Sunday 12 August 2018

LED International Holdings – yet another Filthy Forty suspension 2018 UPDATE

Our apologies are due for overlooking one of the ShareProphets AIM-China Filthy Forty companies. The RNS released by LED International Holdings Ltd (LED) three days before Christmas (HERE) almost passed us by: the company announced early in the no-one-is-watching o’clock holiday period that its shares were being suspended because it had become apparent that the Company [would] not be in a position to publish its audited report and accounts for the year ended 30 June 2015 by the deadline of 31 December.
In other words a company which turned over about £2 million in its previous year, and a little over £1 million during H1 is unable to do its accounts fully six months after the period end. It’s a good job the directors aren’t running a FTSE100 company such as GlaxoSmithKline (GSK), isn’t it!
Having predicted twenty suspensions and executions from the Filthy Forty by the end of 2015, this one brings us up to nineteen (albeit that Allenby, the Nomad, hasn’t resigned). Close, but no cigar.
So why might it be that LED can’t get its accounts out?
Could it be anything to do with the negative net current asset position to the tune of around £2.3 million, as reported for its H1 to December 2014?
Could it have anything to do with a convertible loan in the principal amount of US$1.3 million plus 9% p.a. interest which has a maturity date of 31 Dec 2015? Although it is convertible, we see in Note 6 to the Interims (HERE) that the lender (a Director) has a right to redeem the Convertible Loan Notes at their principal amount and interest accrued up to the date of redemption by a 7 day written notice to the director at any time from the date of issuance. Could it be that the lender wants to be settled in cash which the company hasn’t got?
Has it anything to do with a reverse take-over which morphed into a JV with a commitment by the company to provide the JV with approx. £5 million of working capital, as announced HERE? We were told that the company intended to finance this from equity and/or debt financing, according to that RNS but all seems to have gone quiet on that score.
Or could it just be the curse of Zak Mir calling the shares (then 45p) as high as 120p (see HERE)!
Surely it cannot be that the numbers are so complex that this little outfit with a market capitalisation at suspension (at 35p) of just £3.3 million (source: ADVFN) is unable to do its accounts within six months, is it?
Whatever the reason – and the words “Going Concern” loom large – there are all sorts of reasons to be steering clear. Quite apart from the appearance of the company in our Filthy Forty, the financial position would appear to be one worry, but a myriad of related party loans and transactions are also a concern - as is the question of what happened to the RTO which morphed into a JV and the ensuing silence as to what is happening with that.
The company said back in March 2015 that further announcements in relation to the Joint Venture will be made at the appropriate time. There has been nothing since. Now, in relation to the suspension pending overdue accounts we are told that a further announcement will be made in due course.
One wonders what that next announcement might be: the accounts? Or might it be the Nomad, Allenby, forcing a rather different update involving the first F40 trip to death row for 2016?
Of course, this could all be a temporary blip and all is fine. In which case I would be rushing out to grab not the shares, but my bargepole.


So Mr Weatherseed , aka China Resolutions LLP aka Mr John McLean ....................

Are you about to endear yourself to some Investors ?
Or Is more skullduggery and deceit In mind ?




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