Member Info for observer842

No, the R$818m is the unsecured debt.

If the unsecured debt is R$818m and this took a 30% haircut it would have originally been R$1.17B and if the R$185m is the secured debt which hasn't had a hair cut, it would mean the total was $1.35B. Are we there yet? LoL.

@tomcat. I've just realised that because the $49m will be taking a 30% haircut it can't be equivalent to the R$185, and therefore the R$185 is likely to be the secured debt supplied by "the banks" - "4.5.2. Indo Sino. Once checks previous condition of the Dip Financing B, Indo Sino will waive its guarantee and the your credit will be classified as cash register, being paid under the same conditions as the other unsecured creditors."

@Cause, if you really want to start considering the debt part of the equation then you are best starting off with:

"Approval of Judicial Restructuring Plan Paves the way for the Restart of the Amapá Iron Ore Project." (30 August 2019)
http://irservices.netbuilder.com/ir/cadence/newsArticle.php?ST=REM&id=2887382
===[
The JRP schedule contemplates the majority of the historic liabilities will be paid from free cash flow in years 5 to year 17 of operations, which represents a discounted NPV10 debt value of approximately US$106 million.
]===

There is more debt than that, but that's the majority. Double it if you want to be ultra conservative. Then there is new debt of at least $85m that will be coming onto the books for the CapEx and other bits and bobs - some from the JV, but we benefit from that, with decent interest. :-)

That's another one of those coincidences we keep seeing @tomcat! LoL.

You are confounding me @tomcat. LoL. I'm not sure how you concluded that from what I've said or you've read today. It clearly states: "the company's original debt was R$1.5 billion, but creditors reached an agreement to cut approximately 30% of that amount to R$900 million." and from the JRP: "4.5.1. Seventy percent (70%) of the credits of each creditor unsecured will be paid in full according to the following condition"

@Cause If it's your first time doing this I do suggest you start simple, get someone to look through what you've done - why not start by seeing if you can confirm my assertion that:

"I make it that prices of around $100/t add around $1B of pre-tax NPV10 to the project over the $61/t baseline. Incredible really. @Cause are you able to confirm yet? LoL. :-)"

That should be trivial to confirm if you have got to grips with the present value of money and other aspects of the project. If you get stuck I can talk you through it.

Good luck!

Ob.

Maybe the R$900 million, is wrong, and in fact it's more like a hair cut to circa R$1B (closer to 30% of $1.5B), which then corresponds to the figures I'm seeing in the JRP?

Thanks for the link reminder @tomcat:

"Brazilian miner agrees 1.5 billion reais restructuring with creditors" (17 September 2019)
http://www.nasser.adv.br/uploads/nasser-brazilian-miner-agrees-1-5-billion-reais-restructuring-with-creditors-ll-latin-lawyer-2.pdf
===[
Donelli, Abreu Sodré e Martins Advogados has helped Brazilian mining company Zamin Amapá Mineração agree a restructuring plan with creditors worth 1.5 billion reais (US$362 million).
]===

I'm reasonably certain that the $1.5B (which was rounded) has taken a hair cut to something like $900m:

"Zamin Mineração to resume mine operation in 2021" (Sep 03 2019)
http://www.valor.com.br/international/news/6418273/zamin-mineracao-resume-mine-operation-2021
===[
Zamin Mineração, which operates a mine in Pedra Branca do Amapari, in Amapá state, is expected to be back to business in the first half of 2021. The company, which halted iron ore production in 2014 following an accident at the Santana port terminal, had a judicial recovery plan approved in the last week of August. The creditors’ green light came after British company Cadence Minerals was presented as an investor of the project, which includes, besides the mine, a railway and the port. Cadence put up $2.5 million to pay labor debts and creditors with liabilities of up to R$150,000. Eduardo de Abreu Sodré, a partner at law firm Donelli, Abreu Sodré e Martins Advogados, which helped draft Zamin's recovery plan, explains that the company's original debt was R$1.5 billion, but creditors reached an agreement to cut approximately 30% of that amount to R$900 million.
]===

The $362m is simply calculated from the R$1.5B using the exchange rate around the end of August (4.14)

Thanks for your kind words @Ivy, and fingers crossed!

@tomcat: I make the NPV10 of the R$185m as $R88m,

For clarity, I make the NPV10 of the R$818m as around R$350m or maybe $360m, but this is quite ball park.

The sum of both is R$88m + R$355 (average) = R$443m

Convert @3.6 is $123m and at 4.14 is $107m

However, I'm not sure how safe it is to use 4.14 since we don't know if the debt is denominated in USD or BRL. I feel more comfortable using 3.6, but it's possible the BoD used 4.14?

I'm not sure where your $363m comes from, as the debt took a 30% haircut, so why mention it? Is it mentioned anywhere?

I checked that the R$818m interest and repayment schedule in the JRP corresponds approximately to the following at USD:BRL 3.6:

"Approval of Judicial Restructuring Plan Paves the way for the Restart of the Amapá Iron Ore Project." (30 August 2019)
http://irservices.netbuilder.com/ir/cadence/newsArticle.php?ST=REM&id=2887382
===[
The JRP schedule contemplates the majority of the historic liabilities will be paid from free cash flow in years 5 to year 17 of operations, which represents a discounted NPV10 debt value of approximately US$106 million.
]===

I wonder if it's a coincidence that the R$185m (might be R$182m) is approximately $50m @3.6 USD:BRL. i.e. is that Indo Sino's $49m? Or is it the banks? I had thought Indo Sino's $49m was part of the R$818m, but I'm not so sure now. I don't like coincidences! :-) It would be nice if it's separate, as it gets repaid sooner in the JRP - and that would come to the JV if my understanding is correct. ;-) But it would mean I have been unable to locate the amount owed to the banks in the JRP...

Original source:
https://pje.trt8.jus.br/primeirograu/Processo/ConsultaDocumento/listView.seam
20012416350764800000023996777

Translation care of @Dallas
https://drive.google.com/file/d/1t_2GNdDBpqXrb9UszfuVFa63N6s_lHIA/view

In the last table (probably clearer in original source) there are four rows above "Total Non-Current Liabilities".

The first corresponds to DIP A+B payments and then return + interest
The second is DIP C payments and then return + interest
The third appears to start at around R$818m in 2019 and stays steady for 5 years with around a quarter percent interest, then goes to zero over 8 years
The fourth appears to start at around R$185m in 2019 and stays steady for 3 years and then gradually reduces to zero over 12 years.

Now I've told you that perhaps you'll have a better chance at seeing it for yourself? Rotate, zoom, squint, correlate.

I might as well tell you the exchange rate I deduced that they used in the JRP: 3.6

Ob.

No, because they are in R$ ;-)

Did you ever do Present Value 101 @tomcat? LoL. Here you go :-)

"Introduction to present value"
https://www.khanacademy.org/economics-finance-domain/macroeconomics/monetary-system-topic/macroeconomics-interest-rates-and-the-time-value-of-money/v/introduction-to-present-value
===[
Present value is the value right now of some amount of money in the future. For example, if you are promised $110 in one year, the present value is the current value of that $110 today. Present value is one of the foundational concepts in finance, and we explore the concept and calculation of present value in this video. Created by Sal Khan.
]===

I make it that prices of around $100/t add around $1B of pre-tax NPV10 to the project over the $61/t baseline. Incredible really. @Cause are you able to confirm yet? LoL. :-)

Iron ore prices rose ahead of the Chinese holiday at the end of last week towards recent highs, so it will be interesting to see if this trend continues this week as we hopefully get to hear the decision from the courts on the future of the project. :-)

Pretty much agree with that @tomcat. Though I'd replace "1st from the stockpiles at the port... " with "1st from the stockpiles at the ports and elsewhere in Santana"

There is apparently some of the ore near the mine @tomcat ("...and 1.2 million in Pedra Branca do Amapari") - at least that is my take, and presumably some of Indo's claim too (1.72Mt - 1.39Mt = 0.33Mt). It's possible there is enough mined to satisfy the claims - that being the point. We don't know. Remember they appeared to be mining much faster than they could ship subsequent to the accident, and it was building up fast.

Good points @Bannor! I had in mind BCN was still sufficiently Canadian to be covered, but since they insisted on re-domiciling (against our wishes! LoL. Let's not go there ;-) ), I suppose this aspect will not apply.

As you say, hopefully nothing will come of it. BCN's share price didn't seem to blink in response.