Rainbow Rare Earths Phalaborwa project shaping up to be one of the lowest cost producers globally. Watch the video here.
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To following link to PWC provides a very helpful summary of what it is:
https://www.pwc.com/ca/en/services/insolvency-assignments/what-is-ccaa.html
I found this looking up CCAA.
Not saying it's definitive by any means. But this hardly reads like the best time ever??
"Holders of common stock are typically last on the list. Quite often in CCAA proceedings, they get back none of the money they invested. Their old shares become worthless and often new shares are issued in the restructured company"......
Hi Strummer,
Not surprising I guess. The potential difference here is that the underlying asset has significant value 'if' it can be exploited economically. The question for me, as previously put, is whether the $5M allows us to ramp back up to full production and, with copper at the current price, pay back our debt and get our head back above water, or whether it will just allow an orderly sell off to maximise debt repayment but with nothing left for shareholder. I take some comfort from the fact we are planned to restart operations tomorrow. It will be interesting whether that is full steam ahead or not.
Best wishes,
Prof
I'm expecting a significant dilution following any share placement or CLN offered in respect to renegotiated loan. Its still a better route than administration as wouldn't have expected anything back.
The question is how big a placement is required to refinance and will existing PI shareholders be allowed to participate. Hopefully we can keep the pressure on without which I would have expected Rambler to be in administration now.
I think the $5m was put together hastily to reconsider their position.
Clearly it is a choice between bankruptcy and total shareholder dilution.
Well with help of rig and doing my own thing aswell by putting more pressure on them should allow us move forward.
As said wipe out is okay. If right money is needed they got
Basically, there's a good chance we are all getting wiped out.
Am okay for wipe out. long term we get there
How?? Won't all our shares become worthless?
Hi All
If it helps I am aware of a couple of companies that that got a CCAA and may be useful for your own research...
Puregold (PUR) lse
North American lithium Inc
My personal expectation is you're likely to see the approval fairly quickly....this week IMO.
In both the above examples, after being granted protection under the CCAA, they both initiated an SISP.
SISP is a sale and investment solicitation process in an insolvency proceeding under the Companies' Creditors Arrangement Act (Canada).
It doesn't mean RMM will have to go down this route but I think it's likely. So my view is the CCAA will be approved this week and then they are likely to initiate an SISP and possibly delist after 6 months of being suspended.
Generally isn't great for shareholders as in above cases. RIG will not have influenced this IMO it's one of the last resorts to save the mine and jobs and give a little time etc.
Just my views. Hopefully they pull a rabbit out.
Atb
It's a certainty.
This is administration to protect the debtors. Shareholders get nothing and unsecured lenders get a haircut.
Yes it’s adminration kinda. while we sort out nonsense
Who has actually loaned us the $5 million?
“RMMCL has entered into a conditional DIP agreement for a loan of US$5.0 million with RMM Debt Limited Partnership by its General Partner RMM General Partner Inc., representing certain senior secured lenders to RMMCL”
Is this Brad Mills lending himself €5 million so if it goes tits up, he receives the company as payment? Can anyone explain or put some meat on the bones?
Why do they even need 5m? Have they not been making any money at current copper prices?
Doesn't it also mean that as the fresh loan capital hits the balance sheet it stops creditors who are owed monies suing for settlement of their existing debts - it protects the new capital from old debt claims. Thanks Blue
Protection from Creditors means nobody can sue for payment. The new loan will be first in line for repayment before the secured lenders (who are probably providing the loan in anycase). The loan is probly for working capital to ensure the mine keeps operating before a sale.
Administration how? I have never heard of a business getting 5 Million in extra Loans to carry on with day to day running of the business? - To me they are trying to show that with the debt refinanced this would be a profitable mine. Do not get me wrong it is worrying but also promising at the same time.
Hi AJones,
I have been thinking the same thing; $5M is a lot for just backing this into administration.
Let us hope that we are not naive.
Best wishes,
Prof
I, too, am struggling with reconciling the $5 million loan for funding daily operations and other debts with the supposed impending administration; has anyone else ever witnessed a large loan to a company in order to prepare it for administration?
They must also believe there is still value on the assets as this has been secured against the assets!
It is not something I have come across before to be honest.
Looks like the Creditors are taking complete control - without the debt the company is saleable so they will be able to get back pennies in the £ provided they make the senior loan to prevent a complete collapse of the company.
Tough luck to shareholders who seem to have lost their shirts.
>They must also believe there is still value on the assets as this has been secured against the assets!
What else would they secure it against? Bradbury's pinky promise?
So, it’s adios to Rambler in its current guise, then?