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Without wishing to hog the board and bore everyone with long posts, IF a deal like the one cityceter proposes was to go through, you could also insist that as well as the 400M equity and 200M bonds AAL kick in now, that they also commit to providing a significant chunk of bond money for the final phase of fundraising in two years time. By then, assuming construction has gone to plan, the perceived high risk parts of the project will be completed, so a regular commercial construction loan should be available, but as a safety net AAL could be required to kick in another $500M in bonds out of the $2.5 billion, if required. That ought to comfortably put any financing concerns to bed once and for all.
All academic at this stage, but maybe someone is listening. In the meantime, while the status quo remains, it's still a NO from me.
Very well explained. I would imagine the significant II's are pressuring Fraser and AA on a similar basis. Let's hope so
Putting some numbers to citycenters proposal where AAL get 80% of the company -
At 13mta production with in excess of $1B net profit, the company ought to be worth at least $13 billion, maybe more if you consider the value of the resource on top of the profit generated. If AAL get 80% of the company, that would equate to issuing an additional 28 billion shares to them, meaning 35 billion shares in issue. That would equate to a share value of $0.37c or 29p on a valuation of $13 billion (as part of a deal like this the BOD should NOT be allowed to issue bonus shares to themselves and employees going forward until the mine reaches 20mta to avoid further dilution and when the project is stabilized cash can be deployed to buyback shares to reduce the number in circulation)
29p is more than 5 TIMES what we're being offered today.
For AAL their share would be worth $10 BILLION for a $400M investment. Surely they don't need to do any better than that. In addition SXX debt would be on the books of SXX rather than AAL which ought to be better for them (their shareholders have expressed concern at the capital they will have to raise/deploy to deliver the project) and last, but not least, owning shares in a SXX as a separate entity would allow AAL to sell down their investment in smaller chunks, giving them greater flexibility on how to monetise the return on their investment
But instead of this fair and equitable outcome a deal is being forced down our throats, generating stress and animosity and creating wounds that may never heal in the local community. Seems unnecessary when it appears that there is a way for all parties to get something from the deal. That's how all good deals should be structured. AAL will never be accepted in the local community if they shove this deal down our throat, and that's especially so if the vote is no and they continue to pursue the deal in administration ((but I firmly believe another party will come along and snap this up before administration in the event of a no vote).
VOTE NO, take the survey at www.fundsirius.com and tell your friends and family, whether they are shareholders or not, to also take the survey.
If we stick together we can raise the funds and/or fight for a better deal, where we retain an interest in the project going forward. A takeover is not the solution
That's the sort of structure they should have put in place for a deal in the first place. It's very dilutive, but gives shareholders the prospect of at least recovering their losses over time, when the mine reaches 10-13mta production. I think every shareholder would, reluctantly, accept such a deal and dilution.
I think this structure would also be preferred by AAL shareholders too as they are spreading their risk a bit better and don't have to come up with all the future funding themselves - the deal hasn't been warmly accepted by all in the AAL camp with the capital that's still to be raised to complete the SXX project.
AAL would also have earned great PR for being the savior of both jobs AND shareholders and bondholders, instead of being the villain for condemning local supportive shareholders to eternal poverty.
It's an act of sheer greed that AAL didn't offer a deal structured in such a manner and that's what has shareholders so angry. There was a way for everyone to get something out of a deal with AAL, and I think they've seriously underestimated the resentment and anger current holders feel, particularly those locally who were supporting this project for reasons other than pure economics and whose money got the project this far and would enable AAL to complete the job, but leave them in ruins.
Memories run long and deep in Yorkshire and the divisive nature of this deal will likely never heal wounds.
I know SXX are reading this board. I hope AAL are too. A deal structured as Citycenter suggests would likely receive a positive response from shareholders. Of course it's not the outcome shareholders would have wished for, but it is a way of recouping losses over the mid-term, and perhaps enjoying a modest future dividend and, more importantly would bring the community and AAL together and not rip them apart as this current deal does. AAL don't need that final 20% to make this a great deal for them. The private investor community need that 20% to avoid a disastrous outcome that will be felt for generations in some households.
Great post citycenter and a solution that frankly Fraser should've sold to AAL a long time ago.
5.5p really isn't going to cut it. I, and many others, would rather vote NO and take our chances on a rescue. If AAL cant see the merit in your proposal, someone else surely will
If AAL changed its offer for 80% of the company with a £400m cash injection, offering a bond raise of a further £200m protecting existing shareholders?