London Capital Group (LCG)
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Monday 05 March, 2018
London Capital Group
GM to dispose of London Capital Group Ltd
RNS Number : 5970G
London Capital Group Holdings PLC
05 March 2018
5 March 2018
LONDON CAPITAL GROUP HOLDINGS PLC
("LCG" or the "Company")
Proposed disposal of London Capital Group Limited
Notice of General Meeting
The Board of London Capital Group Holdings PLC announces that, together with its wholly owned subsidiary, Tradex, it has entered into a conditional sale and purchase agreement ("SPA") to sell 91.5 per cent. of the entire issued share capital of London Capital Group Limited ("LCGL") and 100% of the issued share capital of each of the LCG Subsidiaries held by the Company and/or Tradex to SLCG International pursuant to the terms of the SPA ("Disposal"). The consideration for this sale is the issue to the Company of Loan Notes by LCGL in an amount of £4,636,107, carrying a fixed interest coupon of 8 per cent. per annum payable in two equal instalments in arrears each year and will be unsecured and perpetual in term ("Loan Notes"). The Loan Notes interest will be payable half yearly in arrears on 25 May and 25 November. The first payment will be on 25 November 2018. The consideration is based on aggregate of (i) the market capitalisation of the Company at a share price of 1.3315 pence per share, which represents the 6-month volume weighted average price of the shares as at 23 February 2018 and approximately 40 per cent. premium to the Company's share price as at the close of trading on the day before the publication of this Document.
The Loan Notes are perpetual and may only be redeemed at the election of the Company, following LCGL becoming insolvent (as defined in section 123 of the Insolvency Act 1986) or is otherwise put into liquidation. Any such redemption shall only be made provided relevant permission to do so has been granted by the FCA. On redemption, any accrued but unpaid interest shall be paid.
In the unaudited results for the six months to 30 June 2017, the Company made a loss of £1,817,000 and the audited financial results to 30 December 2016 show that the Company made a loss of £7,777,000. With the cash in the Company reducing markedly as a result of losses from the trading activities of LCGL, the Directors have decided that the Disposal will be in the best interests of all Shareholders, whereby the Company will be guaranteed an annual coupon of approximately £370,000 and the losses and cash drain to the Company will immediately cease on completion of the Disposal. The Company will be given a new opportunity to invest according to its investment strategy, for which further details are outlined below.
The Company makes it clear that the consideration referred to above will therefore be the 8 per cent. annual coupon amounting to approximately £370,000 per annum. It is not envisaged that the principle amount of £4,636,107 will be repaid, although, as outlined above, under certain circumstances, this may occur.
Following Completion, the Company will retain a 8.5 per cent. shareholding in LCGL through its subsidiary, Tradex.
Under the SPA, the Company will also benefit from a cost indemnity from LCGL in connection with maintaining the trading in the Ordinary Shares on the NEX Exchange until the earlier of (i) 6 months from Completion; and (ii) completion by the Company of a transaction constituting a reverse takeover for the purposes of Rule 60 of the NEX Rules. At Completion, the Company will have no outstanding liabilities and no net costs going forward that relate to the operation of LCGL.
At Completion, the Company and Tradex will enter into the Call Option Agreement in favour of SLCG International, under which Tradex will gr
I averaged down a fair bit during recent collapse and so at 1p b/e now.. lovely rally in last couple of days .. no idea if it'll last.. so illiquid could even fall big again ...sold a small amount at 1.05 just now.. but want to stick with this to a reasonable extent for the medium term .. it moving off aim and onto Nex only is ok for me as is tradable via my nroker - Barclays SB - there ...so I'm somewhat comfortable now .. but an extrenely dangerous stock, as recently proven, so can never be comfortable comfortable holding this .. hard core players only here imho.. could be taken private at a low price too etc..
When this moves off AIM it will still be tradable on NEX via - my provider - Barclays Stockbrokers and many other providers too.. so I'm surprised at the post announcement complete collapse in s/p.. and this from an already incredibly low base imho... I topped up here at .70p thinking the fall was overdone.. but how wrong I was .. scary but I can't help thinking this might now even be a huge buying opportunity.. but clearly wtfdik.. so best I hold off topping up more i guess
AIM is a casino and stocks like this are for hard core gamblers.. and, as we're witnessing here you can of course lose all/effectivey all your bet on plays such as this.. that said you don't realise a loss or gain until you sell the position...and I'll not be selling my holding here even if it goes to zero...
results 6 weeks or so ago were minorly pogressive from an average previous basis imho.. so I think this is - very - slowly going in right direction and so i'm surprised by recent meaningful further weakness and so have done a small top up today and am open to doing one more top up if this goes beneath 1.5p.
if last years interim update date - end sept - is anything to go by... I just did a small top up here.. position remains small as this is highly speculative/dangerous - and think it wouldn't be that difficult for them to come up with improved results here imho.. and it's so lowly priced that even a half decent improvement should allow a meaningful re rate upwards here.. but wtfdik and dyor
"London Capital Group (LSE:LCG)Since we permitted advertising on our website, we've noticed LSE:LCG:London Capital feature prominently recently, so it's probable they've some sort of campaign going.Noticing they are listed on the stock exchange, ..."
" LONDON CAPITAL GROUP (LSE:LCG)Â Since we permitted advertising on our website, we've noticed London Capital feature prominently recently, so it's probable they've some sort of campaign going. Noticing they are 'listed' on the stock exchange, ..."
Apparently we survived the further plunge in the £ & may have even made a decent profit.There have been rumours of Sabet quitting but as the dominant shareholder I would have thought he would be difficult to dislodge,despite his apparent unpopularity.My small punt here a few months ago is a long way from profit but I remain confident that profit is a possibility here!
SP has plummeted since results & today in 3 trades 3 mill shares,(nearly 4%), were bought & ,IMHO,only Directors,or those in "the know" would invest that much in a bombed out company like this-so I will ( probably wrongly) take those purchases a a positive.
Dave I used to use the old system for info, the new system is beyond me and I have asked them to close the account and return my money to me! and that was at least three weeks ago! so far nothing has happened apart from an acknowledgement of the request!
The best thing that could happen to LCG is to be taken over by someone who knows what they are doing!!
1)Admin-unlikely as we have cash in Balance Sheet which covers liabilities,inc convertibles
2)CS take private cheaply-possible
3)Refinancing to improve liquidity & support growth-most likely
CS refers to "transformation" since launch of new platform & by Interims should have clearer view of profitability & client numbers.
SP hammered yesterday,presumably based on expectation of fundraising rather than historic results,which were known.Fundraising ,when announced,could result in strengthening SP if accompanied by projections for first half.
V high risk but I will stay for a while longer & see what happens-unless I get carted off for continually talking to myself here.
2015 was as abysmal as expected but the strong start to 2016 is encouraging,particularly as we are 4 months in & with lots of volatility.Interesting to see if CS buys more shares today to average down his cost
Results now due "by Thursday".Delays are rarely good news,although in the case of LCG the numbers for the year to 31/12/15 are known & presumably the numbers since January are also known & as we are now end of April the Outlook Statement for 16 should be fairly detailed as we now have 4 months experience of our new platform.Possible scenarios-
1)Trade has been abysmal & we are going under
2)Trade has been encouraging & we are raising more capital to improve Balance Sheet
3)We are being bought cheaply by Sabet,ie 10-15p & any recovery will be played down.
2 & 3 are certainly better than 1,which could lead to another "Doh" moment,although I only have 200k shares.
Over & Out,for now.
If positive outlook statement there is a possibility that our modest SP will be 15-20p by the end of next week.If problems persist & our new platform is failing to attract customers in sufficient volumes our leader will no doubt mount a rescue bid @ 5p or less.Interesting week ahead.
Probably but I now have a fair holding,at AV of about 6pwith view to the nature of the investment which,following forthcoming results will either fail,be bought cheaply by Sabet (say 15p p share,or will raise new funds,at,say 15p, & the SP will then rise strongly based on further recovery hopes.
V high risk V potentially v high reward
Have a Buy note out on LCG with an interesting & in depth rational.Bottom line is that LCG is a tiny company whose valuation model is substantially lower than its peers,much of which,of course,is explained by its abysmal performance.Any sign of an upturn in our fortunes should see an increased SP, & particularly of the CEO & Board buy more following Results.
V high risk = potential for v high reward
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