Member Info for Cranleigh

I did say “surely you can understand” some basics of finance, but clearly either you can’t.......or claiming not to understand and employing twisted logic suits your agenda of knocking this company, its management and its financing plans.

Oops!

In the case of a mine....

It’s really very simple, SL...

Unless the result of any new share issue remains, in whole or part, as cash in our balance sheet or the company liquidates resulting assets (difficult in the case of a men) new equity obviously can’t help pay back debt. Surely you can understand that?

And in the worst case, say the lenders need to call their security and their loans plus unpaid interest amount to $4bn at that moment.

If they can sell the business and/or its assets for at least $4bn, they emerge without a loss. Whether more shares have been issued or not matters not, neither does any leverage ratio. The arithmetic is that straightforward, it’s a simple subtraction.

SL, I could have sworn I saw a post from you this morning saying we had heard the last from you on this topic!

"IMO the underlying reason for the apparent failure of the new three-tranche ST2 proposal was its inability to pay the debt back AT ANY TIME AND UNDER ALL CIRCUMSTANCES because it had no way of collateralizing itself."

That may be your opinion, but unless some of your much-wanted new equity remained as cash, how could it contribute at all to debt repayment?

Your leverage argument might be relevant to a long-established company with an earnings history; this lending opportunity is more of a project finance one where leverage is frankly almost totally irrelevant.

Lenders are looking at projected future cash earnings to repay them and the interest bill - hence for instance their requirement for TorPs, and the cautious pricing/tonne assumption of the MLA consortium. And their insistence on risk transfer to contractors reduces the risk of build cost overrun.

If for some reason SXX gets into trouble, the lenders' security will lie in whatever the company and/or its assets can be sold for.

In my opinion, for what that's worth, it is way more likely that (a) IPA didn't come up with the initially expected level of guarantee and wanted it phased last, and that (b) SXX got fed up/cold feet with the MLA dragging their feet and/or wanting to impose expensive terms as our cash started to run low, and brought another player to the table.

SL, I could have sworn I saw a post from you this morning saying we had heard the last from you on this topic!

"IMO the underlying reason for the apparent failure of the new three-tranche ST2 proposal was its inability to pay the debt back AT ANY TIME AND UNDER ALL CIRCUMSTANCES because it had no way of collateralizing itself."

That may be your opinion, but unless some of your much-wanted new equity remained as cash, how could it contribute at all to debt repayment?

Your leverage argument might be relevant to a long-established company with an earnings history; this lending opportunity is more of a project finance one where leverage is frankly almost totally irrelevant.

Lenders are looking at projected future cash earnings to repay them and the interest bill - hence for instance their requirement for TorPs, and the cautious pricing/tonne assumption of the MLA consortium. And their insistence on risk transfer to contractors reduces the risk of build cost overrun.

If for some reason SXX gets into trouble, the lenders' security will lie in whatever the company and/or its assets can be sold for.

In my opinion, for what that's worth, it is way more likely that (a) IPA didn't come up with the initially expected level of guarantee and wanted it phased last, and that (b) SXX got fed up/cold feet with the MLA dragging their feet and/or wanting to impose expensive terms as our cash started to run low, and brought another player to the table.

Scotty’s recent posts seem to disappear almost immediately. I guess there must be a sensitive flower....

I can’t agree with you there, Mr dt.

He’s not getting boring, he got boring a long, long time ago.

In fact not even boring - more bong (boring with the Really Interesting letters removed).

"more flexible and attractive solution to its stage 2 financing requirements"

Can you even read?

of the switch of shaft contractor.

When CF thinks he is being taken for a ride or strung along, he doesn't hesitate to switch horses. Determined and ruthless action, in this case hopefully for better and more flexible terms - including perhaps the ability to fix the $4-600m issue later in the piece on way better terms for shareholders.

Sxx4me, just in case you wonder who reported your post, it was me

Terrific point, Jimbo - hope it’s true!

Got to agree with LL that some would yesterday have heard of the “pause”....but not the alternative being pursued.

Fair point, Jesse.

For my part I tend to respond only in case some are taken in by his insistent nonsense and and influenced to make their investment decisions accordingly.

Now we have lenders “exposed to shock”. More nonsense - if lenders lend $3bn, as I believe and hope they will, their “exposure to shock” will not be affected one iota by our gearing ratio ie the issue or not of new shares.

More financial illiteracy masquerading as the expertise of a voice crying in the wilderness.....

“Shoring up our balance sheet does not necessarily mean further dilution.......”

How else could one possibly describe the impact of issuing new shares to reduce future gearing....were it even necessary, which is your ill-founded mantra and invention?

When a bidder has received acceptances in respect of 90% of the shares it has offered to buy, under UK law it can compulsorily purchase the remainder

Says the arbiter of and expert in adding value through novel, non-repetitive posts.

"Misrepresenting my prose now are we?"

Another humdinger from SL.

Ricky Gervais shouldn't bother with comedy given such competition.

Our balance sheet does not need “shoring up”. That is purely your invention.
If now you at least understand that share capital is very far from “free”, that might be progress, but somehow in your case I doubt it.
Must dash.

SL: "For the numerous reasons I've mentioned, we should all be screaming out for a dollop of unfettered, unsecured, free (to the co) dilutive share capital”.

As anyone with any understanding whatsoever of finance will tell you, far from being “free”, share capital is the most expensive source of finance. Because shareholders take the major risk, so expect the greatest return.

Absolutely laughable nonsense.

ADM, Thornback!