RE: Stunning Amapa value27 Mar 2022 16:18
The details around the 49% are not crystal clear, perhaps intentionally so. In my opinion the following is a good indication that we are expecting, and Indo expects us to go to 49%, should the project remain on track and require further funding.
"On completion of the US$ 6 million investment Cadence will have the right to appoint two members to a five-member board with the remaining three comprising of one member jointly appointed by Cadence and Indo Sino and two appointed by Indo Sino."
In terms of my best understanding of:
"Should Indo Sino seek further investors or an investment in the JV Co, Cadence has a first right of refusal to increase its stake to 49%."
I CURRENTLY take that to mean: if the JV company (ultimately DEV) needs funds then it can either do a cash call on the 27%/73% owners (an investment), or it can sell part of the company (to investors). If the former then KDNC has a first right to (part) fund Indo's contribution, increasing our stake towards 49%. If the latter then we have a first right on this, also increasing our stake towards 49%. But what happens if we don't exercise this right in the first scenario? What happens if we don't in the second, but another investor is found, or we find & facilitate their investment? i.e. it's not completely clear when this clause is valid:
"If Cadence does not exercise its right of first refusal under the terms, Indo Sino will have a twelve-month option to buy the shares in JV Co held by Cadence for 1.5 times the price paid by Cadence for such shares."
Either the terms are fairly straightforward and we are not being told them for strategic reasons, or they are pretty complicated and impossible to summarise clearly in an RNS!
Others interpret these quotes differently to me, and perhaps they are right, impossible to tell in foresight - perhaps hindsight too! lol
Ob.
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