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Random thought (then off to bed)
Sale and lease back of the shafts.
Sell for a pound, someone pays to get me built (stand takes risk)
Then hits us for premium rent for the foreseeable.
Not dilution ( but it is really)
Gordon Bennett...
Your back, we’ll be having Jim Glickenhaus next... Good to see you back.
ATVB
GK
Thanks for sharing your thoughts,
Frustrating that the $2.5B for the 2nd bit can be likely secured as debt.... but only after we’ve secured $600M which I suspect will be very painful.
Onwards.
Hi Aubery.
A 'share' of some sort. Be it at Sxx level or project level (eg hive off YPL say) - impact the same aiui. 'Partner' suggests equal legal rights in proportion to each partiy's stake size. If it's Sxx shares then Sxx BoD should retain managing this. If at project level maybe a different structure of power. Much to chew on.
We'll see.
Wooden hill.
GK.
mmmmm that's a little more expensive than I was hoping for !!!! be happier with 15% and less warrants but e all know beggers can't be choosers ????
Come on Chris you can do it !
GK
Good for thought. I get the bonds stuff.
But the partner? Are you suggesting they get shares for their £155M?
Hi FFC. Re your 16-05:
"Anyone have a clue what the warrants might add to the 15% ?"
Yes I've thought about that and I think maybe they could get that to work within a debt component of the First Scope. They may go down the debt route for all, for part of the FS or not at all - they may get nothing to work. A model anyhow:
Anyones' guess as to what they may come up with but to me what looks to have a decent chance is a combination of a partner coming in for a portion of the FS, say 1/3rd*, with the balance beng from a sweetened debt offer.
Some £310m ($400m, 2/3rds) at (a what I think plausible) 12% rate with warrants attached would sell to those who have shown previous interest. But warrants will often expire worthless so I think the package will have to have generous terms. Offering potential gain of a good 50% above the total debt interest due. Say it's 5y bonds that would be some £185m of interest. So holders would want some £90m of gain from the warrants as a reasonable outcome for them.
Pricing? A balance with keeping the new issue arising from warrants as low as possible for the co whilst also making them attractive to recipients. I wouldn't expect an exercise price higher than 5p* in the present circumstances and the outcome a few years on for warrant holders would centre around a warrant price of 5p (the Sxx sp at 10p and a 5p gain for warrant holders). Getting £90m profit at 5p equates to 1.8bn warrants issued but the holders have to stump up £90m to the co to realize that.
For the partner they invest some £155m ($200m), again I would not think they would pay more than 5p* for their stake, so assuming shares then 3.1bn new shares.
Timing: the gain for warrant holders would be predicated on the co achieving the aims of the FS - shafts and drive 1 (not a certainty) and then being in a position to get the Deferred Scope. By then and with exercise the total issue would come out at some 13bn when all is added in. At 10p that is Mcap of $1.3bn. Would it be more? Project NPV is far higher but conversely that possible Mcap is also a large five fold jump from today's and there would still be a long, now delayed, road to full production.
* Asking for more than around $200m from a partner would I think be un-achievable when all concerned know that the WS mine can very easily become available for next to nothing via the route of those watching doing just that.... Nothing. An exercise price too far above the present I doubt would get much traction, it has to be close to the present sp. The same thinking would apply for the partner AISI.
I think they could pull this or something similar off, there is a degree of mutual interest. Enough? A great pity if not.
GK.
It’s not all black and white ffc, people are quick to blame and let’s be frank none of us on this board have been privy to the st2 negotiations.
I am still here taking each day as it comes. I have put my faith in CF and I will afford him the time to do what he needs to do
All good here, hope you are well too ; )
Hi Stanley
your 16.19 , spot on ,but all to easy to forget for those it suits ! ( or those that need someone to blame )
And Aubery was right when he said that the path CF took was for speed and minimal dilution ! ( sounds like a pretty good reason to me )
Hope you are well.
ffc
still, I speak for my self here, when I say that at least I've still got me..............!
That you have Chesh and your sweaty pastel coloured sweatpants too!!! You kidder ; )
I give up but move the bar back a bit to hear all the finance bit
I know Stanley.........!
still, I speak for my self here, when I say that at least I've still got me..............!
All the best (sweat pants :()
https://event.on24.com/eventRegistration/console/EventConsoleApollo.jsp?&eventid=2133980&sessionid=1&username=&partnerref=&format=fhaudio&mobile=&flashsupportedmobiledevice=&helpcenter=&key=1CBDBC9E51DDBE94558C259077A35C28&newConsole=false&text_language_id=en&playerwidth=748&playerheight=526&eventuserid=260972579&contenttype=A&mediametricsessionid=218287435&mediametricid=3008249&usercd=260972579&mode=launch
Try this I got in a bit late so in to early this time
ffc
if still wrong then it's 22 minutess in
Oh the irony Chesh, just wish the going flourish had happened in early August 19, things could be very different now.
Onwards and downwards though ; ) we carry on regardless
Whatever the solution it won’t be simple to understand....anyone read the prospectus.....jeez
I need to listen again to the call you’re right ffc
I from the slide deck they are undertaking 2 paths to the critically important $600m. A Financial Investor Process and a Strategic Investor Process.
Once this is sorted it will the be a RCF type instrument for $2.5B (debt)
I hear you Aubery but CF did say in the Analyst call that they were talking again them ... 22 minutes in
https://event.on24.com/eventRegistration/console/EventConsoleApollo.jsp?&eventid=2133980&sessionid=1&username=&partnerref=&format=fhaudio&mobile=&flashsupportedmobiledevice=&helpcenter=&key=1CBDBC9E51DDBE94558C259077A35C28&newConsole=false&text_language_id=en&playerwidth=748&playerheight=526&eventuserid=260972579&contenttype=A&mediametricsessionid=218284433&mediametricid=3008249&usercd=260972579&mode=launch
I'm not prepared to give up on that one yet
ffc
You know I see an add on this very site Stanley..............!
pertaining that the US Bond market is going to flourish............ :()
All the best (Yep........... made me laugh :)
By all accounts they could've delivered it John.............!
the goal posts that Aubery mentions weren't move in their favour is all............... :?
All the best (beggars belief.......... we move on :()
Don’t forget when CF set the goal posts for st2 the political climate was much more stable.
There is no getting away from the fact that brexit coupled with USA/China trade wars have significantly impacted st2 funding.
Cannot see it ffc, those wanting to lend $500 knew it was part of ST2 which unlocked the RCF. New finance is split across Initial Scope and Deferred.
You have to wonder why JPM took the job on if they couldn't deliver it ?
Presumably their expectation ( miscalculation ? ) was that a deal would be done. Which doesn't say much for their acumen in my book and can't have enhanced their reputation.
Where is the point in taking on a job and then pulling the rug, although I suspect they got a tasty fee regardless.
dead right Chesh so hopefully the original bond purchasers are still willing ? and with JPM not in the mix I guess it could only fail if the strategic investor didn't like it ?
Anyone have a clue what the warrants might add to the 15% ?
ffc
Why would JPM not accept the addition of the warrants, on top of 15% coupon..........?
this is what actually caused the ST2 to fail after all...........
All the best (Agree........... we move on :)
Speedie,
This stage two funding was the most (still is) important factor in determining value for the PI (LTH). Taking CF at his word, the stage 2 lenders did not like the risk of the shafts and the shaft build contracts. Risk appetite should have been determined prior to going to market... maybe goal posts were moved, who knows. Whether it was JPM that led CF or vice versa we will never know. But CF has been paid the big bucks and carries the can, not JPM.
My view is that CF was overly ambitious in trying to prevent dilution and bring poly 4 to market at break neck speed, very noble. But, ironically, this set back will result in everything he wanted to avoid... big dilution and delayed operational mine.
We move on.
"Yes, but WHAT'S IT TO YOU??"..........
it's a wage..............!
All the best (simples :()