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By Tom Winnifrith, The Sheriff of AIM | Friday 30 September 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.
Servision (SEV) has today announced its interim results and they are dismal. The company is bust and why it's advisors (Nomad Allenby, broker Belfort Securities & PR himbo Christian Taylor Wilkinson at Cadogan Leander) do not call it a day and walk defies belief. It shows all three are morally bankrupt.The results are analysed in a bearcast special HERE. But I flag up in itw own right a loan Servision has taken from Yorkville which seems to be the new, most expensive loan , in AIM Casino history - at 33% - it is 5 percentage points dearer than the loan the FRAUD African Potash (AFPO) took out from Katrina Clayton, the wife of its FD. Frankly Servision would be better off borrowing on Christian T-W's credit card and splitting the difference.
On 7 July 2016 Servision extended a facility it had with death spiral provider Yorkville and borrowed $786,500. Sadly it only saw $551,846 as Yorkville stiffed it with arrangement fees of $162,825 and also forced Servision to clear the remnants of an old loan. But let us use that $786,500 number as our base case - it is repayable in one year and the headline interest rate is 12%.
But add in the arrangement fees of $162,825 to the interest costs of $94,380 and the total return for Yorkville is $257,207. And that makes an effective rate of interest 32.71%. The interest I pay on my credit card is c18%.
That a PLC can only obtain credit at such outrageous rates is an indication that it is either bust or a fraud or both in the case of African Potash. That Servision is paying an even high rate than Potash tells you all you need to know.
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