By Tom Winnifrith, The Sheriff of AIM | Monday 1 August 2016
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
Three days ago Sky News reported that Inmarsat (ISAT) had approached Avanti Communications (AVN) with a view to making a bid. This was, as it happens, not true and today Inmarsat has exposed the lie in full. The story here is not only of the looming financial bankruptcy of Avanti but of its full blown moral bankruptcy too. This is shocking at every level, another milestone of shame for both Avanti and for the AIM Casino.
Inmarsat is explicit today:
Inmarsat notes the recent press speculation regarding Avanti Communications Group plc ("Avanti"). Inmarsat confirms that it was contacted by Avanti's advisers following the announcement by that company of a strategic review and formal sale process on 11 July 2016, and responded to that contact. Inmarsat confirms it has withdrawn from Avanti's announced process and it is not considering an offer for the shares of Avanti.
a) It was Avanti that approached Inmarsat and not the other way round,
b) Inmarsat has not taken long to decide that however much lipstick Avanti is wearing it is still a dog with fleas.
The question Avanti should now answer is
a) has anyone approached it of its own volition
b) is anyone interested in making a bid that will see shareholders receive anything?
The answer to a) is likely to be no, the answer to b is 100% certain to be NO!. To a rival satellite operator Avanti's assets have a value of far less than its debts (as explained here at the weekend) and thus the shares are worthless.
But Avanti is still trying to get a placing away so that it can get more debt so that it does not go tits up as soon as next month. So it would like its shares to be pumped higher by stories that it may get a bid from Inmarsat and others.
Who do you think fed the false story to Sky News? A story which will have seen some poltroons buy the shares and lose money as a result.
I think we all know and that is why Avanti Communications may not be financially bankrupt until next month but it is already morally bankrupt.
Never miss a story.
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