The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
This debt issue is not a problem here.
A factor to also consider is that debt can often be a less expensive alternative to equity placing due to tax deductibility of interest payments. Also worth noting that the time value of of debt Vs placings is much smaller (i.e. inflation reduces the debt requirement rather than crystallising it by a placing).
Often companies equity place simply because they have no way of servicing their debt... MRS is cash generative so doesn't need to place.
If you can't service your debt then I agree the company is done for. If it's used to expand the company generating more revenue then the cost of the debt then is better than a placing imo and will achieve a higher long term return. Most successful companies have some form of debt which is often more beneficial than tying up their own capital
Just look at the debt Glencore.... I guess they might know what they're doing?
Yep. Agreed. Since this launched on day 1 on Aim funding it through to production was always the ultimate question. I was kinda hoping they'd manage it with debt... especially so with the various off take agreements over the years. I'm hoping resolution 10 is plan B but is looking more likely the only plan.
I'm really confused and lost on the kdnc holdings. When they sold did their holdings drop below 5% or 7%? This rns implies they've bought which can't be true so must be filled incorrectly... and should they be informing kdnc shareholders of buying or selling of strategic assets?
Some good posts with interesting views on both sides. Have topped this afternoon at 10.2p which I think has been listed as a sell. Think even if there is a placing there is good upside to this one.... provided targets are met and cash flow generated. We shall see.