Good morning! It's Paul here. Drat - just remembered that I didn't put up a placeholder article last night. I went to bed at 9:30pm, and my alarm to put up a placeholder article goes off at 10pm. Sorry about that.

Please note that Graham added some more sections to yesterday's report, which you might have missed. Here is the link to yesterday's report. I was particularly interested in the situation with disastrous toilet roll processor, Accrol Group (LON:ACRL) . What worries me is whether the placing is likely to go ahead at 50p? Since the share price has now fallen to 40p in the market, the key question is whether placees have signed anything binding to put in fresh equity at 50p? What's to stop placees pulling out, or demanding a reduced price? Normally with deeply discounted fundraisings, the share price stabilises a bit above the placing price. In this case though, the market price is now itself at a 20% discount to the originally deeply discounted placing price of 50p. It makes me wonder why the company/broker lifted the suspension on the shares? Surely it would have been better to leave the shares suspended, until the fundraising had been completed?

I was tempted to have a nibble at these shares yesterday, in the hope that the price would be pushed back above the 50p placing price. However, reading Graham's article on it yesterday, I decided to avoid Accrol. As Graham pointed out, the £18m placing doesn't seem to be enough to solve the company's financing issues. Plus, the fact that net debt will only be slightly reduced, implies that the company has been trading at enormous losses recently.

I think Accrol's business model just looks bad. In fact all these issues were flagged up in its admission document, which I reported on here, in Nov 2016. The company even flagged up that pulp reels were unusually cheap, due to over-supply (thus boosting Accrol's profits at the time it floated);

Parent Reel price volatility

The Group considers that, due to an oversupply of Parent Reels and pulp at presentParent Reel prices are currently comparatively low.

However, if Parent Reel prices were to rise above the Group’s expectations and the Group was unable to offset such increases through cost savings or price increases, that could…

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