my position.

Perhaps the company should agree with shareholders on the register if they wish to participate in a) one off placing or b) regularly placing with a tie-in agreement till after the arbitration or April 2014 whichever happens sooner? Total shares in Oxus now stand at 470,675,089 as of today. Another option would be to sell some litigation type bonds at a premium solely secured against any such award. Total shares in Oxus now stand at 470,675,089 as of today, with by my estimated a likely 60M ish further shares to be issues. 

Churchill is clearly temperamental because of the known reasons; however I would not want to be trading purely on a technical analysis as the ratio of risk to reward clearly overrides any 'common-sense'. Yes Churchill will be irrational, for the nervous hold to the end, for the brave trade between the ranges...if that's your appetite. Finally, as a positive coverage positive coverage (ShareProphets.com by The Closet Chartist) is starting to occur for the International Arbitration Companies currently in the process of 'protecting their rights'. Will this make a difference? I doubt it...

Long Live these amazing IPO's, Foxton's, Daily Mail & Twitter, can there be a forth? Lloyds Bank perhaps?

Have a good evening/morning!

3 comments:

  1. Hi, i read you on ML & have to say you are well ahead of most commentary and scarily accurate when others are long you were short TCY/MGGT/DIA even before others realised it. keep it up fjp73 some very interesting coverage if it wasn't for you, I'd have listened to others telling me to buy more @10p instead of selling SXX

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  2. Morning, thank you Davy. SXX is interesting as I hold equity (long) but have also been short purely because what other people wish to deny (Potash Prices have been falling significantly & results aren't as good nor the outlook) and to push as a recommendation simply doesn’t mean its going to happen. There are many reasons why SXX was a short/sell. 1) Price of Potash 2) The price needed from SXX to achieve viability/profit is significantly higher 3) the global demand for potash was in my opinion over egged. 4) The SXX demand for significant capital cannot be ignored and with the price required being near 50% minimum above where it currently is, feasibility looks impaired. Likewise on the buy side, that is the short-term view, prices are forecast to rise Q1 2015 and I'd be inclined to agree, the Chinese were buying purely on weakness but demand globally will make them compete more (=higher prices) but that is med-to-long term views. Technically, because a price has had a low, doesn't mean it can't go lower. Have a good weekend!

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  3. Davy, you'll note the wider market has started pricing in the Potash Industries price deterioration. This is going to prove more difficult for SXX, that will a) have to underpin their value based on better performance of their product or b) find some parties willing to pay higher than the current potash prices and commit to this. They require this to warrant / substantiate finance and approval. For those not hedging there is significant reasons to sell down the stock, albeit as a long term hold, its likely 10 pence will be seen again but that's excluding any possible. dilution if funds were raised etc...

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