Troubled mining exploration company Nunaminerals (CPH: NUNA) said weeks ago its cash situation is critical. Since then it has already had a couple of run-ups on speculation of a lifeline being thrown. The topsy-turvy struggle involves government of Greenland as a major shareholder and creditor, so far failing in its bid to de-list and nationalize the firm as a majority shareholder. Also NunaMineral's President & CEO has already given notice but has a 12-month notice period.
In this Friday's trading Nunaminerals was up 45% on especially high volume before trading was halted pending an announcement. A couple hours later the company basically reiterated its critical situation where it is unable to meet its debt obligations towards the government on a loan that was already due and now trading is suspended. Those who bought in on the run and weren't in time to get out have to hope a solution is found, something which is by no means certain. Nunaminerals Boards is promising a new update early next week, with insolvency proceedings a real possibility.
Just a little more than a week ago we had a massive uptick in the shares of Vaahto plc (HEL: WAT1V) heading to a trading halt. Even the local Financial Supervisory Authority woke up and suspected something might have been leaked. Trading was halted for a few days until the company came up with a notice of a major directed share issue that was a necessary condition on debt forgiveness and conversion of portion of debts to subordinated capital loans, an arrangement without which the company would have went belly up. Some but not all of the gains of the day of the trading halt were instantly wiped out on account of the size of the share issue and the subscription price far below market price, leaving some of those buying on the run-up banking a big loss to get out.
One of participant in the targeted issue, Lombard International Assurance S.A., sold a big chunk of its holdings it had acquired prior to the issue the next day at still a nice plus to what it pays, both in the issue if the aim was to keep ownership portion the same, and versus a couple months earlier when it had bought into Vaahto with a deal with one of the other participants in the targeted issue. This shows diverse measures with which savvy institutions can book gains multiple ways. Since the debt forgiveness and conversion became binding, Vaahto's share has again been making some headway, allowing the more patient speculators to get out unscathed.
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