Member Info for Splendor

Yes, with good cashflows and steady deleveraging we are on track to an extremely good risk/reward balance.
Given that the Covid production decrease and sales pause is over when we get the FY21 results, I further assume:
1) the main business risk (the credit risk) has been mitigated last month by the financial restructuring - to create a sustainable balance sheet.
2) The business plan is well executed by the new management team thus reducing cost and increasing production volumes (we will see interim results of this next week) - to pay interest and repay debts.
3) The potential reward for PDLs mining potential in an increasingly positive diamond market is very good indeed for the coming years - to grow shareholder value ;-)

Hopefully, we will get the first early signs of recovery next week (20th April Q3 sales announcements), and then we will see how the market reacts in the short term... As a minimum we hold the current shareprice, but we might also double it before this year is over. If not as good as I hope, I will wait 12 months for the FY22 results and see if the debts can really be fully repaid by end of 2023, which will then kickstart a share price increase.
Worst case "nothing happens": PDL just "kicked the can down the road with the restructuring", has just enough cashflow to keep the enigine going but will have to refinance the current debt again before March 2026 (and I can sell well before then).
Alternatively, all works out as planned and my investment can grow 100% on an annual basis for the next 3-4 years without stretching the benchmark values of similar companies at all... Conservative targets in this scenario with a baseline of 1,4p: FY 2021=1,5p, FY 2022=3p, FY 2023=4,5p FY 2024=6p...
So, for me it is just time to hold and see what happens ,-)

SR123: yes, I also like to hear about the large discoveries. However, I am too far away from the operations to have aqualified opinion on the quality of the new areas they have established. But it sounds like it works for them with the new finds you mention, although I do not know to what degree these uneven lumps of cash are already counted into to their projected cashflow. As you say, they do find special stones almost every quarter så it might be part of their business... On the other hand, there are indications that their cashflow is improving with increasingly better reviews by the brokers the past few weeks.
My main issue has been a worry about PDL having too hard a time paying the interest, so they could not repay the loans in time, so that we as shareholders never get to see the upside. I think it will work out ok, but I am still holding (my breath) to wait and get confirmation of what FY21 looks like. But even if all my hopes do not come true, PDL still have until March 2026 before they need to repay the new bonds. So I recon there should be enough time to get the business up and running.-)

No - that debt has been replaced with new, longer term notes at a reduced level.

Ref. Moody's investor service 7th April 2021:
"RATINGS RATIONALE
The decision to upgrade Petra's CFR reflects an improved balance sheet and liquidity profile following the
completion of the company's capital restructuring in early March 2021. The restructuring involved replacing the
previous $650 million guaranteed senior secured second lien notes with $337 million of new notes (including
$30 million of new money). The remainder of the previous notes were converted into equity. The restructuring
led to gross debt being materially reduced to about $450 million from $810 million."

They also confirm that this gives PDL a much better liquidity outlook:
"There will be no cash interest paid on the new notes for the first 24 months, with payment-in-kind (PIK) interest of 10.5% accruing up to 9 March 2023 and cash interest of 9.75% to be paid thereafter up until the March 2026 maturity. This will allow for the company to focus on paying down its amortizing first lien senior facilities, namely the ZAR560 million ($38 million using 14.8 USD/ZAR FX rate and of which $11 million is available) revolving credit facility and ZAR1.2 billion ($81 million) term loan. Both loans have 3-year tenors."