When you look around and analyse ALL the current issues and lending variables surrounding the Industry at the present moment coupled with and / or against the b backdrop of a rather Benign Interest and Yield curve Environment - it's not hard to see what potential positive announcement may be in the wings for AJM. And I'm not even a holder at the present moment.
Given that Stage 2 must , if not has to be high on the priority given their current production / sales profile beyond the next 12 months , I personally will be looking for a ' Senior Secured Note ' facility of perhaps US $300 Million , and possibly as high as US $400 Million with terms of at least 7 years with the standard non-call period of 3 years and an interest rate of around 4.5 - 5 %.
So even though the ' Institutional Subscribers or clients ' would in effect ' Own ' AJM in terms of security against it's operations , AJM would still own the production and EBIT , and with no convertible debt , there will be NO dilution to existing shareholders....
Ideally , and upon completion of the refinancing , AJM may then also have access to some sort of secured multi- currency ' revolving credit facility in the amount of perhaps between A $30 -$50 million.
I say all this folk's because of everything that is apparently happening concurrently around AJM / SYA / NAL / Nemaska ? and the ' Multi Jurisdictional ' Lithium Industries that AJM may or may not want to explore further.
I also believe this scenario to be the case as that's how it's done for ALL emerging GROWTH Companies. Bottom line is that while Debt is obviously essential - Debt with reasonable and competitive Interest together with realistically aligned Maturities is more the order of the day. Especially when a Company who whilst is obviously producing , is also still Ramping up it's production profile through both ' Hungry ' exploration and capital expenditures in order to satisfy it's Increasing Customer demand profiles.
I also believe it is fairly obvious , as indicated in their ' Proposed Debt Refinancing ' announcement of 2nd December 2019 and the attached offering Memorandum. They wouldn't have gone to ALL this preparatory work which is required if this wasn't the ultimate scenario. Not to mention that they actually stated in that announcement that they had actually commenced discussions with potential Investors with the ' AIM ' to refinance the current loan not Debt.
The only questions then are How much ? , What Rate ? , What additional Security ?, and What Maturity........and What Purpose ? should the Notes be substantially higher than the current debt. And all of these have the potential to ' Move ' the market .....and not just the SP of AJM.....
