You obviously assume CEO etc of Fortune 500 companies are any more sensible/better informed than the ex chair/CEO/MD of M&S /Molson and ANO or Carillion to be smaller but topical - or even the investors hero Woodford
Good luck with your dip and I hope for your sake I am wrong about this being a dog.
and a further thought to my last post, if you or I were a Fortune 500 company would you be wasting time trying out products to KPI level or having discussions with any supplier who was only days away from being bust............................unless of course, you had assurances from a very high level etc etc!!
I cannot help wondering that if this is really seen by management as being a 'hopeless case' just why they have worked so hard (and clearly they have), to prolong what many are viewing as the inevitable end.
Whilst they issued that very clever and carefully worded RNS, that to my mind told us everything but in fact told us little to base any tangible decisions on. What they did not say is just how big this Fortune 500 player is and how near they are to a decision. Could they actually be only days away (a month?) and that is why they and their suppliers and financiers have prolonged making a decision before calling it a day. If this one is converted, just how many more of that list of Fortune 500 players could follow? From zero to hero in six weeks?
Don't sell the family silver but this may be worth a pocket money punt if only for a little bit of fun............................................ About as risky as The Grand National or the turn of a roulette wheel.
"Notably, a leader in a North American specialty food sector has agreed to roll out ELIoT pallets in their supply chain subject to the pallet meeting KPIs throughout the implementation," the company said.
"The company continues to advance its discussions with potential funding partners and customers in order to progress the business," it added.
The "glimmer of hope" is for Woodford and Woodford alone.
He is buying this up to take control for the assets, at least 400k pallets valued at $100/pallet, lets be nice and say he sells them for $40/pallet, that is a value of $16 mio, plus various other assets, plus the building in Switzerland.........
Not to mention a Star Studded Board of Directors, wonder what that is worth ? !!
A glimmer of hope in the monthly Woodford Patient Capital report about RM2. Given the share register includes significant capital investors in Woodford Investment Management and Invesco and given that there is not any significant debt on the balance sheet, it may not quite be the end of the road. However, situation is extremely precarious for PI's.
The company announced in December that it had been unsuccessful in securing funding for the year ahead. RM2 has had its fair share of challenges in recent years and in many respects, it epitomises how difficult it can be for early-stage businesses to develop and scale-up. We continue to see value in the disruptive pallet technology that RM2 International has been progressing towards commercialisation, overcoming many production challenges and enhancing the product offering along the way. The position is now small in the context of the patient capital portfolio but we will continue to work with the company to find an appropriate solution for its capital requirements and to give it the best chance of fulfilling its potential."
We should find out how the fund raising is progressing in the next few weeks or alternatively a note on the appointment of administrators for the receivership as RM2 is due to run out of cash in February.
Baffler - I'm with you. Would be a complete gamble to invest any more here, so SP will end up down today, but the RNS is relatively positive in terms of confidence in finding finance to trade beyond end Jan 18.
So it feels like we will lose the lot within 9 weeks or treble/quadruple the current valuation IF funding is found with revised business plan.
Sure it's all existing out their, however saying that i am also equally sure improvements could be made possibly but i really can't see why anybody would need £200mio for this, even 10% (£20mio) should probably be considered as an over kill.
A textbook case of too many Chiefs, not enough Indians !
I think you are wrong, the idea of a plastic pallet is good; it's stronger, easier to clean, easy to customise (colours/logos printed on pallet) more long lasting, less repairs, possibilities of using recycled plastics in manufacturing cycle etc etc
But it certainly doesn't cost anywhere near 10% of the capital invested here !
That may or may not be so, but one really needs to think how can you raise £137mio on a floatation, pick up a few extra sizable chunks of ££ on the way, so somewhere around £200mio and end up with absolutely nothing in a very low tech business ?
This is a huge amount of money for .....a pallet,....... something that is simple, which tends me to think that the BoD carry a large part of the responsibility for this debacle and should maybe held to account.
They have always been very parsimonious with information, is this maybe the reason, mismanagement and incompetence ?
So we lost £0.003 today on a sale of 15'000 shares, a trade of £705.00.
Not really a big deal until it's calculated over the 407.06 million shares issued in this company.
How much longer is this going on for, I am having immense difficulty in understanding where over £130 million went and nothing to show for it ! How much do you need to develop a pallet, it's not exactly a new technology, maybe an improvement but how can anyone expect to get anything out of this company now ?
One would think that the BoD have some responsibilities here, maybe their is a case to answer for misrepresentation and miss use of funds ?
The quality of the journalism is not much better than the quality of RM2 management. Seems that journalists like bankers no nothing about pallets else they would point out the obvious, plastic pallets already exist as does pallet tracking
A starry cast of directors has not saved AIM-listed RM2 from financial embarrassment. It faces a scramble to raise new funds, reports Peter Evans
The Sunday Times - Business20 August 2017
John Walsh enjoyed his fair share of dramas during more than two decades in international finance. While a capital markets big shot at Credit Suisse First Boston in the early 2000s, he had a spectacular falling out with Stephen Hester, then the banks finance chief.
Bob Diamond, who was running Barclays Capital at the time, heard about the discord and offered Walsh along with dozens of his cohorts big money to defect.
The naughty 40, as they became known, leveraged their position to force huge pay rises from Credit Suisse. Walsh was widely seen as the ringleader.
After such high-stakes poker, the financier craved something more prosaic. In 2007 he stepped away from the coalface and founded a pallet-making company.
Walshs desire for a quiet life has not worked out. The drama now unfolding at RM2, an AIM-listed innovator in pallet development, rivals anything he experienced when dealing with Diamond and Hester.
The company, which is 28%-owned by the star fund manager Neil Woodford, has lost more than 90% of its value since listing three years ago, when it raised £137m. After an aborted attempt to raise $65m (£50.5m), it faces a cash squeeze that insiders say must be resolved if it is to continue to supply its muchvaunted pallets.
Members of its board, which contains business galacticos such as ex-Diageo chief Paul Walsh (no relation to John) and former Marks & Spencer boss Lord (Stuart) Rose, privately admit they have made blunders.
Pallets may sound boring, but they are big business. The transportation of physical goods from iPhones to iceberg lettuces relies on them. The industry is estimated to be worth $45bn.
Yet pallets have traditionally been made from wood, which splinters easily and is not environmentally friendly. After founding RM2, Walsh spent $50m developing a longer-lasting, sustainable alternative. The result was a smart pallet, made from a glass-fibre composite. An embedded microchip allows the pallets to be tracked across the globe and can even record the ambient temperature.
Walsh enlisted Ian Molson, scion of the Molson Coors beer empire and his former boss at Credit Suisse, to chair the business when it listed. Amaury de Sèze, former chairman of French retail giant Carrefour, also agreed to sit on the board.
Despite a cast of luminaries that would make any FTSE 100 company jealous, RM2 has spiralled out of control.
The most catastrophic decision was to make the new pallet in-house at a plant in Canada. This strained the Luxembourg-based companys resources until manufacturing was outsourced to Mexico and China last year.
RM2s cash reserves at the end of May stood at $2.7m, while its cost of doing business for the remainder of the year is $1.7m a month. The company raised $20m in June by issuing convertible preferred shares to existing investors. Last year its turnover was $8.9m.
In June, RM2 pledged to raise at least $65m, but last month said it would not be in the best interests of the company and shareholders to complete the equity offering.
It is understood new backers were willing to invest, but at a much lower price than the offer. Jasper Judd, the industry veteran who replaced Walsh as boss in June, left this month after a disagreement over the fundraising.
The cash is required to purchase pallets from RM2s new manufacturing partners. Without it, the company will not be able to fulfil future orders. Molson admitted to errors in the running of the company, especially the failure to outsource manufacturing from the outset.
That was a terrible mistake, he said. We tolerated a lack of performance for far too long and spent a ton of money.
RM2 is understood to be in talks with several potential multinational customers, though no contrac
I have no interest in RM2, palletts, etc but such co. mismanagement seems to be a regular feature of AIM cos and yet another warning sign for PIs to double/treble check just what they're investing in and to be aware that there is a much greater risk in this less-regulated sector.
'Caveat emptor' was never so appropriate!
Given that the concept of a trackable plastic pallet was not new nor invented by RM2. The idea of choosing to manufacture in the low cost environment of Canada was ridiculous and the fascination with production volumes in RNS since the IPO frankly absurd.
It makes you wonder what Molson, Rose and Walsh ever actually achieved at Molson M&S and Diegeo if they could be taken in and continue to support this company.
The hype on the IPO was outrageous and should have been investigated by the FCA.
You also must wonder how Woodford got so involved in this shambles.
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