Really feel for long term holders right now who put their faith, belief, trust in a CEO & board that led us to believe in a story that appeared destined to become reality, yet “ pulled the wool over our eyes “, deceptively misleading shareholders till the company drained every single penny then giving us a warm send off in appreciation of our loyalty & support!! Had GVs dam back for years and years because I truly understood the difficulties facing not just our company but all US LNG developers in one of the most tough, challenging macro environments ever!
We’ve had to endure the pain of natural gas spot price crashing, a flood of LNG supply hitting the market... buyers under both scenarios feeling no urgency to commit to long term contracts. Capped off by Trump picking a trade fight with China in June 2018 in a year where 20yr contracts were finally flowing freely once more. But what I can’t stand is being bluffed by a weak leader who kept up the act with deceptive, bold, eye catching statements/ words that reeled in investors and proved to be a smoke screen from the real truth!
Recapping a few beauties;
Sept 2017 Quarterly Highlights - LNGL’s Board remains fully committed to redomiciling the Company to the U.S., but at the same time, recognizes the utmost importance of maintaining the focus on offtake and strengthening the Company’s cash position with a goal of increased liquidity. In addition, the completion of regulatory requirements associated with the redomiciling was taking longer than expected leading to an extended project timeline.
Over the last quarter, our discussions with potential offtakers have increased significantly. With a colder than normal winter expected in Asia and a closing window to secure a long-term LNG supply, buyers are more willing to have serious discussions, and we remain confident in signing offtake agreements with credit-worthy buyers later this year or early in 2018. By close of Sept $38.2M in capital!
March 2018 Quarterly Highlights - Though discussions and negotiations related to offtake remain confidential, we believe the progress we made toward selling LNG capacity at Magnolia LNG during the third quarter of Liquefied Natural Gas Limited’s (LNGL or the Company) fiscal year will prove to be extremely valuable toward finalizing sale agreements. March 2018.
Sept 2018 Quarterly Highlights - There are varying opinions on how and when the trade issues with China will be resolved. Considering that, our communications with potential Chinese offtakers remain robust with the intent to complete agreements if trade tensions abate before Magnolia is fully sold out.There are varying opinions on how and when the trade issues with China will be resolved. Considering that, our communications with potential Chinese offtakers remain robust with the intent to complete agreements if trade tensions abate before Magnolia is fully sold out. Closed Sept $46.4M in the green!
15th Nov 18 AGM Presentation - Not if but when!!
May 2019 - GV praises marketing team during conference call remarking, “ Our marketing team have done an outstanding job and customers have said so as well. “ The CEOs performance goals for 2018 was to sign 8mt in binding MOUs with investment grade counterparties. In 2019 it was to sign 8mt in binding agreements with investment grade counterparties. I repeatedly asked GV and Micah how many MOUs had been signed (not obviously who we had signed with) but was met with not being able to reveal due to confidentiality agreements. Rubbish, it was our right to know a number to hold marketing team accountable. Truth is, they had failed!
On July 22, 2019, the Board of Directors announced its decision to re-domicile LNGL to the U.S. with a listing on the NASDAQ Stock Exchange. We believe listing on the NASDAQ will deliver significant benefits for our shareholders and favorably position the Company for the future. Decision made with only $21.8M left in the bank by June end! I believe their intent was never serious and would be surprised if we ever commenced the process, filing with the US SEC!
The US redomicile was first discussed way back in late 2017 when our company was in a much stronger/ healthier position then it was entertained again a stone throw back to May 2019 during a conference call when Tim asked GV, “ wouldn’t it be beneficial to redomicile to the US and maximise shareholder value? “ In which case GVs response was, “ well what are your thoughts Tim? “. At the time I could not believe a CEO who we look to for guidance, direction & answers would ask a shareholder what his thoughts were!
Nov 6 2019 - In email communication with Micah, an excerpt from this mail read, “ Regarding China, there is a report this morning that LNG is part of phase one. If that is the case 2020 is going to be very exciting! The market should flow much more freely as I think it will speed Europe and the Middle East up as well! “ We’ve been banging on for years about robust negotiations/ remaining engaged with Chinese customers (despite trade war) then a 1 year tariff exemption gets granted beginning March 2 yet negotiations with China appear to have vanished?? because management have thrown in the towel!
To start this latest Take Over announcement by saying, “ LNG LTD is pleased to announce..... “ shows zero empathy, zero care for destroying shareholder wealth and zero fight for shareholders who kept believing in this team! The fact that they knew cash reserves were dwindling over the past year while we had zero serious buyers intent on signing SPAs (apart from DeltaOE possibly??), let alone MOUs (which we had multiple according to Micah, if you can believe him) had a year to prepare for crunch time and figure out a viable capital injection solution and this is what the board came up with.....
Thankyou to our loyal shareholders for your support... “ We’re pleased to announce a 72% premium to the closing price of A$ .115 on the trading day prior to the date of this announcement. The offer represents a compelling premium to LNGLs current trading price. The directors of LNGL will therefore unamisiously recommend that shareholders accept the offer in the absence of a superior proposal being received. “
Absolute disgrace, unprofessional & appalling representation from leadership over many years!
OK, now that I’ve vented my displeasure, disappointment and disbelief over how this is all going down, how do we move forward from here? I ain’t conceding defeat to these cowboys! Need to band together, try get our voices heard to whomever can help us survive past the next couple of months. I’ve already reached out to Baupost, will be interested to find out their stance (if open about it) on what’s happening and if they are willing to take up the fight with us! Let’s not forget, they got our Chairman + key director fired so are they willing to let their investment go up in flames? It wouldn’t hurt other holders also emailing Baupost...
It might pay dividends for someone who lives in the same state as Maurice Brand or someone prepared to fly to meet with him to get his thoughts, ideas, maybe he might have contacts up his sleeve for potential replacements for a CEO, board directors IF we manage to survive. He founded the company, was the visionary and did an incredible job on selecting 2 wonderful sites in Magnolia, Bear Head. He surely wouldn’t be happy seeing the baby he created get torn to pieces. It’s worth a try!
If somehow we could raise enough capital to buy us time through next couple of Quarters, fire CEO & Board (how could we?), keep a few key personnel beneficial to our cause and find just a few essential replacements that can navigate us through these difficult times..... A change of leadership (CEO with an edge like Souki) and tactical nuance would work wonders imo! Think Baupost can be our only saviour unless an institutional investor comes in out of the blue during these final months.
If only we could hang in a couple more years, future demand will fly again while supply/demand will reach equilibrium around 25/26’. We have a 2mt SPA awaiting, within touching distance of realising an epic dream but currently having our fate decided by poor management who’s not acted or fought in the best interests of long term holders!
We certainly should be playing a role in the next wave!
Lets keep standing our ground!
Fight on!!
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