Member Info for Cranleigh

I should have referenced slide 19 re the business potential for an in-market blender.

More economic IMHO to ship Poly4 in bulk, blend a range of finished products near to their point and moment of final use than to anticipate that fragmented demand, blend a range of different products at Wilton and ship them halfway across the world.

Scotty - the final word on the final slide of that presentation, “independent”, together with the material about the business potential for a blender in-market producing a variety of Poly4 blends just set me wondering if a deal of some sort is already on the table.

Maybe even a “strategic partner” deal to cover some/all of the $4-600m?

Hey presto “To clarify the proposed uncovered debt capital markets tranche, this means that we intend to issue a bond in the debt capital markets that will not be guaranteed by the IPA.”

Oh and by the way, I have emailed IR to ask for clarification of what is meant by “uncovered” in respect of tranche #1 in the RNS.

If I get a useful reply I will let y’all know.

Have a good weekend.

What all the dialogue about asset value relative to debt fails IMHO to understand, or at least reflect, is....the prospective lenders are lending against what they assess as likely future earnings - hence their requirement for TorPs - which are anticipated to be huge and enduring. That cash flow is what will cover the interest bill and principal repayments.

Their senior security over the company and its assets will give them, as the case may be, full or partial protection against SXX going pear-shaped for some reason before all the debt is repaid.

The Net Book Value of those assets, being holes in the ground plus specialist equipment, will be pretty irrelevant - it will all be worth whatever X, in competition with Y, Z etc, is willing to pay for a 100-year + cash machine.

That to me is the likely real world thinking of lenders on this one, not Net Book Values.

Casa, that is why our putative lenders are banking (pun intended) on firstly the project being successful, or secondly being sold on as a going concern to AN Other.

And I think they are right that those scenarii, combined, must be say over 99% certain, and liquidation a very remote possibility indeed.

SL, I have an inkling that they assess, using their own techniques, experience and criteria, the risk and return attaching to any proposed loan, as well as its impact on their total business were it to go sour.

Net net, bankers (and as you may be aware there are a wunch of them), tend only to loan out umbrellas when there is almost no chance of rain.

But maybe you are HR Director, so this stuff may be new to you....

SL, As a businessman you really ask that question?!

I continue to think that CF probably meant by "covered", "secured" i.e. by assets, not covered by any IPA guarantee ...which may or may not be provided, after all, so where would the logic be in that explanation.

He's Australian, right?

"Since their introduction in Australia in 2011, the stock of covered bonds has grown to around $80 billion, or around 15 per cent of Australian financial institutions' long-term debt. Covered bonds are a form of secured funding backed by both the issuer and a specific pool of assets."

https://www.google.co.uk/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&cad=rja&uact=8&ved=2ahUKEwijq-mK46fgAhXuXRUIHeU4DcwQFjABegQIBhAE&url=https%3A%2F%2Fwww.rba.gov.au%2Fpublications%2Fbulletin%2F2017%2Fsep%2Fpdf%2Fbu-0917-7-covered-bonds-in-australia.pdf&usg=AOvVaw339TG2JkNeNerR2K0z-Xzd

Casa, I don't think you are right.

The senior lenders will be "secured", no doubt by a classic fixed and floating charge over the company and all its assets.

But that does not mean that the "value" of the security need be equal to or greater than the loans. After all, what value would you ascribe to some holes in the ground, some buried specialist machinery etc, net of a bundle of restitution and redundancy liabilities, in the very worst case of liquidation.

No, their expectation/hope is that if the project went pear-shaped they would recover all or most of their outstanding loans via a sale of the company....before junior lenders and shareholders saw a penny.

So it's a judgement call by the lenders, not an arithmetic equation.

SL, do something useful, would you - hop down to Ikea for the assembly instructions for our new toy?

In my understanding, “covered” debt or bonds is simply another term for “secured” debt or bonds - zilch to do with whether they carry any equity conversion rights.

6 thumbs for Scotty's post - wonder why....

I couldn't possibly counsel you, SL (let alone council you).

What a great (and confidence-building) presentation by Mark. Thanks so much for the link, Myo.

'Orrible plonker?

So that’s why the share price has been down - SL has been selling. I wonder if LL has too. Now wouldn’t that be a coincidence?!

Given the first sentence of Chrisatbirdies' post, surprising that we haven't (so far) heard from certain posters....

Of course I could, Milo, but I charge for consultancy!

Casa,

You misunderstand my offer.

Forget about quarterly expiry, fees etc, I just offer to write a call option whereby I could buy your shares off you at a price equal to SXX's audited historic cost Net Asset Value per share at the end of 2024.

Generous, no - given that you appear to think the SP at that point might well be lower?!

But now I learn you don't have any shares - quelle surprise....

Pop pop I suggest you research the company a bit more - constraints of mining in a National Park, planning permissions and aggregate peak year 8.2mtpa in TorPs....for starters