It’s all gone quiet on one of the hottest oil and gas plays out there. Currently Echo Energy (AIM: ECHO) are suspended pending a big South American transaction that constitutes a reverse takeover under Rule 14 of the AIM Rules for Companies.
Now there’s a lot of rumours flying ’round out there about just what’s going on. I can exclusively reveal that sources are intimating to me, from many different quarters, that there may be a big ‘numbers’ CPR on the way. And I mean big……. The company ‘maybe’ raising cash, the whispers, although not confirmed, are a £15-£20 million pound book-build (Placing) underway. Indications of a placing are many not least they’re on a ‘Roadshow’ touting their wares around the City. Another sign that something ‘financial’ is a foot… Is that a good thing? Well at this stage only time will tell.
However as a share holder I’ll tell you this: I am concerned that this book-build may involve Vulture Financiers, come on down Primary Bid, you’ll all remember them as the hat changing Darwin Strategic, Henderson, Lombard, all one in the same. I’ve emailed Darwin head honcho Anand, sadly Anand has failed to reply. Silence of the guilty. Their possible slice of the placing pie, £4/£5 million of discounted shares will hit the market from day one. Not good news for LTHs. Darwin have fooked over many a company over long periods of time, Ascent Resources (AIM: AST) being the latest example. Once these blood-suckers get their teeth into a company, good or bad, then it’s a racing certainty that problems develop. Strong management is needed. The next thing we know Clive Carve ’em up Carver will be on the Board! That will be the Death Knell and time for me to depart, rather smart.
As a shareholder, whispers that a whole host of bucket shop shysters may have been given a slice of the discounted placing pie, too many to name individually, don’t concern me too much, even though one of the bucket shops is ‘rumoured’ to be under investigation by The FCA. The whisper is that the Placing is at a 15%-20% discount. That means that there will be an overhang when ECHO return. I am hoping that the more ‘sticky’ Continental Investment Partners are involved… That would be a good thing.
Of course company’s need cash to progress, that’s a self-evident truth for a new company. Particularly one with a superb management team like Echo. However, when companies turn to Vulture Financiers the next thing we know they’re on all the pump and dump forums, such as LSE, Podcasts & Vox Markets, whose share-holder base has two well-known Darwin Strategic traders. Once you run with the P&Ders you lose credibility with LTH’s.
I’d also urge investors to listen to the ‘right’ people such as Malcy Graham Wood, Probably one of the best oil & gas analysts out there. I did say to Mr J Parsons quite some time ago that it would be a good move to stick Malcy on the Board…. Rumour is that some of these assets may have been introduced by him. This guy knows his stuff. Although I don’t ‘Have it’ with Malcy, he is respected by me as a professional. Knows his O&G. I believe there’s a presentation this very evening. Anyone there should ‘grill’ the lot of them.
Aligning your interests with share holders is the key to success. That’s a fact. AIM is littered with companies who only use retail investors as the financial meat in their sandwich. Just what has made them turn to the Vultures isn’t known. It could just be a quick financial fix trying to get Echo back out of suspension, asap. If it’s that then say so. Of course they’ll come out and explain. If it’s a one-off, then fine, but if a pattern starts to develop then problems of the ‘Ascent’ kind will rear their head. That’s a fact! So let’s hope the management take it on ‘board‘ their Board!
Echo has strong support from LTH’s and good, honest, genuine retail punters. They have a huge following and everyone, including the Board, wants it to hit £1. Knowing those in control, I believe that this is quite possible, any success with the drill bit will rocket their SP. There are a few quality O&G plays on the London AIM . Echo are one of a handful of companies with proven value driven corporates. Let’s keep it like that. Stay away from the darkside…. Otherwise Danksy is Offski.
Now I know that this company actually listens to its share holders. As evidenced by their communications and the fact they quickly ditched their previous Broker who was selling while telling people to buy. That’s a good sign… So if you’re reading this, a solution to the Primary Bid/Darwin problem is thus: Whatever slice of the pie these fookers take lock them in for 6-12 months.
Hey but who am I?
I tell it as it is. Good or bad. Which is why you’re reading this!