Lynas-Japan...potentially a new stock issue, page-16

Originally posted by toly

Youneed to look a little closer.  Debt is USD 165M .   It is possibleif NdPr prices rise to 400RMB /KG  for NdPr.  At today’s REO pricesyou just cannot make numbers work.    400 RMB is an averageprice over next two years not the price 2 years from now.  

Sellan asset.  Sounds good.  What asset?  Lynas is a complete company.  What asset could easily be broken out?   Mt Weld?   Lamps?     If you see something easily separated could you let us know what it is.     Please!

JARE is not a manufacturing company or a bank.  It is anorgainization of a bunch of Japanese companies  and (Japan’s government?) Set up to assure a non-Chinese Source of REO.  I have lost count but theyhave Re-negotiated terms at least 3 times, the last one October  2016,and this was major. https://www.lynascorp.com/Shared%20Documents/Investors%20and%20media/Announcements%20and%20media/2016/161026%20Amendments%20to%20Debt%20Facilities%201609212.pdf.    The idea that JARE will not do it again just does not make sense.  Even if NDPR prices are still in low 300 RMB range Lynas will certainly be able to  handle a USD 100M to 140M loan with traditional terms easily!  I know they owe USD 165M now, but even if REO prices fall a little more they will pay off some of this in the next 20 months.   Summer of 2016 I thought Lynas Bankruptcy was certain.   I was very wrong.  When it did not happen I went back and studied all deals  and the make up of JARE.   If you do this  you can answer your question “Why would the JARE extend the loan beyond July 1, 2020 when on July , if the loan has not been paid in full,”    I am not going to post all the links but if you want to understand all this start with, "a special purpose company (SPC) established by Sojitz Corporation (Sojitz) and the Japan, Oil, Gas and Metals National Corporation (JOGMEC);"   this is JARE before they were JARE. 

Originally posted by toly

Hi Jim, first of all Lynas is sitting on ~65m in cash. All payments are current and the rare earths keep flying out the door. In other words Lynas has zero issues with extinguishing debt and appears to be holding back a little cash for a rainy day. One would think it should be quite easy for Lynas to float a loan if needed...

Secondly, I can assure you that the Lynas staff is completely competent and are on top of all of these issues. I know for fact that today they are breathing a sigh of relief when they look back at the early days of JARE. Things (with JARE) have evolved into a great relationship and the staff are beginning to have fun these days (baring Fuzzy of course)... Sometimes you just have to trust the driver... JMHO...