Shells Part Two –Black Holes to Supa Novas…. eventually

Share On Facebook

Shells Part Two –Black Holes to Supa Novas

© Image copyright quiddle

 

 

A shell exists to become the vehicle for an entrepreneur to grow a real business. This involves the real business being reversed into the shell via an RTO, Reverse Takeover. The corporate finance work to do this is considerable and any short cuts lead to increased expense and delays.

 

It’s an attractive proposition as it creates something from very little; You invest in a listed cash shell worth a bit more than the cash and the shell team agree an RTO, which brings in earnings and a business plan that creates an uplift in value. It is however a process not without ‘challenges’ and there is a suspicion that Shells are of more value to financial advisors and entrepreneurs than being a genuine asset class to small cap investors.

 

Below are five available standard listed shells and six shells, which after announcing RTO talks, are suspended pending RTOs.  A Standard listed shell has longer to complete and RTO than Aim listed ones.  The time needed to complete the ‘legals’ is often over three months which is making shell investing less attractive.

 

 

 

Safe Harbour (SHH)  Mkt Cap £36.8m, 135p

Raised £22m net at 120p a share in March 2018, having previously raised £10m. After overheads and costs there was net cash of £30.5m.

Seeking B2B business distribution or business services companies.

Backed by Marwyn

Headed by former Bunzl executive Rodrigo Mascarenhas and Avril Palmer-Baunack who is involved with BCA.

 

Wilmcote (WCH)  Mkt Cap £24.4m, 117p

Raised £15m at 120p a share in August 2017. Had previously raised £10m at the same price.

Seeking chemicals acquisitions

Backed by Marwyn

No longer in discussions to buy Arysta LifeScience

 

Limitless Earth (LME)  Mkt Cap £2.9m,4.2p

A placing at 3p a share raised £3.05m in May 2014. At the end of July 2017, NAV was £2.34m including cash of £791,000 and investments of £1.54m.

Limitless Earth intended to invest in businesses that will benefit from changing demographic factors with and the initial focus was Europe.

The current focus is cleantech, life science and technology businesses. Investments include Saxa Gres, an Italian industrial waste recycling and tile making business.

 

Spinnaker (SOP) Mkt Cap £1.14m 3.8p

Cash £1.18m

Looking for deal in the energy or industrial sectors

The directors previous shell was less than a great success

 

AIQ Limited (AIQ) Mkt Cap £15m 30p

Cash £4.5m

Looking for e commerce deal  China focused

The premium to cash is far less than it has been but still difficult to justify.

 

 

 

Suspended Pending Deals

Derriston Capital (DERR)

Mkt Cap £2.85m, Cash £1.9m – Suspended May – pending a deal

Fandango (FHP)

Mkt Cap £0.9m- Cash £0.3m-Suspended May pending a deal

Zamano (ZMNO) 

Mkt Cap £4m, -Cash £5m – Suspended March – pending a deal

Contango (CGO)

Mkt Cap £1.61 m – Cash £1m – Suspended Dec 2017 pending a deal

Path Investment (Path)

Mkt Cap £1.5m -Cash £1.4m Suspended Dec 2017, Deal pending moving to AIM

Rockpool (ROC)

Mkt Cap £1.14- Cash £1.2m – Suspended Nov 2017 pending a deal

Stranger (STHP)

Mkt Cap £2m – Cash £0.9m – Suspended Aug 2017 pending a deal

 

 

 

CLICK HERE TO REGISTER FOR FREE ON ADVFN, the world's leading stocks and shares information website, provides the private investor with all the latest high-tech trading tools and includes live price data streaming, stock quotes and the option to access 'Level 2' data on all of the world's key exchanges (LSE, NYSE, NASDAQ, Euronext etc).

This area of the ADVFN.com site is for independent financial commentary. These blogs are provided by independent authors via a common carrier platform and do not represent the opinions of ADVFN Plc. ADVFN Plc does not monitor, approve, endorse or exert editorial control over these articles and does not therefore accept responsibility for or make any warranties in connection with or recommend that you or any third party rely on such information. The information available at ADVFN.com is for your general information and use and is not intended to address your particular requirements. In particular, the information does not constitute any form of advice or recommendation by ADVFN.COM and is not intended to be relied upon by users in making (or refraining from making) any investment decisions. Authors may or may not have positions in stocks that they are discussing but it should be considered very likely that their opinions are aligned with their trading and that they hold positions in companies, forex, commodities and other instruments they discuss.

Leave A Reply

 
Do you want to write for our Newspaper? Get in touch: newspaper@advfn.com

By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions

P: V: D:20191121 08:38:11