Currently, the Company has less than $5 Million left to operate and management tells us there is an “immediate need to raise liquidity”.
1 year ago management announced they were going to provide clear communication to shareholders and keep us updated with Quarterly Conference Calls. Now, with less than $5 Million left to operate and the immediacy to raise liquidity this is just another example of an announcement that never materialised.
2 years ago management announced they were confident of selling all of Magnolia’s capacity and beginning construction. Now, zero binding capacity sold and still no construction.
3 years ago management announced they were re-domiciling to the NASDAQ and finalising offtake agreements. 8 months ago the BOD approved the re-domicile, now no re-domiciling until after they can raise the urgently needed liquidity and still no finalised binding offtake agreements.
There’s been a lot of speculation and distraction from the fundamentals lately, but the biggest question at the moment is still ‘liquidity’ (or lack of for future operations). Here’s another look at three possibilities of raising liquidity based on management’s limited information and options.
The sale of equity (or debt converted to equity) to a large investor like IDG? Given the current share price, I assume massive dilution for shareholders.
Entering into a Joint Venture or Strategic Transaction with a Third Party? given our cash position is weak I assume our negotiating position is also weak, result massive dilution.
A Management Buy Out, or the sale of the Company’s assets or business to a private investor for a very low price on a take-it or leave-it basis? Could be a way to acquire this company’s assets whilst management could also get to keep their jobs and salaries?!
Just my opinions as a long term holder
LNG Price at posting:
13.5¢ Sentiment: None Disclosure: Held
