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PVCS

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gbjbaanb
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PVCS

#322936

Postby gbjbaanb » July 1st, 2020, 11:37 am

A quick one for a quick return.

PVCS, a business that used to make solar panels until China ate the market, is now trying to become a general purpose industrial, using its slicing tech to slice other things. I hope they do well.

However, from an investor point of view, the company has declared that they intend to delist. At least one distribution will be made to shareholders, one is already announced. Others will no doubt requires shareholder approval.

The sp is 40p today, and they have announced that they will return £2m (27p). But they have £7.5m cash.

So I think there's a good chance you can buy 90p worth of company for 40p.

note: its 46p today, I think the market has noticed.

PinkDalek
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Re: PVCS

#322960

Postby PinkDalek » July 1st, 2020, 12:53 pm

Some further background might assist (never having heard of PVCS in context):

https://www.hl.co.uk/shares/shares-search-results/p/pv-crystalox-solar-plc-ord-gbp0.030206

UncleEbenezer
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Re: PVCS

#323140

Postby UncleEbenezer » July 2nd, 2020, 1:11 am

Begs the question, why now? The squeeze on the solar wafer market was more-or-less a decade ago. What have they been doing in the meantime? They won quite a sizeable court case against a customer who defaulted, but even that was some years ago. I don't recollect much detail, but ISTR they closed the UK facility and one of two German facilities, all long ago. Kind-of surprising there's anything left to re-purpose.

Back then, if it had been a free market, PVCS might just have survived and even prospered. Yes, there was fierce competition from rising Chinese companies. But PVCS was cash-rich, and should have been well-placed to weather the storm and pick up some cheap assets from falling rivals. But then governments - notably Obama - stepped in to bail out their lame ducks, thus throttling what should have been stronger companies.

gbjbaanb
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Re: PVCS

#323268

Postby gbjbaanb » July 2nd, 2020, 2:02 pm

Part of it is that the court case with that defaulting customer took ages, but they got the award, and then they got most of the money, and its only now that they have received that last €0.8m from them.

They are well out of the solar market, they changed the business to slicing services to the German optical and ceramic industries, but it isn't that large a market I assume. So they are winding down a lot of it and becoming just another SME company and they don't want the cost of being listed. http://www.pvcrystalox.com/home/

They are still cash-rich, the only question is what will happen to it. I don't imagine most shareholders will let them delist and keep it, so further distributions are likely even if they are at a discount. So I think it'll end up with an offer to delist with a distribution leaving the company with enough of the cash to continue operations, and the rest returned to shareholders. If they keep £2m, that's nearly £6m returned - 70p or so. The risk is that they'll try to delist without a distribution and that will come with a shareholder revolt and a load of hassle. But I don't think its that big a risk TBH.


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