No more jokes.....12 Jan 2019 08:56
This week some may say it is about to get real serious.....
Fear can keep us up all night long, but faith makes one fine pillow......
I am fully expecting some turbulence this week.
We have £1.5mm Bergen loan which could be converted into shares at the end of the week coming
That is circa 500mm shares or approx 9% additional.
The chairman said “We have only undertaken this transaction as a short-term bridge of a limited size pending the receipt of the expected $5.5 million Tranche B pre-payment finance from Mercuria, which we are expecting to complete within the 30-day period prior to the conversion rights on the Convertible Securities becoming effective. ”
So what happens after the 30 days?zm
“Company may elect to repay each tranche in full within 90 days of execution date, subject to prior conversion rights which arise after an initial period of 30 days from the date of each advance.“
So what price and how much dilution?? Well given where we are this weeks SP will determine this.
Clause states....
b) 92% of the average of five daily volume-weighted average prices of the Shares on AIM during a specified period preceding the relevant conversion
Say nervousness gets hold of the SP and it drops back to mid 20s, given this week’s rise perhaps a sell of would push it back there? @92% if say 25p.....
$1.5m/1.2= £1.25mm
Assumes If Bergen convert they will own 9.5% of the company, but will be down $1.5mm ( less their fee $170k and pre sold 68mm shares say $230k)
Will conversion impact the SP? What return will Bergen want from their investment?
So VAST can repay upto 90 days unless converted.... is it likely Bergen convert at the earliest point?
That level of dilution of course is only half the story for this chapter as the loan has another tranch which can be called
The second Convertible Security will have the nominal value of US$1,575,000 and is expected to be issued within approximately a week of the date on which the Company obtains authority from its shareholders to allot Shares and to grant rights.....
But the company has not yet asked... curious as “such approval from the shareholders not later than 31 January 2019.”
Still time for that though.....
Let us not forget....
“The proceeds for the issue of the new 68,000,000 Shares and the Convertible Securities will be used by the Company for long term lead items on Baita Plai Mine, initial expenditure on the Heritage Concession for diamonds in Zimbabwe and general working capital.”
So if the company is going to ask shareholders surely an update on how this has progressed...?
My musings... faith makes a great pillow... maybe not the multi bagger returns immediately... maybe a few more painful days to come... but the company is working to progress our assets and are trying to get the cash to do so whichever way they can... whether this works out for us... I think this week will prove a good barometer
Kew
Sign In
Follow the stocks
