RE: RE: RE: RNS20 Feb 2021 16:57
@mr.james. That's an interesting point that "nothing is a certainty until signed." Might be worth asking @Kiran what happens if we declare we are unable to conclude with the banks. My take, and why I believe the courts finally ruling to allow shipment is great news - despite us owning 0%, is that if we were to declare we are unable to conclude despite our best efforts then certain aspects of the following RNS come into play :
"Court Approval to Commence Iron Ore Shipments" (14 April 2020)
https://www.lse.co.uk/rns/KDNC/court-approval-to-commence-iron-ore-shipments-hzouuhfq5grr5eu.html
===[
DEV also filed a further petition which requested the release of R$400,000 (~US$78,000) currently held in a judicial account to be used for essential maintenance at the wholly-owned private port and the removal of the secured bank creditors liens ("Bank Liens") over DEV and its assets. The Court ruled to release the funds. In addition, the Court has requested that the secured bank creditors reach an agreement with the JV Partners and DEV within 60 days or the Court might rule on the annulment of the Bank Liens and consider the banks as unsecured creditors. As unsecured creditors, the bank's credit will be subject to restructuring plan limits and discounts and be paid from free cash flow from DEV, which may be over fifteen years.
]===
I think if we are confident that no further rulings will be possible to prevent the iron ore shipments to raise net $10m over the next few months going ahead, and if we weren't also confident that we will conclude with the banks over that period, then now would be the time to declare we are unable to reach final settlement terms and to return to the court with the original petition for: "removal of the secured bank creditors liens ("Bank Liens") over DEV and its assets.". If successful this would likely be good long term for the project "As unsecured creditors, the bank's credit will be subject to restructuring plan limits and discounts and be paid from free cash flow from DEV, which may be over fifteen years.", but may delay us taking our 20% a little(!) longer until judged. But what'd different this time is that the project can continue with part of the $10m funds, in addition to that we've also contributed out of the $3.5m to take us from 20% to 27%.
For sure the banks will realise this recent judgement weakened their hand: IMHO they incorrectly gambled the upper courts would rule in their favour when in fact they should have withdrawn their petition when principle terms were agreed and allowed $10m net to be shipped then. I just hope this recent judgement hasn't given us (too much!) confidence at the negotiation table! If the courts have to judge they may not smile favourably on us if failure to finalise is, on balance, our fault!
Ob.
Sign In
Follow the stocks
