Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Let’s clear this up. Hope was claiming he was only vetoing the funding due to the companies legal responsibilities - Ie the outrider debt probably had a clause that it could not be subordinated. He then however ****ed up and offered a new loan from outrider under awful terms - which was actually offered at a much lower subordinatation (FEGL) therefore this would have been in conflict with the outrider notes. So it’s fairly clear he would bend the rules when it suited him and outrider - but not frontera
That is all valid however the best course of action - in my opinion would have been to pay/grant shares and then sue him. That would have avoided the default issue entirely. The only plausible explanation is that frontera are very confident hope will settle. The alternative is Zaza and Steve are crazy... The non disclosure I could forgive given the circumstances however you also can’t argue that frontera have repeatedly not disclosed information to the market over several years.
It’s a good point. It’s unarguable that frontera have defaulted - but what it really comes down to is hope willing to settle to avoid a $56m doller suit but probably taking a $20m payment in his notes now and probably some kind of rollover/equity deal moving forward. As in SN’s document too there is a risk even if he does enforce the mortgage the GG will just cancel the PSA anyway so high stakes indeed. It’s all really about risk management for him, if he can secure an instant $20m payment and some kind of deal that’s possibly better than the alternative. Fully expect an OOC settlement in a few weeks time
To be honest I read the injunction part as below - The judge has discharged the injunction effectively agreeing with outrider that they can enforce the default. He extended the date for which this can happen to the next hearing. From what information is out there I think this is reasonable as in SN’s document frontera clearly accept they have defaulted. What the extension allows though is both parties to come to an agreement rather than enforcing the default and suing hope for his breach of duties. So whilst this isn’t a great position to be in it’s now up to both parties to either settle or continue this fight into the next 3/4 months (as frontera said they will appeal)
Very true. At the end of the day hope is in a decent position and I think he will probably walk away with $20m+ of the notes paid off and the remainder rolled over or maybe converted into equity. So maybe a kitties dilutive pain to come but a price worth paying. He’s not stupid by any means and I’m sure if the funding is available this would be the preferred route which avoids costly litigation and a potential $56m bill
Fair enough gipps, best of luck.
Gipps,
Look i know people are concerned by most of your posts are totally wild and anecdotal.
Not trying to be a dick by 2.3m holding? not sure how thats your "future life" in the balance with around 6k's of shares.
Frontera believe hope has breached his duties, they will argue this in court. Lets just see how it turns out.
Its a likely tie up.
CEO, chairman and co-founder of blackstone just so happens to sit on the advisory broad with SN.
Its almost as if GSO was made for Frontera.
If it is them - i dont think blackstone will be put off with a litigation spat - im sure they have been through their fair share of CC's
Abit more on GSO : -
NEW YORK (Reuters) - Blackstone Group LP (BX.N), the world’s largest alternative asset manager, is raising its first energy-focused credit fund, according to people familiar with the matter, the latest sign that private equity firms are seeing investment opportunities among distressed energy assets.
The move indicates Blackstone is betting that the bonds of some exploration and production companies that rode North America’s oil and natural gas boom are now undervalued, or could be in the near future, following the plunge in crude oil prices.
Not only has the oil price collapse put acute pressure on energy companies with weak balance sheets or high production costs, it has also hurt sales for related services companies that sell everything from sand to drilling rigs to temporary housing.
GSO Capital Partners LP, Blackstone’s credit investment arm, has approached many of its existing investors to quickly raise between $500 million and $1 billion to invest in traded debt securities in the energy sector, the sources said.
A Blackstone spokesman declined to comment. The sources asked not to be identified because the fundraising is confidential.
Plenty of hedge funds in NY.
Not that many can would lend $60 to a tin pot oiler.
GSO Capital Partners fits the requirement.
"Providing credit to companies that might not otherwise have access to capital helps stabilize viable businesses and enables businesses to grow, while producing attractive returns for our investors"
$131B AUM
My understanding of the word in that context is usually due to the loan being drawn down in stages.
Re hope and the board questions. I would suggest it’s likely the company have suspended him pending the CC - they would have been careful not to remove him had that would trigger a default for the entire loan notes.
Absolutely - only problem being hope was a directly of frontera therefore he had to act in the best interests of the company and avoid conflicts of interest. Instead of vetoing the agreements he should have voided himself from the discussions and voting based on co flick of interests
I have also said that - but it really does depend on how strong fronteras case is/what they have on hope to force him into a settlement. Hope will file his defence tomorrow - I guess form there everyone will know where they stand and hopefully in the next two weeks or so this will be resolved and then WHI can step up to be our joint broker/nomad and the shorters will burnnnnnnnn
SN and ZAZA - approx 2b shares I think
Yes I agree - I’m not actually so concerned if they do de-list I just want to understand the process really. I think most of us would agree it’s very unlikely we will avoid delisting (since the rules are now only 30 days which is ridiculous to be honest) Happy to sit and wait however many months it takes to relist on the aim, or another exchange. What is annoying though is I have an open CFD with IG for a long trade so when Frr delisted they will close it out at 0.0p so I’ll lose a few grand there.
How can someone force another party to give over these documents? I’m curious? he could just say - sorry I don’t have any of those?
From what information we have available I guess fronteras argument will be... Hope blocked a couple of funding attempts claiming there was a legal issue around the level at which the debt would be secured. He then however went on to offer his own funding at a level which was actually superior to the current debt. So frontera will argue he never had an issue really, he was working to gain more control over the company instead. The above is obviously not working in the best interests of the company, and there are some major conflicts of interest. The problem is, even with all of that frontera did default on the payment, so the judge would rule that they can remove the injunction. It is good that he saw it fit to extend this injunction to the next hearing. I would say it’s very likely he did that to allow both parties to come to a compromise. As SN’s court doc pointed out even if frontera do successfully sue hope for breach of his duties and win, it could be too late if the injunction has already been lifted. All eyes on a settlement, but I suppose even if hope does take the asset... there is still a chance frontera will successfully sue hope for breaching his duties and receive £56m
I think that’s the main question here. Why take such a risk? Once/if it all comes out - it could show the company defiantly took the correct action. The conflict of interest in the emails etc is fairly clear - but I do suspect there is further evidence to support the claim - hence the discovery against hope. It’s also worth pointing out as others have - defence extensions need to be agreed by both parties. That again as others have pointed out can sometimes allow for a settlement.