UK 17:49 Saturday, 7 November 2026
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Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
There is just so much to say about the restructuring it is hard to know where to start. A good place would be Waseem Shakoor’s piece HERE, but there are concerns that Afren is being, shall we say, less than helpful to its beleaguered shareholders as they decide upon whether to take part in the open Offer as part of the proposed restructuring. Let us take a look at a few statements in the RNS and Prospectus from last Friday.
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Comments
JSB
Nigel,
Current holders would be bonkers not to take up their entitlement. You can sell now at over 2p knowing you are going to get an allocation at 1p in the near future
nigel somerville
JSB – shareholders would be bonkers not to sell at 2p – I agree. But buying at 1p? You might double the number of shares you hold, but if it all goes wrong (see next piece, not to mention Was Shakoor’s piece) then twice nothing is….? (no Rob Terry maths here, please!!)
JSB
Nigel,
Forward sell via a CFD hedge to lock in a profit.
Am I being thick?….IG are taking sells again
JSB
Nigel,
Forward sell via a CFD hedge to lock in a profit.
Am I being thick?….IG are taking sells again, as long you close both at a similar price it locks in the profit.
nigel somerville
JSB – ah, I see what you mean (so ‘tis me being thick!) However, one might just take the chance to get out altogether at 2p! Also, bearing in mind the s/h revolt at yesterday’s AGM I’d be careful not to become a hostage to fortune. In theory (however unlikely) the open offer could be blocked by shareholders at the forthcoming GM.
drunken sailor
Nigel,
Your maths is almost spot on, there is also the potential for more shares to be issued if the timetable gets delayed.
The whole thing is extremely confusing and the use of terminology is inconsistent as you rightly point out. I had to read through several times before I fully understood all the implications – a good job they produced it after market close on Fri so people had all weekend to digest it rather than releasing at 0700 on Mon do you not think?
I have not found the GM circular, so I do not know which resolutions are ordinary and which are special and following the AGM vote that could make a difference.
Coming to the AGM vote the overwhelming majority of shares in issue were not voted. There was obviously a massive protest vote. about 20% of shareholders just voted against every resolution. It is a shame the proxy votes for the resolutions that were withdrawn (re-election of directors) will never be made public – they would no doubt be severely embarrassing for the now former directors.
It would be a bit like taking the result of a local bye election where local voters had a specific beef with the system and a loony (eg UKIP) candidate got in and translating that to how a general election would go. However it is clear that Alan Linn was rattled by the vote and no doubt by comments from shareholders who attended.
The fate of shareholders however was effectively sealed when they took the “bridging loan” the terms of that loan which have only just been revealed effectively hold a gun to shareholders heads. If they vote no bondholders end up with complete control – the assets get sold, shareholders have to approve the sales but cannot block them. This is material info that should have been made available at the time of the bridging loan, but it is only the release of the prospectus that spells it out. With the new chairman having had his fingers in this pie as a consultant that does not bode well for garnering the support needed at the EGM.
I think at the end of the day a no vote is extremely unlikely, as most people do end up voting with their pocket (a bit like the jocks voting to stay in UK, they knew which side their bread was buttered, but they still went for a massive protest vote in the general election, because they could – in the sure knowledge that putting all those SNP candidates into parliament would have no real impact – why should about 7% of the UK population be able to adversely impact the wealth of all of us?).
drunken sailor
Found the EGM proxy form. Just 1 Special Resolution
1. THAT:
a) each ordinary share of £0.01 each in the capital of the Company be sub-divided into (i) one ordinary share of £0.0000001 nominal value, and
(ii) 99,999 deferred shares of £0.0000001;
b) the articles of association of the Company be amended by the insertion of a new Article 6A relating to the Deferred Shares (as defined in the prospectus dated 19 June 2015);
c) the directors be generally and unconditionally authorised for the purposes of section 551 of the Companies Act 2006 to exercise any power of
the Company to allot shares and grant rights to subscribe for or to convert securities into shares in the Company up to a maximum nominal amount of £1,771.372946 in connection with the issue of Intermediate Shares (as defined in the prospectus dated 19 June 2015): (i) in connection with the Debt for Equity Swap; (ii) in connection with the New Senior Notes Share Issue; (iii) in connection with the Open Offer; (iv) in connection with the Early Subscriber Issue and the Additional Commitment Issue; and (v) in connection with the Bridge Securities Share Issue;
d) the offer of Ordinary Shares pursuant to the Open Offer (each as defined in the prospectus dated 19 June 2015) at a price of 1 pence per ordinary share, being at a discount of more than 10% to the closing middle market price of the ordinary shares on 18 June 2015, be approved;
e) the directors be given power pursuant to section 570 of the Companies Act 2006 to allot equity securities (within the meaning of section 560 of
the Companies Act 2006) for cash under the authority granted by such resolution, and/or where the allotment is treated as an allotment of equity securities under section 560(2)(b) of the Companies Act 2006 as if section 561(1) of the Companies Act 2006 did not apply to any such allotment, such power to be limited to the allotment of equity securities in connection with the Restructuring (as defined in the prospectus dated
19 June 2015);
f) each Intermediate Share (as defined in the prospectus dated 19 June 2015) be consolidated into ten ordinary shares of £0.000001 nominal value;
g) the directors be generally and unconditionally authorised for the purposes of section 551 of the Companies Act 2006 to exercise any power of
the Company to allot shares and grant rights to subscribe for or to convert securities into shares in the Company up to a maximum nominal amount of £627.00 and comprising equity securities up to an aggregate nominal amount of £1,254.00;
h) the directors be given power pursuant to section 570 of the Companies Act 2006 to allot equity securities (within the meaning of section 560 of
the Companies Act 2006) for cash under the authority granted by such resolution, and/or where the allotment is treated as an allotment of equity securities under section 560(2)(b) of the Companies Act 2006 as if section 561(1) of the Companies Act 2006 did not apply to any such allotment; and
i) the Restructuring (as defined in the prospectus dated 19 June 2015) be approved and all actions undertaken by the directors and all documents entered into, or to be entered into, by the Company or any of the Company’s subsidiary undertakings in connection with, or otherwise related to, the Restructuring or as otherwise described in the prospectus dated 19 June 2015 be ratified and/or approved.