ALL IMOKnowing the person that arranged the original NAB loan......

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Rhino1963

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27/02/24

21:32

Post #: 72629934
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Originally posted by wolfk: ↑

I’ve done work in the SME lending space, I can guarantee you that with the cash position and financials that ECS is unlikely to have approached any other lender. To simply quote that NAB wouldn’t extend the facility doesn’t rule out not approaching other lenders. The effort required to run a capital raise and draft the prospectus alongside the investor relations side of it is far more effort than a simple SME loan. Big banks are not the place for this type of loan.

Nan and management would be well aware that they are being criticised for this, and rightly so. She has decided to take on the political approach and given a response with a lack of any meaningful insight. She is within her grounds to state that they couldn’t increase the NAB facility. But NAB and the existing facility + a Bell Potter capital raise at all time lows were not the only two options available. If management went down this path without seeking alternate options (which they have refused to discuss) then to me and the rest of us shareholders, they simply didn’t think to increase funding any other way. Which then to me, indicates that the cap raise was unnecessary and there’s some incentive to have conducted the raise. Because in any world, liquidating your assets before using an option that doesn’t liquidate is always the first priority, especially when you’ve already got over a billion shares…

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ALL IMO

Knowing the person that arranged the original NAB loan...
I can assure you that many potential lenders were canvassed for finance.
At the time there was no chance of anything but asset backed finance.
The cashflow was simply not strong enough.
There was also the challenge of finding a lender willing to lend to a company producing a controlled substance.

If you know the lending space you would also know how conservative lenders actually are.
We call it the 4F rule? anything that Flies, Floats, Fornicates (i.e. brothels) or Federal Govt controlled (i.e. MC) is difficult to arrange finance.

Could another lender show appetite?
I think so, but they would be non-mainstream, opportunistic and have a non-commercial rate e.g. 30%pa.
This would not palatable and to ECS nor the market.

You continue to rant about other options.
You appear to be refusing to listen to logical comments nor Nan herself.

BTW Nan was aware of the change in German law regards MC and IMO forecast big short term growth in that market and the rest of the EU as a result. Nan and the ECS team sees it as a massive opportunity to prepare to address a market expansion. If you don't address it, your competitors will pick up the slack. Being in business is all about defeating your competition. Nan and the team have decided this is one opportunity to defeat the competition and grow the business faster than organic growth can allow.

Cheers

ECS Price at posting: 2.2¢ Sentiment: Buy Disclosure: Held
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