Originally posted by Transversal
@Just_a_guy
147mUS$ was the Net Current Assets of OM Delaware, at 30th Sep 2018.
OM Delaware currently has ~19.0m outstanding shares, 16.0m at the time of demerger and ~3.0m subsequently issued as RSUs under the 2018 Equity Incentive Plan.
OMN Limited only owns 90% of those 16.0m, i.e. 14.4m; the total number of OM Delaware shares is going to increase further, with the RSUs awarded to Joe P (new CEO), up to about 20.0m.
Therefore, on a fully diluted basis, OMN Limited will own only 14.4/20.0 = 72% of those Net Current Assets, i.e. 147mUS$ * 72% = 105.8m$.
Then you have to factor in the cash burn between 30th Sep 2018 and today, which should be roughly (16.3mUS$-2.5mUS$)*81/92 = 12.2mUS$ (for OM Delaware).
So, as of today, the Net Current Assets attributable to OMN Limited (on a fully diluted basis) should be 105.8mUS$ - 72%*12.2mUS$ = 97.0mUS$ = 136.6mA$ = 1.315A$/share.
At today’s closing price of 0.575A$, that gives a ratio of 1.315/0.575 = 2.3x; that still looks very attractive to me, but it is definitely lower than 3.5x.
Let me know if there is anything unclear.
That should be the NTA on a business as usual basis. I wonder however if the liquidation NTA looks significantly different.
I wonder, because on page 59-60 of the Information Memorandum, it describes the details of the 2018 Equity Incentive Plan. Under the section titled "Dissolution or liquidation" it says this:
"In the event of OM Delaware’s proposed liquidation or dissolution, the administrator will notify participants and all awards granted under the 2018 Equity Incentive Plan will terminate immediately before the completion of such proposed transaction."
I'm not 100% sure on this, but it looks to me like it's saying that if the business is liquidated, the freebie incentive shares given out to employees get cancelled. Accordingly, the NTA of OMN may be significantly higher on liquidation.
Could be something to consider if momentum for a liquidation of the business grows.
