By Doc Holiday
Anglo African Oil & Gas was at the centre of market discussion last week as a revised offer by Jub Capital was presented to the company, as a tug of war unfolds for its Congolese (Tilapia) assets. Jub (the finance vehicle of Mr. Adam Dziubinski) has a long history of operating in the junior markets successfully but without an untarnished record, Dziubinski a former employee of the infamous CORNHILL CAPITAL has endured all the market has to offer. Needless to say, the latest competition to win the hearts and minds of the markets leaves punters scratching there heads as he attempts to block the Zenith Energy deal condemning himself and shareholders, (assuming he has not sold!).
The narrative in the market is Mr. Cattaneo of Zenith is a useless fool however in this instance he appears to have outwitted the city vultures in his audacious attempt to secure the Congolese subsidiary of AAOG (Anglo African) and its Tilapia assets allowing Anglo African Oil & Gas a retained 20% free carried interest. This has resulted in an unkind attack on Ms. Cope Chairwomen of the distressed company (Anglo African). In my opinion, the public claims leveled at her are totally unfair given the deplorable actions of the previous executive management team, who promised the earth and delivered sod all. In essence, Cope inherited a disaster of a company with little cash and limited options, so far she has done her best with what she has to deal with.
Anglo has been extremely clear that the company is unable to accept the offer made by JubCap (known as Hubcap for the quality of the deals it participates around the city) citing “It is not clear what entity will be providing the loan or when it would be made available or due for repayment. yet the market noise makers continue to embellish the offer making unattainable demands. Let’s look at the facts AAOG is potentially insolvent without the Zenith SPA, leaving Cope with only one option (at that time of writing), subsequently informing the market that alternative offers had failed to present a workable proposal, “certain of the conditions precedent in the Jub Proposal make it undeliverable. In particular, the Company cannot accede to the sale of the Ordinary Shares held by Riverfort nor can it defer or amend the terms of the General Meeting on 13 January 2020 without exposing itself to potential liabilities under the SPA signed with Zenith.
The company has clearly stated in its December and January RNS’s that without the Zenith SPA or the relationship with Riverfort any deal could cause total collapse as the terms of the revised offer failed to give sufficient clarity of the debt, its terms or additional insight to the flakey £100,000 at 1p offered by Jub. It’s staggering to think that a broking company with approx £250,000 of cash in the bank and assets of less than £800,000 could realistically garner the financial confidence needed to complete a deal of this magnitude leaving more questions than answers (click here) On further review I looked at Midmar Capital’s latest accounts (click here) where the FCA register shows Mr. Dzuibinski as a CF1 director in 2015 (click here) returned a total turnover shy of £300,000. So what do we know of Mr. Dzuibinski? Well, he cut his teeth in the market between 2007-13 at Cornhill Capital a notorious bucket shop, in his free time hob-knobbing around Fulham wine bars. Does this make him unable to ride shotgun?
in essence, he’s a capable young man with the world at his feet but right now there’s little to no evidence to support the public statements of financial prowess as a long and strong fund manager but rather a back alley sally kinda participant in low-level finance deals. In the offer for 10million shares at 1p there are 120m warrants attached at 1.5p over 2yrs which could be the first indication that the deal is nothing more than a spoofy oasis which in the event it is accepted it’ll become tantamount to further corporate creed.
If we look at Management Resource Solutions where a similar battle took place, with a failure to reach an agreement, instead going to war at a GM, the company and its investors realised a total loss, insolvent and liquidated, my fear here is the NOMAD puts it to bed by forcing the company to address its financial capacity against its liabilities. The market can take its angst out on Cope but in reality, she is in an impossible position and something of a fall guy for previous reckless inept management.
I hold a few shares in Zenith (nothing to shake a stick at) and do so because, Mr. Cattaneo for all his flaws has obviously acted effectively and efficiently in securing an asset his critics now wish to fight over, Bravo Andrea. Regardless of the outcome, the recent premium deal for its newly acquired Italian p/f increases the companies revenues covering its G&A coupled to approx £1.3m of funds raised over recent months between 2-3p, one has to ask is there the potential bang for its buck with Zenith and are Anglo shareholders who believe in the Congo’s jewel in the crown transhipping across to Zenith?
Finally, I acknowledge Aligns arguments and see some sense in this however sadly the partnerships and the late attempt to offer AAOG a more substantial offer have left them falling back behind the curve however I wish them well in their endeavours.
You can catch my latest podcast on the junior markets by following me here on twitter: https://twitter.com/DDS_DocHoliday
Disclaimer: This article is the personal thoughts of the contributor, it is not and does not necessarily share the view of the platform or its management.