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Let’s not forget Dev doesn’t have a pot to pis in. This whole process is subject to supervision by an insolvency judge under the JRP. If the agreed terms of JRP are not implemented JRP is converted into a liquidation. Dev then ceases to exist. So to the extent creditors are better off in JRP and Dev survives with injection of external funds then all good. Dev can’t just decide to move the goal posts and in any event any funds from sale of the ore are paid into court not to Dev.
I’m not expecting RNS Monday given the shenanigans, but I don’t think we are far away now. Iron ore hasn’t been shipped from Santana for a long time. Now we have the ship and the court activity. Who else is the ship there for?
With any deal there is the risk of one party pulling out right up until the ink is on the page. But let’s not forget the banks want to get paid and dragging this out to the end of days is not going to put cash in their mits. Sure they’ll negotiate hard and try to screw the scrum but sooner or later the deal has to get done.
IT looks to me like when the creditors filed the appeal, they also requested an injunction to stop any shipment pending the hearing of the appeal. The injunction has been rejected meaning there is nothing preventing shipment proceeding. That's my best guess from the court updates.
Court website further updated:
Petition Waiver of Mandate / Attached Charge
Protocol No.: WJMJ.20.41623389-9 Petition Type: Waiver of Mandate / Charge Date: 10/15/2020 4:29 PM
No doubt drafts of docs going back and forth. Negotiating words and phrases. Reasonable or best endeavours Etc etc. can easily take a couple of weeks with multiple parties and time zones to contend with. Prize in sight.
Agreed. For me this is a 50m MC cap company on a VERY conservative basis - it then re-rates towards 100m.
20% of Amapa drops straight onto the balance sheet which Anglo previously valued at 660m (with iron ore prices more depressed than they are now). The value disconnect can't last.
This is great news. Confirms what i said previously that if there was a deal to be done it would be done soon so as to avoid the unnecessary time and costs associated with a further hearing. They will have been negotiating on the basis of a draft of the contract which we are now told is agreed in principle. Essentially this is telling us they need to execute the agreement and then INFORM - not seek approval (but inform) - the JRP. These are simply formalities and the parties will want to get this done now agreement has been reached. The next RNS confirming all this is not far away in my view. the rerate is now officially on and this needs to churn through those placing shares (& at least people don't need to start fretting about an imminent placing as that is out of the way)..
My view is that this all seems to be a bit of posturing and a technicality over whether the status of the bank's security (mortgage). In the end this all comes down to the to the negotiation of terms which is ongoing. If a deal is possible then I would expect it to come about soon as all parties will be keen to avoid unnecessary legal costs which will start to be incurred for this next hearing. It's all about the figures at the end of the day and nothing has changed in that regard.
From the judgment on 28/7/20:
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 other interested parties 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 must be observed, which satisfactorily serve the interests of the Banking Union and other creditors. For this reason, I maintain the sale authorization, with the aforementioned precautions, providing for embargoes in that part.
Basically, the court seems to have become annoyed with the bank creditors dragging their feet and therefore ordered that the sale could go ahead with the compromise being the sale proceeds had to be paid into a court controlled account. Clearly the bank creditors are unhappy about that as they are saying they have, as term of the original loan of $135m (in 2013), security over all the iron ore, i.e. INCLUDING the stockpiled ore at the port. As such, that can only be sold if they have authorised it (which they haven't) and that the sale has the effect of ignoring their security over the iron ore ("emptying the chattel mortgage"). In effect, the banks want to have control of any sale and the resulting sale proceeds. Hence in the latest court ruling:
that defendant Zamin disposes of iron ore to third parties immediately, significantly emptying the asset subject to the chattel mortgage. In the alternative, they ask for the acknowledgment, also preliminarily, that the limit of US $ 10,000,000.00 (ten million US dollars), established by the hostile decision, refers to the gross sale value of iron ore. They advocate, in the end, for the provision of the appeal, reforming the r. decision aggravated, removing the authorization for any disposal of iron ore "which is not expressly authorized by AF Minério de Ferro and which does not have prior and express authorization by the Creditors Union".
Managed a few at 11.5p. Couldn’t buy the cheap ones sub 11p. I can see a flat finish or maybe even blue. My take is that the bank want a slice of the surging ore price and seeking to push hard on price. Appeal is attempted to gain some leverage in negotiations.