RE: Oh dear, what has happened here?28 Mar 2026 16:43
Hi shauny86,
.."This makes a lot of sense. Shared risk, and reduced risk, for all..."
This is right, so far as it goes. The thing to look at, though, is the division of the spoils.
In a former life, I used to syndicate bank loans.
The essence of the deal was to use our balance-sheet / credibility to secure a mandate from a prospective borrower, who needed a $400-500M facility ; then re-package and split the deal into various sized 'lots'; then 'reward' participants according to the size /value of their contribution.
For instance, we'd sign up alone or with another bank for 100% of the risk and aim to sell down/de-risk 80% or so, ie left with maybe 10% each.
We had the MANDATE, so were in a strong position to dictate terms, including which of our competitors we wanted to let in ...and at which levels. We occasionally had to deal with ego or 'political' issues, but that went with the territory.
On the 'reward' side, we might charge the Borrower an arrangement fee, let's say 2% or 2.5% flat.
We'd invite banks in at say $20M as 'Arrangers' and offer them 1.5%; at $10m+ as Co-arrangers @ 1% ;and as Participants ($5m +) @ 0.75%.
You can do various permutations to see how much our rake-off at various levels could add to the profitability of the deal, if we reached our targeted net risk contribution. We might earn $1M on our net risk, but another $2.2 to $2.5 M on our 'skim'.
We'd also charge Agent's fees if we were running the books, a side of the business where - once you have the infrastructure in place - the marginal cost of adding throughput is insignificant, so can be quite the profit centre.
And we'd want to snaffle a lot of the contingent liability business, bonds, guarantees and letters of credit (where the only 'cost' was utilisation of our bank counterparty risk limits).
OK , it's a different business, but the principle's the same: a lot of the stuff that RAM will be making a turn on will be by virtue of its 'acquired' intermediary role, where it will have an opportunity to make money that rightfully belonged - and I believe still belongs - to ZIOC shareholders.
Yes, shareholders- even the opportunistic Control Consortium of March 2025, who after all 'broke' a genuine logjam - the GLEN shareholding and offtake 'lock-in'.
What sticks in my craw - and those of others - is the seemingly facilitated late-stage introduction of RAM into the mix, which actually adds minimal value (the work having been largely done at our expense), yet seeks to arrogate to a select few the bulk of the subsequent reward.
In another former life, I worked in P*kistan, where I first witnessed the 'quaint' medieval practice of 'octroi' - a local tax extracted by the powerful. Around Karachi, that took the form of someone cutting a trench across the road overnight, then charging every passerby a fee for the loan of a plank of wood to bridge the gap.
That was 'highway robbery'.
So is this, IMO.
HTH and ATB
Sign In
Follow the stocks
