loan repayment, page-2

Poseidon set for capital raising to repay loan from Andrew Forrest.

http://www.theage.com.au/business/poseidon-set-for-capital-raising-to-repay-loan-from-andrew-forrest-20140123-31br4.html

Andrew Forrest's Poseidon Nickel will attempt to bring fresh money into the company at the weekend, which could allow it to repay a loan he made to the company.

Shares in the struggling explorer went into a trading halt on Thursday before the capital raising, which the company believes will be better received than its numerous attempts to raise money in the United States last year.

Mr Forrest, Poseidon's biggest shareholder, has a stake of just less than 33 per cent. Poseidon has been unable to repay an $8 million loan from him which fell due in October.

Poseidon's annual report said Mr Forrest agreed to extend the loan by a year at 13 per cent interest, and requested the company repay through ''the proceeds of an equity raising as soon as reasonably practical''.
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This weekend's raising will be the first attempted by Poseidon since the loan extension.

But since the repayment is not due for more than eight months, Poseidon may be more likely to raise the money for investment in its own business.

The company hopes to revive the famous Windarra nickel deposit in Western Australia, which was part of Australia's first nickel boom in the 1960s.

When asked if the money raised would be used to repay Mr Forrest, Poseidon chief executive David Singleton declined to comment.

But he said the market's attitude towards nickel had changed since one of the world's biggest producers, Indonesia, banned raw nickel exports.

''There is no doubt there has been a huge swing in attitude from very negative on nickel to moderately positive on nickel, and that has all happened in the last couple of months,'' he said.

''People are starting to understand the only way is up.'' Poseidon's share price has risen by more than 50 per cent in the eight trading days since the Indonesian ban.

Bloomberg records show Poseidon board members Chris Indermaur and Geoff Brayshaw increased their holdings in the stock before January 16.

In a note to the Australian Securities Exchange, Poseidon company secretary Ross Kestel said the trading halt was expected to last two days, and if another announcement to the market was not made before 10am on Tuesday, the company would request a full suspension of its shares.