Member Info for Unnd

Brattus - for some reason the BOD have never considered a Rights Issue. That would give ordinary shareholders the opportunity to minimise dilution. I am not sure if the timescales in this instance would allow it, but previous raises could have involved a rights issue.

I see your point now.

The BOD by issuing themselves a convertible Bond have aligned themselves with Bondholders. Once reported the ASC can then decide if that was an appropriate action at the time or indeed against the law or regulations.

RBMinvest - 'A third party incentive should not be utilised, in this case the inducement was an Anavio bond, not a COPL share issue.'

They are not Anavio Bonds as you state. The Bonds are issued by COPL!

RBMinvest - i am not clear on your illegal point.

Are you saying that the following from the 06/09/23 RNS was illegal.

'The Directors have agreed to waive all cash payments for services during 2023 (expected to total approximately $0.5 million) in order to assist with the liquidity management and cost cutting at the Company. The existing Directors will instead each receive one 2028 Bond to be issued by COPL. These bonds will be issued on or around December 31, 2023. In connection with such bonds, the Directors will not have: (i) voting rights; (ii) the ability in the first year to convert such bonds into shares in the Company; (iii) the ability in the first year to receive shares in the Company in lieu of cash payments of principal or interest under the bonds; and (iv) the ability in the first two years to receive shares in the Company in lieu of make whole payments in the event of a bond redemption.'

Please also note that the Bonds have not yet been issued.

The only guilty parties here are Art Millholland and Ryan Gaffney with their untruths and financial incompetence.

All they needed to do was increase production over the last 12 months and they failed. In fact it has decreased.

If they had increased production then the SP would still be 20p and the conversion price of the Bonds would still be 13.25p.

They did not increase production and constantly went back to the SL for waivers and to the Bondholders for additional funds.

The SL and the Bondholders are doing what SL's and BH's. I remember a poster stating some time ago that COPL had let the fox into the hen house when signing up for convertible Bonds.

The current position is all down to the ex CEO and the CFO - total incompetence.

COPL as the parent company of COPLA have been forced down this route by the SL. Some poster think that COPL should have let COPLA go into liquidation and take a chance on the asset sale. IMHO the Anavio route is not ideal but is preferred as it gives more time to sell the necessary assets.

Eddyc22 - the likely answer to that is to stop the SL demanding immediate payment on 01/01/2023. In that scenario the liquidator of COPLA (a subsidiary of COPL) would be under limited time constraints to sell COPLA to repay the $50m debt which would be the primary objective.

Eddyc22 - it is in COPL's and the Bondholders interest to maximise the sale of the assets. Peter Kravitz now has to convince the SL that they have a business plan in place that will enable the SCF to be repaid, if not then the SL will demand immediate repayment on or around 29/02/2024.

Chickster - 'Senior lender, dismayed at the breakdown in talks and pi**ed off with the never ending stalling and diatribe from COPL decided enough was enough and wants to see progress now. Cowan forced to step down. No more waivers and no funding so only option is to sell off some assets.'

Absolutely agree.

On top of that no increase in production despite the constant diatribe from Art about an increasing production curve.

Jazzyjim - you have just proven the case. No one knows what the asset price will be under each scenario so nothing can be proven either way. Simple.

Jazzyjim - it is not a fraud it is a mathematical calculation. In any scenario Shareholders are last in line. We may not like it but it is fact at this time.

Jazzyjim - the shareholders loose out in any scenario. By injecting $2.5m to keep COPLA afloat Anavio and the SL are ensuring that they control the sale of the asset to ensure the best price for COPL which also ensures best return for Anavio and the shareholders if the sale is in excess of $101m. It is all subjective at this stage but good luck in proving that Anavio have committed fraud by injecting $2.5m.

Jazzyjim - it is in the best interests of the SL and Bondholders. Shareholders are now collateral damage to them.

Good Point Coplherder. However if Anavio converted and held over 30% would they have to offer to buy out the remaining shareholders at the highest price they paid over the previous 12 months?

We have all been royally s*****d, including the SL and the Bondholders, by the untruths and financial incompetence of Art Millholland and Ryan Gaffney.

The SL and the BH's are now doing what is in their own best interests to recover as much as they can from this fiasco, which now means asset stripping.

By extending the Bond maturity date the BH's are now entitled to a further $3m in make whole interest on conversion or 'Early Redemption'.

The SL will be entitled to the first $50m (including rolled up hedge debt), or part thereof of, of any asset sale.

The BH's will then be entitled to the next $51m, or part thereof, of any further sale proceeds under an 'Issuer Early Redemption' notice. The cost of the Bonds to the BH's was - 107 Bonds x $200k x 80% = $17m. The BH's will shortly provide $2.5m in funding, therefore they can in theory accept anything above $19.5m to break even.

There are probably other trade debtors who will be entitled to payment ahead of Shareholders.

However in simple terms the Shareholders will be entitled to any excess proceeds of any asset sales above $101m.

That excess will be divided by 2.35B shares if/when COPL is wound up.

Hope the above clarifies the position for some.

Some posters appear to be underestimating the debt which is as follows:-

COPLA - $50m owed to SL with the hedge debt rolled in.

COPL - $50m to Bondholders including make whole interest payments.

If funds are not found by 01/01/2024 it will be the subsidiary COPLA that will go into Administration or protective measures if the SL demands repayment of the debt.

Deadgrateful - the RNS on 06/10/23 stated 'This financing package is designed to ensure the Company is fully financed through Q1-2024, at current production levels of approximately 1,200 bbl/d,'

'COPL America, Inc., will be in breach of the terms of the Senior Credit Facility on or before January 1, 2024.'

From the above it would appear that COPLA may be in breach of the $1.5m liquidity covenant before 01/01/24, and/or in breach of the increased liquidity covenant of $2.5m on 01/01/24.

In the absence of a further waiver of the liquidity covenant COPLA need immediate funding of at least $1m plus further working capital. If not then the SL may enforce payment of the SCF debt which could lead to protective measures, if granted by the court under CCAA, or liquidation of the COPLA assets. The current debt of COPLA is circa $50m which includes the rolled in hedge debt.

One of the reasons for the reduction in cash is the fact that the recent $4m funding until the end of Q1/24 was based on production of 1200bopd, which as we now know was not achieved in November which was 1065 bopd.

Additional funding, if obtained, will depend on COPLA demonstrating that they will be a going concern in 2024.

Time is certainly of the essence here.

The SL could demand repayment of the outstanding debt on 01/01/24.

The debt is circa $50m with the hedge debt rolled in.

I know beggars cannot be choosers but my preferred option if possible is to extend the SL debt by say $2-3m rather that go down the placing or Bond route at this low SP.

COPL would need to convince the SL, or any other funder, that they will be a going concern in 2024.

To be a going concern COPL would need to raise production to 2k+ bopd by around the end of Q124.

Can they raise production that is the million dollar question that has not yet been answered by the CEO.

At present it is still BAU and so we should still get 2024 production guidance prior to the end of 2023.

Alfreso - spot on.

COPL need $1m+ to maintain the liquidity covenant.

A Funder will need to be convinced that production is rising to show that the funds can/will be repaid in future.

All about that inclining production curve that has been promised for so long but is currently illusive.