Member Info for Cranleigh

For clarity, $145/tonne remains AISI the company’s guidance as to the rough average of TorPs to date. They are all priced with a formula relative to the market value of Pply4’s key constituents. And $125/tonne is the “understandably conservative” (Tom Staley) assumption of the Mandated Lead Arrangers’ consultant. As well as covering his derrière, I think with that assumption he is helping set up the need for the IPA guarantee.

Great news - any other prospects wanting early-bird pricing had best get their skates on. Given the potential volume in say Brazil, India or Europe, it could take just one of those to take us over the line. Or maybe Gina would like to sign up for more than the present (and non TorP) amount.

Taufour, if you look back to rather earlier announcements on the plans for Stage 1, before “structured capital” made its appearance, you will see that the original intention was to arrange debt finance on a conditional basis, then equity sufficient to satisfy those conditions. Clearly that Stage 1 proved infeasible, perhaps linked to the withdrawal of a potential cornerstone investor. Water under the bridge, but all Stage 1 turned out to be dilutive - the equity component at a knock-down 20p and CBs (assuming full conversion) diluting our bottom line, and the “structured finance” (Gina’s royalty deal) diluting our top line. Most current shareholders, including many of us who have taken the early risk since pre-planning permission, are IMHO hoping the BOD oft-stated objective of an all-debt Stage 2 will be delivered.

Debt is way cheaper than equity. Read any corporate finance text you care to. I’m with SL and others - please, no Stage 2 dilution! Stage 1 was effectively all dilution, whereas it had been planned as partly debt. Enough already.....

And good morning to you SL.
Taking your forward sales idea, the resulting cash is (as I understand you) to be spent on capex and thereby reduce the cash amount required from Bank lenders.
It can’t also be spent on interest, let alone debt repayments and/or constitute a TorP.
You are double (or arguably, triple or even quadruple) counting!
And we clearly disagree about the commercial risks aspect of your idea.... and apparently also the merits of spreading Poly4 around via TorPs and therefore committed partners to different crops and geographies.
Let’s see what the company come up with.
Better informed than either of us about what is feasible and better placed to assess what is desirable!

“The advantage of such an arrangement with a 'significant other' would be two fold. It would give us the prerequisite sales volume that funders require, and it would give us at least some of the ununderwritten portion of ST2 funding.” It might reduce the TorP requirement from lenders, but IMHO only in proportion to the reduction in the amount of cash they needed to put in. The money from forward sales would be spent on capex under your scheme, so not also available to service debt - the rationale for the TorP requirement. But my main concern with your idea is how it might fit - or not - with our other commercial arrangements around the world. An undisciplined ‘significant other’ armed with heavily discounted Poly4 could be seriously disruptive. I’d be way happier with a few more TorPs, nicely spread geographically and by crop priority, with different partners, to spread the risk and give us the long-term market penetration platform.

They are party to a few fertiliser offtake agreements as well as marketing agreements

Agreed NoEasy. I guess as anyhow that is water under the bridge, the questions now are: 1. Will the agreement actually be implemented? It seems so... 2. If it is, will we buy it back at some point?

Interesting question, NoEasy. I think in Gina’s shoes I’d prefer the royalty deal, albeit she is of course also taking $50m in equity: 1. Her 100-year take is on each and every tonne “off the top”, before operating costs, lenders or the tax man take anything. 2. It is not exposed to any risks of dilution or management excursions into other ventures. 3. She commits no cash until a big slug of project capex is spent, some 2 years after signing the deal. 4. She gets security in the form of some key assets.

I haven’t read of any 3-month period of grace; if the SP has been high enough for 20 out of 30 consecutive trading days before 19 Dec 2018, we can redeem.

Duracell, they wouldn’t be forced to convert, but redeemed at par for cash, ie just get their $200K back, plus interest .... no shares!

“Only a fool would convert”. That surely depends on the SP - if I were holding CBs I’d convert at close to 40p for the capital gain, never mind otherwise running the risk after December 19 of my CB being forcibly redeemed at par!

644m shares was my total for Funds, 1,066m for Institutions.

Main difference appears to be Jupiter, 283m held for own account - or anyhow, not through reported Funds.

LITC - in answer to your "does anyone know how to consolidate the 2 lists?" - well, yes.

I checked which Institution operated which of the Funds, and prepared a matrix accordingly.

By this method, when last I updated it 10 days ago, I was able to allocate to listed Institutions all but 9.3m (just over 1%) shares out of the 644m shares held by Funds.

Drastically overstated at 38% - you are double-counting the Funds and the Institutions.

Morningstar's top Institutions goes down as far as those holding a mere 4.5m shares, so I would think their 24% total is pretty reasonable if their sources are reliable.

And close to Reuter's 25%, albeit that was at 20% as recently as the end of June.

So say 25% held by IIs....HUGE potential growth in that percentage to get anywhere close to a typical II percentage in a FTSE 250 let alone FTSE 100 company.

Only one place (assuming an all-debt Stage 2) the IIs are going to be able to get those shares from - you and me!

Myo, As I already said, this Block Listing should allow the company to list the shares resulting from conversion of all the remaining 1,221 bonds. I keep those numbers on a spreadsheet so I don't try to rely on memory! (My arithmetic says they'll need to list an additional 131 shares, but who cares?!).

As to sweeping up, the company could do that on and after 19 Dec 2018 provided that the share equivalent of a bond has had a value of at least $350,000 (so around 40p/share at present exchange rates) for at least 20 out of the 30 consecutive trading days ending not more than 7 days prior to the giving of redemption notice. See 25 April 2017 Prospectus, Part 12, 3.3 (a) (i).

I don't see this RNS affecting the share price. As others have said, it just facilitates the listing of shares resulting from any future conversions - with this application, they have made allowance for converting all the 1,221 outstanding bonds.

As to other foreseeable dilution, we have Hancock (203m) and various Options, giving prospectively a total of 5.758bn shares in issue....assuming, as I hope and increasingly think likely (based on the last quarterly update, noises about Torps and the port resolution), that Stage 2 can be negotiated on an all-debt basis as is the BoD's oft-repeated objective and plan.

And makes an all-debt, nil dilution Stage 2 for a rather reduced total requirement all the more achievable and likely IMHO

Thanks Milo, I see it now and the changes are small as you say.

Don’t think the lenders will be using this as a basis - their own consultant is for instance apparently assuming an average selling price of only $125/tonne, compared to the actual c$145/tonne reflected in out TorPs to date.

Which document are you referring to, Milo?