By Tom Winnifrith | Thursday 10 November 2016
Disclosure: Financial Investigative Media Limited, which is not owned by Tom Winnifrith but by a trust for his dependants, owns shares in companies mentioned in this article. 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.
New World Oil & Gas (NEW) has today been booted off AIM for failing to fulfill its investment policy following the collapse of the Big Sofa RTO but all is not lost...far from it.
The company would have been booted of anyway in a couple of weeks for having no Nomad but pro tem it is no worry - being off AIM saves a bit of cash. And the company cannot do anything at all until it resolves the issue of its contingent liability for the alleged Niel Petroleum money laundering activities of the previous management team. In theory that could sink the whole ship but in practice one suspects that in a worst case scenario there will be a pence in the pound settlement.
So be aware this could be a zero. But if it is not and I#d bet a few quid that it is not this is a comany that should still have c£1.3 million in cash and £600,000 owed to it by Big Sofa. Big Sofa will still go to AIM via an RTO of another company and what is being offered to New World is that this £600,000 is turned into a convertible loan note either repayable in cash or converted into Big Sofa shares at the IPO price.
So if Big Sofa shares zoom, and followers of Optibiotix and Concepta know that shares in Adam Reynolds AIM RTOs can zoom, this loan note could be very valuable indeed. The long term outlook for New World and indeed what it does going forward is not certain at this stage. It could still all end in tears but if I was a holder I would not give up hope yet. This could still provide a very pleasant surprise one day.
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