Small Talk: Max Petroleum's stance goes down well with investors
Monday 27 September 2010
Last Friday was not such a good day to be Kazakhmys, the huge natural resources company. The bankers (or spivs, if you follow the teachings of Vince Cable, the Business Secretary ) at UBS downgraded the national champion to a "sell" recommendation, on the very day that the FTSE 100 group announced a major investment in its power operations.
But while Kazakhmys was licking its UBS-inflicted wounds, another London-listed Kazakh focused resources company was assessing the implications of some rather better news.
Alternative Investment Market (Aim)-listed Max Petroleum said that the Supreme Court had reversed the rulings of the lower courts that had upheld a tax claim brought against the group, and had sent the case to Kazakhstan's Specialised Economic Court of Almaty for reconsideration.
"The company continues to believe the tax claim is without merit and will continue to dispute it through the appropriate channels until final resolution, up to the Supreme Court, if necessary," Max Petroleum said in a statement to the stock exchange. "This process is expected to take six months or longer. The company has not yet received the written ruling from the Supreme Court and will update the market on additional details as appropriate."
The group has suspended tax payments while the case is considered, but it was at pains to point out that "as of this date, the company has paid $3.1m towards the tax claim and will apply to the local tax authorities to offset this amount against the company's other tax liabilities due in the fourth quarter of 2010".
Max's fighting stance went down well with the market, with the shares putting on more than 2 per cent in trading on Friday. And that comes after a disappointing run in the last six months when the stock has slid by almost 40 per cent.
Aldermore's lending soars
And they say that the UK's SME sector is in trouble, a victim of the multi-pronged woes of a lack of bank lending, scattergun regulation and fragile consumer confidence. Not a bit of it.
The Quoted Companies Alliance, a lobby group that pesters policy-makers in Westminster and Brussels alike held its annual dinner last Thursday, which was packed with company bosses, analysts, lawyers and representatives of the various exchanges.
And the message was obvious – back off Vince. Despite only being in the job for a few months, and telling the faithful at the Lib Dem conference last week that all the criticism must mean he's doing something right, the great and the good at the QCA were loud in telling the Business Secretary to ensure that he does not strangle them with regulation.
Looking through the guest list, there were a number of bankers at the dinner, but they did not escape the sport either, with several speakers saying that the banks, despite protests, are still not lending sufficient amounts of money.
On that front, enter Aldermore, a bank set up specifically to meet the funding needs of small businesses. The "new bank" as it likes to be known, will announce today that it's lending to small businesses jumped by 21 per cent, to £302m, in the second quarter.
"It is a great result and we really seem to be building a lot of momentum. It is an especially strong performance as we have been careful to ensure that we are lending only to credit worthy and robust SMEs," says Phillip Monks, Aldermore's chief executive, who in the past has refused to say how many SME loan applications are rejected.
"We have also studiously avoided taking on more in deposits than we can sensibly put to work. Even with those restraints we are growing at the kind of pace that we feel really vindicates our proposition which is to provide savers and borrowers with straightforward, transparent and fairly priced products."
Maybe someone should have invited Mr Monks to speak at the QCA dinner.
ZincOx's recycling scheme moves on
If ever there was a poster boy for Aim, it must be ZincOx (as long as you don't mention the 46 per cent fall in the value of the shares over the last 12 months).
The company, which specialises in recovering high grade zinc compounds "from unconventional sources" fits right into the entrepreneurial mould that the exchange hopes to attract.
In recent weeks, the company has announced plans to speed up development of its Korean recycling plant, which it hopes will eventually churn out 46,000 tonnes of zinc in concentrate, processing 400,000 tonnes of scrap steel. Good for business, and the group claims, good for those conscious of green issues too, producing "no waste representing a major advance environmentally," it says.
ZincOx is in talks with its banks about financing for the project and is in "an advanced stage of negotiations", with potential partners for the development of the Korean plant.
Land in Korea is pricy, a point understood by the government in Seoul, which has a policy of buying up land and then renting out cheaply, or even for free to companies hoping to invest. ZincOx is hoping to get the land for next to nothing and says that negotiations with the administration are in "final stages of negotiation".
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