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Thank you Lost- that does make more sense to me
ATB Rf
Recklessferret, Casa's "concerns as to ratio" are misconceived. He mistakenly thinks that lenders calculate capacity for debt based on market price (ie. market cap, sp). They don't.
They are interested in the company's net assets and ability to repay: nothing to do with market cap. Casa used to work in IT not finance.
Hi Casapinos.
Just to take a simple view of your point and the figures cited- if the SP were 10x current price, then your concerns as to ratio would be dealt with would they not? So if the SP returned to 36p, that would resolve the isuue. And is that such an unreasonable target for the SP if all the funding was in place, given the progress that is being made with construction.
After all 36p did not seem such an outrageous price to investors when funding was believed to be in hand, even when construction carried out was minimal compared to today. I appreciate that there are "chicken and egg", or Catch 22 issues here, but surely any lender/investor would follow the point that the current SP reflects where we are now, NOT where we are likely to be with funding arranged? So I am not really sure of the relevance of this ratio to Sirius' present circumstances. This is not to attempt to diminish the difficuties however, unfortunately.
ATB RF
casapinos
I agree.
I think another equity raise is likely for enough money to reach the polyhalite seam and complete the tunnel (TBM elements only). Then they might use the tunnel and TBM conveyor (or road) to extract some product to Teesside.
Ideally, we can still hope for a government guarantee to help get some bonds away or cash-rich foreign investor(s) to provide funds. Realistically, a 1 for 10 share consolidation and further equity raises are what I would expect (if administration is to be avoided).
It really is time for CF to pull a rabbit out of the hat.
People on site are confident that the mine will proceed. Fingers crossed that current shareholders are not wiped out by the time production starts.
It remains a rather compelling business case - despite the sp.
OR
Casa, in case you didn't understand my point, creditor's calc ratios are based on book not market value....
Casa you're talkig about the market value not book value of the equity.
Do you know what the book value is?
A reminder The structure of the JPM deal was that SXX would demonstrate the willingness of the bond market to fund them initially and as as a basis for JPM setting up a "rolling credit facility". Why did SXX have to do this? Because each $500 mill. tranche of " rolling credit" would be matched by an equivalent $500 mill bond issue,ie in each cycle SXX would borrow $500 mill from JPM and subsequently borrow another $500 mill from the bond market to repay JPM . Thus ensuring that as the project advanced JPM's liability would never exceed $500 mill and by the time the last $500 mill of RCF had been borrowed SXX's liabilities to the BOND MARKET , NOT JPM would total $500 mill X 6 ie $3 billion.
The failure of this concept at the first stage underscores the enormous problem SXX now face , the problem is no longer how to get an initial loan of $500 mill but how to get at least $3 billion. Just to reinforce the problem, recent SP falls mean that the sum needed is now more than TEN times the company's worth.Had they been able to get the initial tranche away and held a market cap of ~ £1.5-2 bill as they did late last year then they could have shown a tolerable debt;equity ratio of 1: 2 or maybe 1:2.5 Anyone familiar with company accounts will know that a debt : equity ratio of above 2 is a danger sign, 10 is unheard of , on the present basis SXX hopes of a debt-based solution are now non-existent.
Mr .dt still a wishing and a hopin' . just don't buy anymore
Rusirius, read my post again....I wasn't asking you
Mr.dt, any buying by PI,s here is not going to manipulate the SP.
I will average down after a couple of similar RSNs come through. Powder dry for now.
Chilting- somethings are better than nothing,if it Means keeping the shares bottom of the draw.
Mr.dt
I applaud your sentiment but if we do get another round of dilution that could be the wrong strategy.
It may be much better to wait until things become clear on the funding front and then buy to average down.
The market cap will sort itself out - probably around the £1000m mark.
Mr dt I would like to help but all my money is already tied up here. Any chance of a loan from your good self?
I would think it would be best keeping some powder dry for a potential PI placing to support any funding, unless you have lots to throw around.
I would like to plea to long term holders to join me in a vote of confidence and affirmative belief in the company right now that we will get this done, we need to get behind the company and buy buy buy to get this share price up to a fairer value of the asset we behold. In terms of a strategic partner joining us, which we all know is a possibility we need to get our market cap up so they at least don't come in at a steal. I am not ramping here for newbies to buy in just additional support and a vote of confidence from existing shareholders. And if course I'm not expecting the likes of koh, Ru Sirius to embrace this request lol.
We have got this, 13mtpa demand says we have.....let's go!
Bond market is always open. However I would hazard a guess anyone investing would want to see see the route to financial completion, before investing. Sirius couldn’t get them away with what they were allowed to offer. Let’s see what comes out in the next month or so.
I understand why without the bonds the rcf was a no go , does that mean without the rcf no bonds ?
could we get 2/3 hundred million away in bonds now to get the risk reduced ? or is that just to simple ?
We seemed happy at the premium but JPM were not ...