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Zamano PLC – February 2018

Zamano PLC – IR:ZMNO
Share Price – €0.04
Market cap – €4.3M

First of all, apologies for the down-time on my site for the last few months. My hosting provider decided to pull the plug awhile back, I have been engaged in damage recovery ever since. Most of the site is back up, but unfortunately images and tables have disappeared. I will endeavour to try and restore the missing pieces of former blog posts, if possible.

Needless to say, not much has happened in my portfolio since. Other than substantially increasing my position in LON:LXB (which has been pinned on my Twitter time line as my top pick for 2018 – www.twitter.com/tabhaircom), I have not hardly been actively trading the market at all. In the last few weeks however, I have been paying close attention to IR:ZMNO,

Introduction & Conclusion

There really is not much to be said here. Despite its small size, Zamano PLC is a company I have followed fairly closely since it first listed back in 2007. Whatever you can say about Zamano’s former business plan (Google the company, the results are not good), all that is now water under the bridge as the company announced it would dispose of that business, see here. A more recent company update confirms that the company does indeed operate as a cash shell. So, as of the most recent update, the company now operates as a listed cash shell, with trailing twelve month expenses of €130k. This is on the back of a €5.3m cash position that is confirmed as of the most recent regulatory update.

At this point, you’re probably looking at this and thinking, who cares? €5.3m of cash on a €4.3m market cap isn’t anything to write home about. The discount seems more than reasonable, given the risk that are involved here. I would argue, that maybe a sliver of value can be extracted from the small-playing, shrewd-thinking prospective shareholders in the here and now.

If you read the fine print of the most recent update (as of 5.5 months ago), you will find the following.

The Disposal constitutes a disposal resulting in a fundamental change in business of zamano pursuant to Rule 15 of the AIM Rules and the ESM Rules and requires the approval of the Company’s shareholders (“Shareholders”). Contingent on the approval of the Disposal by Shareholders, the Company will become an AIM Rule 15 cash shell pursuant to the AIM Rules and an investing company pursuant to the ESM Rules. Accordingly, the Company will have a period of six and twelve months under the AIM Rules and the ESM Rules, respectively, to complete a reverse takeover before trading in its shares will be automatically suspended by the relevant exchange.

This essentially says that under AIM listing requirements, the company has 6 months to either consummate an investment with their current cash pile, or face de-listing. My thoughts are that if 5.5 months have passed without such an announcement, then it’s likely that the company will have no mandate to go down the unlisted route, therefore, they will have no choice but to return the remaining capital to shareholders. If you peruse the major shareholders list, I think it’s more than clear that institutions control the vast, vast majority of shares – making a return of capital the most likely scenario.

Because of the modest size of my portfolio, I have been able to take a small position in this share. I believe that something close to the aforementioned €5.3M cash balance should be distributed to shareholders in the next few weeks or so.