LON:MOG^J17 | MOG - After Hours RNS - Never A Good Sign....

21st Apr '11 by doverbeach

5 comments 5574 reads

Out at 6.16pm before a bank holiday weekend ... lots of time to take in the full horrors of massive dilution:

http://www.investegate.co.uk/Article.aspx?id=201104211814464051F

Mediterranean Oil and Gas (AIM: MOG) is pleased

haha

to announce a proposed capital reorganisation featuring a fundraising of £20 million through the issuance of New Ordinary Shares at 6p each,

ouch last traded price today was 14.55p

settlement of its bank facility and conversion of its Convertible Bonds and Convertible Loan Notes. As a result of this proposed reorganisation, the Company will have approximately 429 million outstanding shares

eek, up from c 39million today

and will have no financial debt. In addition, the Board of Directors of the Company will be strengthened to include seasoned professionals who will provide valuable guidance on implementing the Company's strategy.

Andrew Cochran will be appointed as Non-Executive Chairman of the Company and Miles Donnelly and Michael Seymour will join the Board of Directors as additional non-executive directors of the Company.

ah. AC is CEO of Dominion. The other two are two of the founders of Aurelian, which is now, er, thriving in their absence.

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djpreston

21st Apr '11

Ouch indeed.

Not impressed in the slightest. Thankfully I only had a few higher risk holdings bought v recently. I did think that it may be vulnerable toa cheeky MBI and possibly a PMG/TC target....Definitely not impressed by Syemour and what I thought was the disgraceful running of AUL when he was the helm.

Balls!!

emptyend

22nd Apr '11

As a result of this proposed reorganisation, the Company will have approximately 429 million outstanding shares

eek, up from c 39million today

...mmmm..... 10x in a single hit.......is that a record?

There is just a vast difference between being diluted with 10X the number of shares being issued at 6p when the previous price traded was 14.55p.... and being diluted at the market price - which I know that people complain about, but at least it doesn't give them an immediate capital loss on the scale likely at MOG!

thebuffoon

It will be interesting to see what opportunity this throws up on Tuesday..

Buffy

sirlurkalot

I guess this sort of deal is what happens when a company runs out of cash and the market has very little appetite for more equity issuance, particularly if the assets aren't tempting enough for a low-priced trade sale M&A exit.

The five year graph (just click 5y on the right here) is fairly spectacular.

This of course looks pretty horrible, but one positive is that news of this reorganisation hasn't leaked out. Insiders have been discreet, in terms of the most recent SP of 14.5p or so being fairly close to what it was a month ago.

doverbeach

23rd Apr '11

particularly if the assets aren't tempting enough for a low-priced trade sale M&A exit.

Well that is another cause for concern. The assets look pretty damned nice, so I am left with the conclusion that either Eni (who is their partner in a couple of them) doesn't agree, or management are determined to keep their jobs and remain independant. Neither of which bodes well for investors.

MOG - after hours RNS - never a good sign....

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Doverbeach

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