[Logan]

@dileepvn, you are 100% right.

My observation was about what he’ll do with the PW cash. Obviously the price was manipulated and there’s no denying that.

What I observed was that he hinted that they are looking at acquiring companies like how they did in the past (once all the issues are resolved). Maybe he wanted cash to do that and maybe the first tranche from the LOC will not be sufficient.

Yes, the AGM was a total disappointment and he avoided all the important questions. The callers also didn’t ask him any important questions.

[profile inactive, exited bcg]

@logan
I am not at all convinced the PW cash. I feel if they had solid plans (other than plans for their own personal benefit), they would have clearly communicated it and we wouldn’t be left speculating.
It is not that callers didn’t ask him important questions, but they did not get an opportunity to. Anyone who attended the meeting would remember that there was no option to raise hands/ask questions during the AGM. The callers who asked questions, I feel, were pre-arranged.
Anyways, I am still hoping for the best outcome.
But if the price manipulation continues, we will have to consolidate and raise the issue with SCORES. After all, together we are now strong in numbers and strong in our collective holdings.

[nitin_asce]

I agree with Logan that SKR is looking for a acquisition and a small hint was dropped in the agm.
Axis issue-i know how banks work. So money is only paid when final agreement is in place. Now we see that BCG paid 5.5 crore and axis lawyer avoided the question because he can’t give false information to court. He confirmed he did not get any information from axis whereas he might be fully aware of the issue. So its only matter of time before its sorted.
LOC and warrants- it feels very painful for such huge dilution of equity. But if we see the positive point company will get access to lot of cash. The other wild guess I have is maybe its kind of backup plan to LOC since there must be some time frame to pay for DAUM. Maybe rathi_b can clarify, I think in one of their meetings with SKR it was mentioned that dilution in equity will not be significant.
However in worst case even if dilution happens, company will have access to money. We might see axis and daum closure plus 30% revenue increase as mentioned in one of the concalls. So actually my forecast future return will be lower due to dilution but positive is I may get that return on stock much earlier.

Now coming to operators, they are making money. If we observe from video above it is confirmed financial is all right and only issue is operators. We also see steady increase in retailers entering the stock. So my own thinking is it may not last, when demand increases automatically operators will be out. However we don’t know when and it is testing our patience.

[Raj]

Dog fight is getting very intense on Mc forum.. 😂…

[Rathi_b]

We as the Hyderabad investors again reiterate that from the documents and meeting we were privy to and have attended, we expect one or many of the outstanding issues to be sorted before March. The last time we were there at the office LOC was in the final stages it looked like they could have got it operational by now. My only concern is that these warrants shouldn’t be the reason for everything to be delayed. They can do it again later in future when the issues are sorted out, but to keep us investors in a state of dismay and operated play is not right. I again reiterate the last time we concluded our meeting with SKR we expected the LOC to be operational by now. Just saying if this warrants issue is not approved we should not again be kept trapped like this in the near future. The management and other people in the organisation have enough money to raise their personal stake in many other different ways. But to keep us waiting until the warrants are approved is not fair.

[sac6310]

seriously i don’t understand why they always keep shareholders( who had invested in their business, not traders) in dark without informing what is going on like still they had not officially informed why these warrants had been issued. Hope they improved themselves in near future in regards to pass on information to their shareholders.

[buffet]

@rathi_b & team: any possibility of meeting SKR again? May be first/second week of February?

[nitin_asce]

Let me give you an example nobody from axis Bank can approve settlement if bank knows the company is raising money and can easily pay their whole loan amount. He will loose his job or maybe accused for taking bribes.

So some things have to be done sequentially and we as retail investors will be last to know.

[Rathi_b]

But Sir, the amount that has been raised early last year for this purpose specifically can be put forward to settle it. The new issue is for something we have no knowledge about. Yes we would like to plan for another meet with SKR but not before Valentine’s day. Let the next hearing of axis complete and let them have another 20-25 days to sort this out. But yes we will certainly plan for one sometime mid or end of next month. Right now we need to just pray to almighty that good sense prevails in human beings and that they will take steps for larger good and not just personal gain at the cost of small hand to mouth investors.

[Logan]

@nitin_asce, I think the original loan amount was 41crs or something and the ots was 24crs. Including interests, BCG maybe has paid more than 1.5x (60-80crs) the original loan amount. Will the judges consider this?

Out of 24crs, 8-9crs are pending and the date has expired. If they put some penalty it should not be more than 12-15crs right?

In one of the orders (the lengthy one) I guess it states that Axis wants that 41crs but in the December order it states Axis is asking BCG to pay the full ots amount. I maybe wrong in understanding this but what amount is BCG supposed to pay?

[tanv151]

What if the both Axis and BCG have agreed on a particular amount to close this case and SKR has the signed agreement? He would have learnt from his mistakes, I am sure.

If one agrees it is possible, then the obvious question would be ‘why did Axis’s lawyers not admit it in 18th Jan hearing? Instead they said, they haven’t received any instructions from their client i.e., Axis.’

Now put yourself in judges position, would you not ask for the agreement copy if both the parties said they have arrived at a settlement amount? BCG saying we have reached the solution and Axis lawyers saying they don’t have instructions could be a game plan to indirectly push the matter to another date, with the hope that warrants will get approved by then.

Just some food for thought… As much as I dislike the warrants issue, I want it to get approved asap, so the other issues can get resolved. Yes, the warrants are going to dilute the value largely, but even that diluted value is going to be in multiples of the current market price.

[vgsatwork]

I tend to agree with Logan when he says that if SKR wanted to raise his stake, he could have done the same in the last couple of years and need not have waited till now to try and have the stocks allotted to his B team @7.7. If I take a step back and see the entire chain of events, Oak wanted an Exit and an institution was to pick up that stake. It never happened, instead we had seen a stream of news flows including Consolidation of all subsidiaries under one umbrella company, LOC, BDO audit,Daum settlement, Loan closure, PO to Muskaan,Analyst meet, company presentations, etc,. Eventually when Oak exited fully, the news flows stopped or the developments surrounding these news events have completely stalled – be it LOC, Daum, Axis loan, Consolidation of subsidiaries, etc,. But the net result is that Oak got the exit it wanted and Muskaan ended up holding roughly the same amount of shares that Oak had by Q3 FY20.

Few months down the line we have been told all of a sudden that company is raising 265 crores through preferential warrants and this time not much of a news flow and over the next 1 months amidst heavy trading, the net result seems to be Exit of G gang. Once the SHP has been announced, the daily trade volumes have come down significantly..

I am beginning to think that the entire PW is a charade and the warrants would not be issued – may be disapproval from exchanges or may be some other last minute financing arrangements for the required capital and company would change it’s mind and inform the exchanges and investors accordingly. My guess is that News flows from last 1+ year was to ensure certain set of large shareholders get an exit and a group of entities who act in concert with promotors have been created. If you look at the AGM voting, you don’t see enough NO for PW issue’s that corresponds to G gangs known holding, which suggests that the Gang was Out before the book closure date of 21st Dec itself giving the promotors clear edge. If you closely look at the voting results, even amongst the promotors, there was no unity in terms of their voting when it comes to PW allotment. That speaks volumes..

But what could be the end game? – Not sure. But the promotors are trying to create a group which would not be part of promoters, neither have a board representation, but would always act in concert with Promotors.

[Myshport]

Reference #10197 regarding the complaint to SEBI.

In all earlier cases, SEBI sent the complaint to the concerned company for its comments and no further action was taken by SEBI. There have been numerous cases in the past where complaints were raised by the shareholders and, instead of investigating SEBI just forwarded the complaint to the company.

It is a very sad state of affairs that the Brightcom Group lacks proper Corporate Governance.

We will have to request the group of investors, who reside in Hyderabad, to take up the Corporate Governance issues with the management during their next meeting with SKR.

[VALUEBUYER001]

One SEBI 6000+ companies, it can only email to company. That itself is difficult with limited staff

[nitin_asce]

@logan see the question here is does thr borrower has capacity to pay or not. So ots is made when borrower does not have capacity to pay.

Generally these agreements have time frame and bankers do allow some additional time to pay if borrower is really facing financial crunch.

But in this case how BCG will justify financial crunch. The other thing if time has passed legally previous ots agreement is null and void.

Judges in nclt will try utmost best so that both parties can themselves arrive at sgreement as this is best solution.

[Logan]

Thanks for the reply @nitin_asce.

Could that be the reason he didn’t want the LOC to come to the parent company? If it came to the parent then Axis could’ve blocked it till the matter was closed?

So maybe that’s why they didn’t concentrate on the standalone business all these years, if they showed profits then he’d have to pay more to the banks. Now since they are settling with Axis he can start concentrating on the standalone business again and maybe that’s why he’s raising funds? Maybe acquire that company Tryan where Mr.Pisipathi is the CEO. He did say that Mr.Pisipathi is working on a hardware related project and because of the pandemic they are taking it slowly. It’s an agritech company.

Also, what if both parties don’t come at an agreement? What happens then? In many other cases they end up liquidating the company right? Will the same happen here or will the judges order BCG to pay that 41crs with some penalty?

If he didn’t want to show cash then why is he raising PW money? Axis can block that also right?

Sorry for asking these many questions.

[vgsatwork]

@Logan

Agree with your views that BCG might be trying to focus on growing standalone business(since the market currently valuing the BCG primarily based on the audited numbers of standalone business) once the Axis loan is closed so that banks would not claim full loan amount instead of OTS money. But he has been having the 31 crore from PO that he could have used and settled it Axis immediately (moreover Axis also has freezed it to ensure that the 31 crore does not get utilised for any other purpose other than to clear their OTS), but he has not done that. Also, he has opened up the talk of additional 265 crore coming into the company through PW. May be Axis is not agreeing to settle for 31 crore OTS and demanding full loan amount to be cleared looking at the news flows of the past 1+ years.If that is the case, then need for additional fund of 265 crore makes sense.They can pay off Axis their full loan amount and use the rest for their growth plan without getting debt on their standalone business books.
Again, easier way would have been to take loan from subsidiary and close the Axis loan and then with a clean books, raise LOC for their overseas business and raise equity through preferential route to an institutional investor for the new growth area that they are targetting for in their standalone business..

[nitin_asce]

@logan this can be a reason. But we won’t be knowing. The only issue is mr reddy don’t want to pay say 35 cr to axis.

I give you an example reliance factory was damaged in the early years. Experts claimed it will take 6 months to restart it. Mr Ambani directed his employees that he want it in 20 days and they can spend money on charter plane also to bring equipment and no questions will be asked. The factory started on 22nd day if I recollect correctly. They might have spent twice amount in refurbishment of factory but earned much more in next 6 months by running the factory. However here I think brightcom is behaving just the opposite of what Mr Ambani did. For just saving 25 cr they have kept share price languishing. Suppose they have paid 35 cr to axis, and then alloted the warrants the amount raised would have been many times more.

On standalone business I think it provides services to subsidiaries and hence done on cost plus basis. They can anytime increase cost of services and move money from subsidiaries. That’s pretty easy stuff.

I think nclt is just bargaining tactics by both parties. Do we think mr reddy will let go of bcg for 35 cr rupees and that zlso company has to pay and is not coming from his own pocket. When you analyze the situation we will make conclusion of what is going on.

[nitin_asce]

@logan My judgement says there is a very good compelling reason for warrants otherwise no promoters would like to dilute there shareholding.
I don’t see any example of such dilution in share market. I still think but not sure that this is a backup plan.

Rest I do believe in technical skills on mr skr like lycos life. He is investing in agritek and I have read article like mr bill gates, Elon musk etc several of them has bought lakes of acres of farm land and are still buying. Still not sble to connect the dots but there seems to be a very strong correlation these intelligent people are able to see and common man like us are not able to understand.

Do let us know if you come across any further article on this topic.

[VALUEBUYER001]

Bcg dragged axis just to just to allot PW to proxies @;one one eighth of book value.they can close daum in a day, but only after their pockets filled with pw. After their goals are achieved axis, daum are a days job, which the peon of BCG will complete in less than sn hour.

[Author]

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