lets be clear about this. Misleading is posting a factually incorrect statement such as Manas coal being too radioactive to sell, or quoting trading volumes that are factually incorrect. I disagree with hundreds of posts on here but very few are misleading. Infantile, yes, but not misleading. To accuse someone of that is to accuse them of a possible crime (see FCA box above) and MUST be supported by evidence. If no evidence is presented, this must be dealt with in the strongest possible manner.
Leed is contributing A$1.2 million of funding towards a 4 year, A$3.25 million secured convertible note financing being issued by Battalion. The note has a 12% coupon for first two years, followed by two years at 14%, if not converted
· Battalion's major shareholders are contributing to the convertible note alongside Leed
· The convertible note benefits from a first ranking general security agreement provided by HM
· HM has generated monthly revenues of between A$1.2 million and A$1.5 million over last 6 months from which the interest can be comfortably serviced. The note is convertible into equity which would result in Leed holding up to 15% of Battalion, equating to an equity interest of 11% of HM
· If Leed converts its notes into equity, the conversion price will be at a 25% discount to the price at which Battalion acquired control of HM earlier in 2014 and at a multiple of approximately 1.4 times the current base case 2015 EBITDA HM forecast
how the increased expenditure of HM has an effect on LDP. We lent them money, get a payment, and have the option to convert to equity on favourable terms in the future should we so wish. If HM spend an extra AS10m this year we will not have to spend a penny more. The lack of understanding here is breathtaking. As for more trips to Australia, thats got to be the most laughable comment ever on here. (takes some doing). The deal is done, no further input required. Percentage rolls in every year, as equity goes up in value. Please could someone tell me what LDPs additional costs are. There are none.
any future increase in value that Leed get is through conversion to equity of their loan note in HM, at a 25% discount to the price paid by Battalion earlier in the year. As the value of HM raises due to increased profits so does Leeds investment value increase. This investment is AS$1.2m . If they converted half to equity at an increased value (further discounted by their favourable agreement) they would have more than sufficient to re invest and expand elsewhere. Protected against any increase in costs, but able to reap the benefits of expansion. Thats what I call a great deal.
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