15% of £70m?????19 Jun 2018 20:41
Resource Capital Fund VI L.P. (RCF VI) to provide an additional £10 million, secured subordinated loan under the existing bridge loan facility (Bridge Facility), with the potential for this to be increased to £15 million at the discretion of RCF VI. The additional £10 million brings the total subordinated loans amount to £65 million. The subordinated loans are accruing interest at a rate of 15% per annum, which is being capitalised. If certain conditions precedent are satisfied (including shareholder approval), RCF VI can elect that the subordinated loans switch to subordinated convertible notes. The Company will, in due course, seek shareholder approval to enable the issue of the convertible notes and subsequent conversion into ordinary shares in accordance with the convertible note terms under the Bridge Facility. The convertible notes are also conditional upon, amongst other things, RCF VI obtaining FIRB approval: and
he Company's existing offtakers, Global Tungsten & Powders Corp (GTP) and Wolfram Bergbau und Hütten AG (WBH), to align the Supply Agreements with the extended standstill period under the Senior Debt and Bridge Facility.
The first £5 million tranche of the additional funding from RCF VI was received in February and, subsequent to Quarter end, the final £5 million tranche has been received in April.
As noted above, the March operating performance was constrained by the adverse weather event, impacting cash flows for the Quarter. Accordingly, Wolf remains in discussions with RCF VI on releasing the additional discretionary £5 million as needed to progress the Company's transformation activities to achieve design performance at Drakelands and pursue further development opportunities for long term growth in 2018.
£70m of debt at 15% means that WLFE has to make £10mpa, just to service the debt??? Really???
Since it has never, ever made £1 profit, not even £0.01p profit, the time it takes to pay back £10m is, well, infinite. The even worse news is that next year the debt will be £80m, plus whatever else they have to spend to extract the tungsten out of the clay. £12m interest to pay, instead of £10m this year. And so it goes on, until they choose to issue the dreaded convertible loan notes - we all know what happens after that, don't we??
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