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The interest payments are not relevant, in my opinion, because they were not going to do it for nothing and the term was extended to a time when POG, will ( or should have adequate resources ) I don't know how the $12m inflow supposedly works, and can't remember the exact details. My point is. I don't think this is a worse deal than the original convertibles. I am not forever saying that the first convertible bond offering was a good deal for anyone but the bondholders, the reality is, we needed the money, and the company was not on a great financial footing.
Now if that was happening now, I would shout out loud, because, in my opinion, we are ( except for the now normal and usual with POG Shenanigans ) in a much better financial footing. And all things being equal we should be very profitable and cash generative.
The convertibles are not due till 2024, so its the other bonds in 2022 that we need to focus on. All my opinion.
The accounts say "$12M" net cash inflow from the from doing the transaction, but don’t account for the $10M new interest outflow over the period under which they would have held the old bonds. Therefore, effectively nothing was received for doing it, but a lot of additional items were given. Not the least of which was not reducing the debt by $100M, $50M additional interest payments, and I wont go into the rest.
Updownflat, it was increased to $125m because they needed the extra cash, They were not awash with cash and had to borrow extra for Gazprombank to lend to IRC, What do you mean about, no incremental cash flow. I haven't done the maths, but I would suggest that there are less shares to be issued, on the new terms than would have been issued on the original amount.
Bear in mind, the bondholders are the very people who forced the hand during the rights issue. Personally, I don't know why the board buckled to their demands, because if the company had went bankrupt or into administration, I don't believe the bondholders were in that much better a position than shareholders, unless of course if some of the bondholders were connected to someone like UGC who wanted to get there hands on the asset for next to nothing.
Now, without the full facts, it is hard to make a comparison, but all I would say, is Peter and Pavel, fought to keep control of the company, by "supposedly" underwriting the rights issue, but, I have never seen ANY, evidence it was there money, I just remember reading about the put and call options, and I remember recently Pavel buying more shares at about 13p.
So in a nutshell, I don't think everything Pavel did, was against shareholders, although I do not have all the facts.
Would be interested to see yours and other interpretations of what actually happened.
Also lets stop explaining to much detail, I want the SP up not down.
Rusty,
different exchange rates and different amount of capital $100M vs $125M. Also there was no incremental cash flow.
Updownflat, if they converted last year they would have converted at about 8.5, the new conversion price is about 13, so please explain how pis have been shafted. ? Pox probably wouldn't be in the position they are now, without the bond money.
Any early interest payment discounted at only (T5YIFR) average to achieve conversion is just more theft from the PI's. Lets see how things develop, but right now prosperity and the board have a shady track record and as a shareholder I would like to a clear understanding of their intentions before I would consider voting for them.
Not if they have control of the board, as we have seen in the past it is not beyond POG to do transactions for which they get no consideration under english law.
pretty sure it would involve a haircut. It has to be attractive for both sides.
Are we not just speaking about discounting the Future value of money for inflation (Money is worth more today then in the future), i.e average FRED (T5YIFR) is around 2.5% which would just be normal for the PV of money. Or are we talking about them taking a 50% haircut.
Hi Updownflat
slightly incorrect interpretation.
It was the fund manager of Prosperity's understanding that they would provide a sweetener for the bond holders to convert early. Obviously they would discount the future 8% cash flows so benefits both sides I imagine.
Please remember also that article 19 is a standard clause in many companies AGM's to allow up to 1/3 issuance of new shares at any time. including other gold miners such as Hochschild.
I know that Prosperity are interested in the long term share price growth of POG as we all are- so do indeed have their interests very much aligned with our own. Please see also the last RNS relating to their action.
So POG agrees to unnecessarily pay them $50M worth of interest (since it could have just converted last year), and so now we are voting to see if they get the $50m now or later.
Prosperity hmmmm....... certianly not for PI's
Sorry I meant conversion plus interest now instead of conversion plus interest over four years.
mdunsire,
is this part of their plan if they win the vote ? They get their money back now, plus interest and conversion instead of waiting for four years.
or the shareholders
At whats he benifit to the company or us of doing this ?
Discounted at an agreeable rate of course.....
The green leaf as suggested by the prosperity fund manager would be the NPV (net present value of the 8% interest payments until the normal conversion date or something like this..,
Hi Kenz
I am still very much here and you will have hopefully seen my messages following my call with the fund manager of prosperity. I am also in contact with Lawrence from this board who is planning to go to the share register this week.....
It must be the 'greenleaf'
Am I the only one missing our new poster - the trained Fund Manager?
From out of nowhere he posts 41 times in just 4 days, but then it all goes quiet.
What can have caused this worrying silence?
Ah, of course it is the weekend.
I guess the Hedge Fund he works for don't pay overtime!