Member Info for observer842

or not to berth. That is the question. Still scheduled for tomorrow! Anyone got wind of a time?

LoL @Bannor. I agree with pretty much all of that. The only thing I might split hairs on is my use of the word "prove", perhaps what I really mean is "demonstrate", as in it demonstrate to everyone, including potential off takers, that *all* hurdles, be those bureaucratic, diplomatic, pragmatic have been passed: the sailing is definitive evidence the ore can be shipped, and (presumably!) sold.

Additionally, and you might want to check this, I thought @Kiran had indicated that shipping before 20% further derisked the project for us. But we are going over old ground now... Ideally we need to see it in writing that on balance shipping now is better for us than shipping after the 20%. @Kiran!?

Yes they did @Dallas, but I took that more as an expectation than a requirement. I could be wrong though! Personally if it is a choice between shipping now or shipping after we take our 20% (which could be several months away still, 2021 even, but of course as early as tomorrow!), then I say ship ahoy! ;-)

@tom - extremely positive! We are just splitting hairs to pass the time of day. LoL.

Thanks @Bannor. I'm always appreciative of your time. You've got more patience than I do ... at times! ;-). Let's leave it there, I understand your point of view now, and I agree there is risk, just that we presumably don't agree on that level of risk. I think it is vanishingly small and outweighed by the positive signal shipping would bring, and you (presumably!) don't.

Talking of which - ETB is still tomorrow! :-))))

Indeed @Otago. I just can't get my head round why @Bannor, or anyone might think the sale of the ore is anything but a good thing for those involved with the project, which includes KDNC. Though clearly the secured creditors would prefer the negotiations to complete beforehand as they believe it is (partly) their ore. I'm not trying to change anyone's mind, in fact if anything I'm hoping it's mine that can be enlightened. The first line of what I posted earlier is key IMHO:

https://www.jusbrasil.com.br/processos/65368883/processo-n-1088747-7520158260100-do-tjsp
===[
The sale of iron ore does not violate the terms of the judicial recovery plan, but seeks to respect how much has been agreed and not yet implemented due to the Union's own delay in resolving its internal conflict and come to a successful conclusion in the negotiation with the recoveree.
]===

I don't know who first started the "DEV and/or Indo going it alone" meme, but it's got legs as I have a slight worry too now, but I don't really know why! Probably because @Bannor does and he's got form being right about such things... Indefinite stalling is the worst thing for us IMHO as there is a time limit to get things done. 2 years is it? so it's great that progress appears to be finally happening! ;-)

Perhaps it would help calm nerves if we were reassured in writing that shipment of ore up to $10m, as authorised by the courts, can only really be seen as a good thing for KDNC? @Kiran? Can someone other than @Bannor have a go at elaborating how they think this could play out in a bad way for us as I'm struggling to imagine it. And I've usually got a good imagination! The courts would have to be misrepresenting the purpose of this action IMHO or perhaps neglecting to report on key consequences and I find that hard to believe given all I've read. Naive of me?

Ob

Good spot about the navy @Bannor. I wonder why?

@Bannor: "I don't understand how you refuse to see or accept that there isn't the potential of a risk...." Of course there is a potential of a risk! ;-) Blimey, what made you think I didn't think that?

Proving we can ship the ore derisks the project. Perhaps it's only marginal, but it would be pretty dire if we took up our 20% holding only to find that there was an environmental or some such bureaucratic reason which meant that we couldn't ship the ore from the port. I personally think it's unlikely, but in my eyes, and no doubt others, shipping iron ore from Santana port is an important milestone which derisks the project. I'm not going back through the interviews, but I have a vague memory @Kiran highlighted this too.

Though stalling for this reason might rub up the courts the wrong way! How many days have we "stalled" for now? I see the ETS has been put back a day to the 25th, but the ETB of the 19th still stands. A good sign? I'd say so! ;-)

Perhaps there is a middle ground here? I wrote: "Does that make it any clearer why I believe shipping first is in our (KDNC) interests?" Perhaps a better scenario is for us to have the ability to ship (and to strongly believe there won't be any technical issues with the port), but not to actually ship, but to use that as a negotiation lever with the banks? Presumably you'd be happy with that?

I can't understand why you think we might be sidelined. Can you explain?

Additionally: "& the banks demoted to unsecured creditors" means we would be able to take our 20% as they are no longer a hurdle to this.

@Bannor. I can see both sides to this, and you may be right in all aspects where we disagree. In terms of: "I don't see how shipments commencing before our 20% ownership would serve our interests better than first securing our interests...." My reasoning is that if shipments commence it demonstrates to the banks that the courts are on the side of the JRP and that the banks were unable to prevent the ore from shipping, despite them trying, and this in my opinion weakens their negotiation position. Conversely, if the ruling last week (on the 8th) had gone in their favour it would have strengthened their negotiation position. Perhaps the banks are now in the process of pulling out all stops to try to prevent that first shipment? We don't know. But if it ships it indicates to me that if they were, they failed. Does that make it any clearer why I believe shipping first is in our (KDNC) interests?

Additionally, I believe if an agreement isn't reached outside of court, then the courts may rule to demote the bank creditors and I doubt they would want to risk that:

"Amapá Iron Ore Project Given Court Approval to Commence Iron Ore Shipments" (14 April 2020)
http://irservices.netbuilder.com/ir/cadence/newsArticle.php?ST=REM&id=311428203156429223
===[
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.
]===

As you say, we could be looking at an RNS as early as Monday - it's been over a week since the high court ruled, giving both parties sufficient time and motive to cross the t's and dot the i's in my opinion...

@Bannor. I'm inclined to side with the courts that the JRP is not substantially impacted by the shipment of this ore. IMHO it will benefit the project, the small labour creditors, and eventually us.

https://www.jusbrasil.com.br/processos/65368883/processo-n-1088747-7520158260100-do-tjsp
===[
The sale of iron ore does not violate the terms of the judicial recovery plan, but seeks to respect how much has been agreed and not yet implemented due to the Union's own delay in resolving its internal conflict and come to a successful conclusion in the negotiation with the recoveree. The impasse in the negotiation has the practical effect of harming the collectivity of creditors and others interested in the resumption of the reorganization's activities, requiring cautious but essential judicial action. In this line, the embargoed decision does not remove from the Union the status of fiduciary creditor, does not empty its guarantee or place it in a situation of vulnerability to renegotiate the form of satisfaction of its credit. It only allows the sale of iron ore, taking advantage of the high price in international trade, to support the payment of labor and low-income creditors, an imposing measure in view of the impasse in the negotiations. The proceeds from the sale will be deposited in a judicial account and released under the supervision of the Judicial Administrator, for the satisfaction of the aforementioned creditors and for the operational expenses of the recoveree. In addition, all cautions mentioned by the Judicial Administrator 17.231 / 17.232, which satisfactorily serve the interests of the Banking Union and other creditors, must be observed. For this reason, I maintain the sale authorization, with the precautions mentioned above, providing the embargoes in that part
]===

https://esaj.tjsp.jus.br/cpopg/show.do?processo.codigo=2S000I22C0000&processo.foro=100&processo.numero=1088747-75.2015.8.26.0100
===[
However, while the Union resolves its differences internally and decides the best way to receive its credit, it is necessary to decide, due to urgency, the request for the sale of iron ore, up to the limit of US $ 10 million, by Recuperanda, with the use of resources for the following purposes (pages 16.908): "(i) payment of labor creditors (USD 2,500,000.00); (ii) beginning of studies to revitalize the Railroad of Amapá, according to the agreement signed with the Government of Amapá (USD 1,000. 000.00) (doc. 01); (iii) investment in dam maintenance and safety (USD 2,000,000.00); (iv) feasability study, so as not to compromise the payment schedule of other creditors (USD 3,000.00.00); and (v) the remaining amount will be allocated to obtaining and renewing licenses for the operation of Recuperanda, payment of court fees and arrears in the port area, payment of current expenses (security, energy, maintenance of the floating platform, lawyers, judicial administrator) and income tax, PIS / COFINS, CSSL and other taxes
]===

Absolutely, on all accounts @Bannor!

Indeed @Dallas. My feel is that the ore shipping improves our negotiation hand, as if agreement isn't reached soon the secured bank creditors once again risk being relegated to unsecured status, with an associated hair cut, with this risk now being higher as it appears that the higher courts are not prepared to overrule the decision of the lower ones, which appear to be ruling in favour of the JRP, and willing to demote the banks if agreement isn't reached.

Too many "appears" in the above. I wish it were more straightforward, but it appears not to be! ;-)

@MLQ does your source suggest the preparation work and transportation of ore will be complete and ready to ship by Monday? Or do you think we'll likely see this date pushed back sometime over the weekend?

@Barksy. I presume @Kiran never got back to you.

@Bannor. What's your thoughts on the supreme court judgement I (finally!) found? Part of me is concerned that it appears that the bankers didn't agree to "submit a joint petition to the higher court to remove the Bank Creditors appeal and the subsequent interim order.", but fortunately the appeal (appears!) to have gone in DEV's favour and they are presumably appearing to ship the first $10m net of ore, barring any other last minute suspensive court orders!

Ob.