By paying the incentive to settle the 2012 notes in 2011, SN saved the company $6m in interest, now there's a positive!! On the down side he'll pay that back on the new notes but effectively we either saved $6m or we have an interest free loan for 5yrs! SN & his buddy also have the related notes - better than money in the bank, roll it over each year & with 10% interest your not doing so bad. He ain't going to call the loans in when he's on to such a winner. Next rns will be related party notes rolled over.
Just to clarify the words inducement & charge are polar opposites in their meaning , inducement is an incentive and charge is a penalty. No where in the accounts does it mention inducement charge. Debt was converted at the request of the company & an incentive was paid by the company to convert. Simple maths 1.5 odd bn shares at 4p and $18m new notes less a debt off $112m does not give a finance charge of $99m on top of the debt as you are trying mislead people to believe. There are no major charges to come other than the debt which is detailed in the accounts. The sp does not need to reach any specific level, the company somehow needs to find the money or dilute with shares (something at present it can't do as only 3bn be can be issued). The conversion rate is set so if the sp reaches that or a specified level above then the notes automatically convert.
This is my take on it Nobull is saying we previously had an inducement charge of $99.4m, this is incorrect, we recorded an inducement expense which is recorded as a loss on the accounts. An inducement expense is incurred when the company offers an incentive for convertible debt to be converted (extra money or equity) Quite how or why we managed to record such an expense is going to take a little working out as my understanding standing Is that the inducement expense is the difference between the overall payment (equity & new loan notes) & the actual debt which in this case works out at approx $6m. 1.58bn shares at 4p (roughly $100m) plus $18.6m new 2016 notes. The debt was $112.6m. The future debt isn't going to cost any more to redeem other than the loan note value ($18.6m) plus the 10% accrued interest. The number of shares required to clear this will be affected by the share price but not the actual value of the debt, unless frr decide to incentives it & pay it off early!! No doubt I'll get shot down by Nobull as i may be talking total c**p but if they are going to make statements that charges have been made they should get their facts straight, there is no such thing as an inducement charge & the level/value of the debt is not going to suddenly double or treble. If frr make an asset sale they can just redeem the notes with cash. Convertible notes are always either convertible or redeemable.
In the same breath you say this board can't affect people buying.these shares, sn will not Change course for this board either. What your proposing is using the voting power of London to get George Osbourne to change tax policy, face facts he would smile politely knowing no one confidently commands London's voting block.
Granted your worried about the debt and performance of this company. The assets should easily cover this, if you do not believe sn is holding high cards in his hands then I suggest you stop supporting his gambling adventure. If you've bought shares here you've said you trust sn at the poker table. From my understanding he's got to report back by the end of the year our we're sunk. I would say theaters a time limit on his actions not an appointment with death.
"I don't need harbingers of doom telling me it can all go t*ts up day in and day out. I know exactly what risk I have entered in to. So, at the risk of repeating myself, give it a rest!" I am not a harbinger of doom. I have simply stated my understanding of the accounts, which gives two possible scenarios.
Revenue minus costs is a major driver of our share price performance, so to discuss one without the other is ridiculous. That is the sort of nonsense you expect from FRR in its RNSs. The finance charge heading our way is THE MAJOR COST so we want to be sure Mr Nicandros is doing everything to minimise it. Refusing to allow people to discuss it may well be the reason why Mr Nicandros does not discuss it (he doesn't feel the need to because we all appear too stupid) We might get better share price performance if Mr Nicandros knew he had to discuss these things with us. Just my view. Oh, I see you worry that other people might be put off from buying our shares if we discuss it? I strongly disagree about that.
"Nobull, you are a decamping troll. Everyone has read your views and will have disregarded them or factored them into their own risk profile. We don't need to hear them again and again. However, that is unlikely to fit your agenda!" And you are more fit to be the arbiter of that. I see.
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