Management has, since listing, struggled with the concept of 'aspirational' versus 'reality'. Projects have been described as being "under construction" when clearly they were not. If incorrect written information is allowed to be released via ASX updates to market, then information given over the phone carries even less weight. There is a credibility problem.
That said, I commend Tinwins for taking the initiative and calling the company. I also commend the DEL director he spoke with for returning his call and discussing the situation. He didn't have to do that. "All the directors are unavailable" would not have been unexpected; especially given the circumstances, and track record of providing useful / timely updates. Some good work all round from the investor and the director (Hamish or Joe, I presume). I also respect the sensitive way the information from that call was handled. I would have been too tempted to write a thousand-word post had I been part of that conversation.
I do not doubt that if one spends many years of one's life developing a project at work, of course not seeing the project developed would be very disappointing. Anyone would be emotionally invested in it; including shareholders -- past and present. I don't even doubt how genuine the directors would be to see a positive resolution. Nobody wants their project or company to fail. That said, the company can say, or not say, whatever it likes at the moment. It can word its announcements any way it pleases to say the retail division 'is not an integral part of the company'. However, the reality is that, somehow, from somewhere, it needs to quickly produce this money owing to avoid an insolvency event.
The situation reminds me a little of the current Sea Farms Group (SFG) saga. From what I can understand, for years, SFG has been planning the development of a monsterously ambitious prawn farm in the NT. The directors are major shareholders. The project has not gone ahead after years of delay and various feasibility studies. The share price has tanked to half of one cent per share. The directors recently put the major project itself into administration (rather than the ASX listed company) and suspended trading of shares after receiving a large bill for engineering at the site. They framed the issue as the massive main project being 'just a part of the greater SFG entity' (there's a couple of small farms in north QLD). Then, held a Meeting of Creditors vote, somehow arranged a X cents in the dollar deal in a Deed of Company Arrangement, took the project back, and resumed trading on the ASX. Now, the engineering company is saying "We're unhappy! See you in the Federal court in August". Shareholders are disgruntled. The situation is a mess but the HC threads make for interesting reading. I have never been a shareholder. It's slightly different to DEL's predicament, but there are some parallels.
Maybe DEL will try a similar manoeuvre -- put the retail entity into administration, like a surgeon would remove a gangrenous limb, then try to continue trading and operating minus Clean Tech / Delorean Retail. I don't even know if this would be legally or practically realistic. Maybe that is the so-called 'ring fence' option if a convertible note option is not being arranged behind the scenes. It could work, in theory, I suppose. The issue I see here is how willing Palisade Impact or Brickworks would be to do business ($25m investment per plant) with a restructured DEL given financial shenanigans. It would have to seriously affect confidence, and the ability to raise money, form partnerships, or obtain credit in the future. The Palisade team would be looking at each other and shaking their heads. Maybe a short-term, temporary, pyrrhic victory of sorts. Then what?
The current situation would also be unpleasant for Yarra Valley Water, with the uncertainty of their anticipated development after a couple of years' worth of planning.
I guess it's all just pointless speculation on my part, and we shall find out soon enough what the result is.
Well done again to Tinwins for getting on the front foot and having that phone conversation. He's done more than I (or others) have in taking steps to get information direct from the source.
DEL Price at posting:
3.2¢ Sentiment: None Disclosure: Not Held
(20min delay)