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Zjin as saviour?, page-23

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jmcotseeya

132 Posts.

30/07/14

17:25

Post #: 13740138
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Originally posted by burntgamber ↑

Any investment or trading in specs is a gamble. I realise this from day one. If I lose its a loss that I can afford, this is the main thing. As for the mansion I am talking about my overall position. Been in this for almost 20 months. Mainly got in around the Options Rights Issue.

As for my mate, he is still in NKP. As for his information its been accurate enough to date and this includes hurdles that NKP (more particularly Genorah) still has to go through.

One thing I will say is that NKP management does not have a good reputation when it comes to delivering and that our South African BEE are not an efficient mob. This was proven back in May 2013 to October/November 2013 when it took them 5-6 months to approve of the Zijin $20m convertible bond. My personal view is that this 146m NKP share sale from Genorah to Zijin may take another couple of months to get over the line just going by the way Genorah dealt with the $20m convertible deal.

Arguments on this thread is polarised like politics. One side will keep saying its positive and things are immiment while the other end is "its dead in water". I see the truth as being NKP will eventually drag itself over the line. I have stated before that those with a 30cents+ average may see this as minimisation of losses or limited gains especially a lot of these people have been in the stock for at least 2 to 4 times longer than my 20 months.

Lets just go by events:

If the 146m NKP share sale does happen Zijin will end up with about 380m shares and Genorah will have about 200m shares. This is essentially a change in control. Fully diluted NKP has about 900m shares and 270m NKPO. This will give Zijin 42% having spent over $40m.

The transaction for these 146m NKP shares is for about 12.5cents each. if Zijin wants to do a takeover lets just say that they only pay a control premium on the 12.5cents, and say its industry average of 33% this means 16.6cents. Even at 16.6cents I am still up big time but most likely many people will not be happy with this.

Genorah selling their 146m NKP shares will have to pay off their $5.5m loan to NKP and $1.6m to Jin Jiang. Knowing these guys they probably have some other bills or other separate loans that they have accumulated on the side. Is this a distress sale? Probably yes. Other people can make up their own minds.

If Zijin buys the rest of Genorah I can only assume its higher than 12.5cents. How much higher I will have no idea. If Genorah can get say 18cents for the rest of their 200m shares, so going by a 33% premium its 24cents to minorities. Ok people may say why would Zijin pay Genorah say 18cents and then pay us "mugs" or "arrogant ones" a higher price. Reason is that Genorah still retains a 26% holding on the project level hence they should not receive a control premium. I am just using 18cents because its divisible by 33% so do not take it too literal. I would think that at 18cents Genorah are probably not getting the best deal since they are not in a financially distressed state.

I do see 25-35cents being achievable as an end result. Problem is going to be the timing.

Then again in the eyes of some this is a "arrogant bogan" talking here

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Everything you have just said is waffle. Understand, the DMR will effectively strip half of the asset. Start playing around with dilution calculations after the event. That is a best case scenario. I expect many more years of legal stasis.

NKP Price at posting: 6.1¢ Sentiment: Sell Disclosure: Not Held
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