spp price. discuss, page-5

Hi DirtK

Absolutely - I was referring to traditional debt (bank or senior secured note)

Mezzanine debt in simple terms Mezzanine debt capital with rights to convert equity if the loan is not paid back per the loan agreement. This of course is wide open to negotiation, but since this debt is subordinate to other debt (irrelevant at present to AKK) it carries aggressive terms as lenders are looking for high returns 20+%

Mezzanine Debt can be done quickly - little due diligence/collateral necessary (so for example a 1P Reserves report would unlikely be required - may only need to show title!!)

(really) Simple video...

http://www.investopedia.com/video/play/mezzanine-financing/


More business like full example - but easy reading
http://pages.stern.nyu.edu/~igiddy/articles/Mezzanine_Finance_Explained.pdf



Now I wasn't really going to say anything about the AWD debt facility as a comparison but there has to be more to that than meets the eye.

1. Who is "Gres Holdings Ltd" - googling only brought up AWD related links for me.

2. The $20M isn't exactly at 5%. Substantial fees also (like for example it is to be drawn in 2 tranches of $10M and a $1M fee payable on each drawdown)

3. The "asset" (without trying to offend anyone) is described by the farmout partner as "The Povorotnoye field is 8.5 by 2.5 kilometers in size with gas bearing horizons located at a depth of approximately 3,800 metres. The field is delineated by 2D seismic and by seven appraisal wells drilled in the 1980's that confirmed gas in the Maykop M3 and M4 reservoir intervals. Two wells produced marginally economic gas rates to surface, however all the wells were abandoned and the field was not put in to production."


Capital, or lack thereof, always the #1 concern.

PS: No answer as yet from GG