By Ben Turney | Monday 20 July 2015
Disclosure: I own shares in one or more of the stocks mentioned. 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.
It’s not fashionable to say this, but there are times when it is impossible not to feel intense pride at being British. I experienced one such occasion last Thursday night. It is deeply woven into our national spirit never to give up; a characteristic which New World Oil & Gas’ (NEW) ordinary shareholders are increasingly demonstrating in spades. While the naysayers and market abusers crowed that the desire for shareholder action would be broken by the heavily dilutive, mispriced open offer, New World’s shareholders rallied to the call for positive change in their company. As of writing, as much as 4.8% of the company has indicated its intention to join the reformed NWOGaction (www.nwogaction.co.uk).
Before New World’s open offer went through, it proved impossible to gather enough shareholders holding 10% of the settled equity in the company to force an EGM. Now that the open offer has gone through, the dynamic has altered greatly.
Where before the stance had to be confrontational, now the only pragmatic approach is to attempt to be more collaborative. The authorities have shown zero interest in safeguarding the rights of the investing public, so it is up to shareholders to look after themselves. The reformed shareholder action group will be based on this principle (though it will reserve the right to break out the pitchforks if necessary).
By its own admission, after the open offer New World has about £2.8million in cash. With 4.59billion shares in issue and a 0.08p share price this values the company at £3.67million. If built on in the right way, this could be the foundation for an exciting future, but it is obvious to all involved that fundamental changes must happen first.
NWOGaction was originally set up to safeguard the rights of shareholders and the company. That ethos has remained constant throughout. Were it not for the complexities of working appropriately within the restrictions of The Takeover Code, in relation to the uncovered naked short position in New World, the shareholder action group would originally have been launched through that.
Today, however, post-dilution and the environment has changed dramatically.
Over the coming days the shareholder action group, which submitted the TR-1 to New World will formally disband. A new shareholder action group will be launched through NWOGaction.
It is too early to join NWOGaction, but if there are any holders of New World Oil & Gas who would like to indicate their support, please email [email protected]
For the time being, there is a window of opportunity to establish a new dialogue about the future of the business. Everyone knows that New World cannot return to its old ways. That takes us all down a path of mutually assured destruction. There is plenty of scope for more bloodletting in this story, but what will that achieve?
Shareholders will lose everything, careers will be trashed, reputations will be ruined and the company will go bankrupt. When I first contacted the action group last Thursday, I wrote that I am mentally prepared to write off my investment entirely. This is true, but I would much rather see New World achieve genuine success, which has proved so illusive in the past. It seems a growing number of people agree with me.
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