Running discussion on SP, page-42258

@Roller62 I don't know why you've become so against pre-paypayments recently, though I assume it's a defence mechanism given the criticism AVZ has received from non-holders about getting no cash up front - typical

Pre-payments IMO can be a very useful thing for a company, not only to provide additional cash flow without adding dilution (to avoid CR's, provide time and space for finance negotiations to proceed without being pressured into terms by dwindling funds, provide scope for payments for things like long-lead items or additional project ownership % without adding to the pressure mentioned above), but also to provide a more cemented proof to the market of an offtakers belief in the company. This can result in a greater likelihood of the partnership playing out on the agreed terms - at least until the benefits from the 'payback' having expired. This can help with negative perceptions about doing business with certain regions like China.

you go on and on about how the discount PLS is taking from these prepayments is screwing them - without the detailed financials it's hard to prove otherwise. It also does seem like the funds gained may not have been used as had been planned, due to other issues that company had. However if negotiated and used appropriately prepayments can act as a low interest, medium term supporting loan, paid back when there is actual cash flow to support it. The discount (typically under 10%) is withdrawn after the up-front funds were paid back, occasionally alongside a low level of interest. Financiers, whilst preferring incomes to be free of piggybacking, are well-used to such mechanisms and it's not seen as a stumbling block to providing debt structures.

prepayments are not the devil or creeping threat you seem to be portraying them as, for your own reasons in your non-stop battle against PLS and FFX holders. I certainly wouldn't be against receiving one at AVZ, if our management thought it in our best interests. Yes we have a cache of funds now. However for instance if the long-lead items we require are in the multiple millions of dollars, and finance discussions become extended, then it may have proved beneficial to seek prepayment on at least one of the offtakes rather than provide other equity negotiating parties for instance with a potential pressure point.

Anyway just my thoughts - I doubt it'll matter either way but just got irked by Roller's continued baiting/attack response