CBD - Cannasouth Ltd

[shareman]

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[Toddy]

Poor shareholders. Probably wake up to something like a 50 percent dilution of their holdings on Tuesday morning.

Better than the alternative which would be liquidation.

[HITMAN]

BackAppointment of Voluntary Administrators

28/3/2024, 5:03 pm RACannasouth Limited (NZX:CBD) announces that after careful consideration of the circumstances of the Company, including the challenges of securing additional funding and balancing the interest of shareholders and convertible note holders, the directors’ have made the decision to place the Company into voluntary administration. The appointment has been undertaken in consultation with the note holders who at the invitation of the board nominated the administrators.
The responsibility for preparing a plan for the ongoing operations of the Company with the objective of meeting cashflow positive results, has now passed to Ben Francis and Garry Whimp from Blacklock Rose Limited as joint administrators of the Company.
The administrators will be undertaking a detailed review of the operations of Cannasouth with particular focus on identifying the profitable lines of the company’s products and services. When that has been completed the administrators will be seeking financial support from shareholders and note holders to implement that plan. It is expected that the review being undertaken by the voluntary administrators will take some time to complete as the parent company and its principle trading subsidiary companies are scrutinised.
In the meantime, Cannasouth continues to support its customers with quality products that meet the strict regulatory requirements that apply to the production and supply of medicinal cannabis.

[Toddy]

Sad day. Nothing left for the shareholders. Note holders may get a few cents in the dollar if they are lucky.

It's a massive warning to those mums and dads that are invested in this segment.

[Sideshow Bob]

Sad day. Nothing left for the shareholders. Note holders may get a few cents in the dollar if they are lucky.

It's a massive warning to those mums and dads that are invested in this segment.

Indeed, sad day.

Would say a few holders in the Sharesies Brigade.

[Gerald]

~$73m in raised capital, impressive feat. Suprising it's going before the real dog GFI.

[nztx]

Gez - that's gone south in record time .. all the boys & girls who jumped in for a piece of the action
won't be happy

[Toddy]

This will get interesting. The directors took up the notes around December 23 which were secured against the plant and building assets.

So what went wrong so fast, within a few quick months which included the Xmas break.

What did the Directors (note holders) know that the market didn't.
Should have this been disclosed, and when should have it been disclosed.

From the outside shareholders dived in because the Directors showed a vote of confidence by lending the Company money via the notes.

Something smells of weed here?

[nztx]

This will get interesting. The directors took up the notes around December 23 which were secured against the plant and building assets.

So what went wrong so fast, within a few quick months which included the Xmas break.

What did the Directors (note holders) know that the market didn't.
Should have this been disclosed, and when should have it been disclosed.

From the outside shareholders dived in because the Directors showed a vote of confidence by lending the Company money via the notes.

Something smells of weed here?

Indeed, so what could ultimately unfold if things don't go well with Administrators installed ?

Ultimately it will be a decision that the thing still has some ability to fly with some tinkering under the hood, it gets sold or broken up & hocked off in pieces ; or corporate undertakers get installed to rip out as much loot as they can spy from remains (Liquidator's large lunches all duly provided by the Victim during that period) ..

Liquidation - then what - Directors get their dough back if sold or walk away with plant, buildings etc
and in the fire sale of what remains get a good deal also out of picking up the rest of the bits for a song ?

Let's face it - how's the market currently for purpose built plant & buildings for processing fancy export lots of Weed & fancy byproducts ? Ripping ahead, sold yesterday or begging for any buyer to take away at any discount unless as happens sometimes once in a bluemoon an eager bunch of familiar faces rock up wanting to take the lot off the Corporate undertaker's hands at a deep discount?

No-one mentioned any Notes - did they ?

One way of privatising the job, getting rid of costly pestly public spotlight and nosy stakeholders
by the thousands - all wondering why little is reported as happening and giving the top brass grief

So what future prospect does this operation hold out of the spotlight ?

What was used in initial promotionals for the float was pretty rosy wasn't it ?

And there are still further new operations under way even now who still see the same glowing sun & prosperity in this same industry sector & lucrative potential possible, based in good old NZ.

Who knows - if the Board, or some of the Directors (being also some of the Note holders) may still see glossy things ahead, but don't want the extra truckloads of cumbersome public listed company stakeholders tagging along with all the expense, or there could be genuine warring factions across the Boardroom table ?

All up pretty grim news for the minor stakeholder who threw their pennies onto the table from the start or on joining the story between there & now to potentially be facing walking away with zilch or maybe close to it ..

Hopefully the whiff of aroma coming off really good weed didn't impair or affect things at Board Level or some of the mad budding scientists in the Lab didn't make a grave mistake and send some really bad samples over to the Executive suite instead



I remember when I saw these Cannabis outfits being lined up on the blocks to be floated & having seen similar outfits that launched in same manner over the past 40 years - my instant thoughts were that there will be a large pile of poor sods who may ultimately lose their shirts & grundies out of these along the way

[Toddy]

If you take a look at the prelim accounts published on 29 Feb then you quickly conclude that the 31 Dec payables show that there was basically no cash left.

The entire balance sheet is a joke. Intangibles and Goodwill.

It reminds me of Enron. Just whack it on the balance sheet.