Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Totally agree with what SB has said about waiting until the court case concludes to decide what to do about the misleading RNS. I've questioned the helpful LSE poster's true motives before, so agree with SB on that too.
"The New Notes are issued by Frontera International Corporation, a fully-owned subsidiary of the Company, and bear interest rate of 10 per cent. if paid in cash or 12 per cent. if paid in-kind with additional notes at the Company's election." And there is a reminder of how we got ourselves locked in. In my mind it was Frontera's choice, i.e. the company's choice in the above announcement, to pay in kind with additional notes at an interest rate of 12%. Surely if this all goes horribly wrong for us share holder we have grounds to sue. Not sure how or who though.
Perhaps when planning the court action Frontera played out all the scenarios bar one, and that could be what they'd do if Frontera delisted and didn't have access to capital markets. The headroom would come in handy and surely helpful when negotiating with potential partners/finance providers. Sure the share price may have been severely depressed for a long while, but if it allowed the finalising of a deal to prove solvency it would bounce back when it needed too. I'm not fully understanding our position now as the court case and evidence coming out is too complicated for me, so perhaps Frontera have this all covered and will surprise us and prove they aren't insolvent and have a path laid out to service the debt. I would be less surprised though if that is not the case, and we learn that our fox has been out foxed by a bigger fox.
Why not pay the $2m interest in cash, Hope has no more shares/power, crack on with the BH deal, secure funding when not in the middle of a fierce court room battle, and if Hope did block that delayed seniority deal for funding take him to court then in a position of strength. Unless there was concrete evidence against Hope that they knew they could get at through discovery, why choose the route they have taken? It now seems unlikely we'll get any sort of funding whilst all this is fighting out in court, doesn't it? So we're reliant on the discovery that we may not have a water tight case to get it. I've tried to be positive and I know what Hope's game was is, but at this moment it feels like something doesn't quite add up. I can't get my head around what the strategy was/Is to risk so much the way they have.
That's played on my mind as well about Zaza only offereing the loan if it had seniority over OMFs. If we are to believe that this default scenario was avoidable but engineered to get Hope off of the board and reveal damming evidence against Hope through Discovery, then it seems very poorly planned. The case against Hope failing his fid duties would need to be water tight, but Zaza's loan offering seems to be a big hole. The alternative is there was no plan and Frontera are just fighting for their lives in any way they can.
Absolutely agree TSBS. There are some decent posters that provide some good reality bites. This person adds nothing of value to the discussion.
I pretty much totally confused by the situation we're in and all the legal jargon, but if Zaza has moved the asset out of reach and what's left for Hope to liquidate as things stand is a 5% royalty payment that I presume Zaza's legal team thought would be enough to satisfy Hope and the courts, why would a tro be granted?
Hopefully the California court sees it that way. Trial by jury and US case law might give them more chance to prove the failed fiduciary duty claim. I guess as some of the very astute posters have said, the movement of 95% of the asset out reach from OMF gives Frontera time for the case to continue, whilst not completely preventing OMF from liquidating assets to pay off their claimed default by Frontera. Perhaps this is a legitimate move but perhaps they're also trying to cripple Hope with solicitor fees to force a settlement. If Frontera really are selling decent quantities of oil they might be better placed to see out a lengthy battle in court.
I thought it odd that they didn't keep OMF's debt senior to the $5m they offered. It's almost as if they wanted this court case to happen, as you cant really blame Hope for blocking it under those terms. I'm finding the court case and documents coming out are way beyomd me, but for some reason I can't help feeling Zaza and SN have totally misjudged the situation and Hope's prowess, and are simply reacting to circumstances rather than having a master plan. I'm just glad that it sounds like this court case shouldn't take long to conclude. Whatever the result, I just want to know where we stand.
Sign of the cross. Maybe he's just praying :-D
Agree Bomber. I have asked on numerous occassions about whether a company could exist with political goals, rather pure business goals. Money has poured into Georgia over the years, markets have opened up in a way that is favourbale to the west and valuable data has been gathered. Not all is lost if Frontera go under and we lose all our money. I flip from being concerned about this political company theory, to being concerned that Zaza and SN have just innocently messed up, to feeling confident that they know exactly what they're doing. I finding it harder to understand all the court info now though, so perhaps this is also why I find I'm less positive at the moment.
What I find odd about the shorting angle is if anyone knew what was going down, would it not have been an incredibly risky time to open/have open a large short or advise anyone to? With everything coming out in the court case wouldn't anyone truly in the know have known that delisting due to nomad resignation was a real risk. We know that some of the TW followers were trying to close shorts, but to me this would suggest they didn't really know what was going on. On the otherhand, perhaps they got greedy and the timing of the announcment caught them off guard. Massive gamble though.
I expect they've given all the evidence they can in the Cayman's Flakey, and this is a tactical move. As Zen suggests, Frontera's legal team citing the 2015 case in California and the trial by jury could tip the scales in Frontera's favour. Perhaps Frontera had hoped this move alone could force a settlement and avoid the need to go toe to toe, or perhaps they think this is their silver bullet. It's a shame we don't know what has been put on the table by Hope or Frontera 're settlement. That would be very telling.
This sure is a roller coaster. I'm so confused. Perhaps I should just switch off for a few months as the more I read the less I understand!
Having the fiduciary duties cases heard by jury in California is a positive, isn't it? We do need the injunction case to go our way, but isn't that likely as the two cases will be seen as interlinked?
I am confused. As far as I am aware we don't know what is going on with the Cayman's case but can assume it is on hold due to the California case. This backed up by the injuction that Frontera have applied for in California to prevent Hope from taking the assets i.e. we wouldn't do that in California if Hope had already won in Cayman's and had control anyway. It's my understanding (maybe wrong) that Hope and Frontera are now basically mirroring the case from Cayman's in California , which is why Hope is after the assets again. So are people seeing Hope is trying to take control of the assets in the California case but assigning that action to a conclusion in the Cayman's?
Hope was going after the assets prior to the California case though, so no change there. And surely if we'd lost there Hope would have the assets already. Isn't it more likely that It was either going well in the Cayman’s but taking to California puts greater pressure on Hope, due to it being trial by jury and much more visible on his home turf, perhaps with greater implications for Outrider Master Fund. Or it was going badly (this goes against the judges last write up), so taking it to California is a last-ditch attempt to succeed, but also stops proceedings in the Cayman’s. Neither scenario has Frontera losing in the Cayman's though, or else surely it would all be over already, and Hope would have control of Frontera. Seeming as Frontera has applied for an injunction in California to stop Hope taking Frontera's assets, shares etc. the Cayman’s injunction must still stand. i.e. we couldn't have lost.
How can some say Frontera must have lost in cayman's, for if this was the case Frontera would already be in Hope's control. Frontera must have moved the case to California for a reason, and it could be because trial by jury in Hope's home turf gives Frontera more chance of winning or forcing a settlement. Of course that could be interpretted as they didnt want to take the risk that Judge Kawaley in the caymans might not come to the the conclusion that Frontera had hoped for, but that is very different from losing. Equally, it could be the opposite, things were going well based on the judges last comments so Frontera thought they'd take this to the next level and do the same in open court in California. We now we have to hope Frontera get an injunction in California so that their case can continue there.
I'd be even happier if things happened quicker, but I'm not sure that's a realistic expectation to set, unfortunately!
Win the court case or settle reasonably, get the NY loan, start drilling oil wells again, sign a deal with Baker Hughes and drill some more oil wells. Dream scenario for me is this all happens quickly and on the back of the above Frontera re-list and raise funds at a higher share price to JV on the gas plays with BP. All this will fund further exploration in some of the less explored parts of the block which would keep the Georgian's asset grab at bay and the need for lobbying would decrease. I can't say I am too worried about whether the shorters burn or not. I just want Frontera to succeed and for my shares to be worth a lot more than what I paid for them. If we could at least have the court case sorted, the NY loan money and have started the drilling campaign by summer I'd be very happy.