So I guess following those 2nd and 3rd application for quotation of securities notices announced yesterday.......Why wouldn't you be stoked that Piedmont has now gone to approximately 19.9% holding in the Sayona Australian Parent Company .....and of course also now 25% of Sayona Quebec.
And these TWO trances A and B of the convertible notes were proposed to be issued on 11th January , issued on 13th January , and approved at the BOD meeting on 10th March ( re: resolutions 3 and 4. )
And if you review the set up of these TWO tranches you will see that that they BOTH had 5 year maturities @ 8% interest payable annually and commencing 1st April 2021 with Tranche A. representing 336,207,043 notes maturing on Sat 10th January 2026 , with Tranche B comprising 81,000,000 notes maturing on Sun 11th January 2026.
So whilst there was a method to Sayona Management's strategy in issue notes at this time in lieu of shares - because it would preserve it's ASX 15% capacity limit on issue of shares which is then proceeded to use in the rights issue.
So apart from this clear reasoning , I would still ask at least TWO important questions as to WHY Piedmont chose to convert them now as against receiving 8% each and every year for 5 consecutive years.
O.K so in answer to one of these questions is the simple fact that the difference between the Interest of approximately $300,000 per year doesn't even come close to the current difference of SP price of 6..6 - 6.7 cents as against their approximately A 1.12 cents ( US .092 cents ) which equates to some Paper Profit of $A 23,233,767. So why wouldn't you convert them as the notes were not listed and the equities obviously are.
So if we examine the 3 reasons for conversion outlined below in the terms of the notes , we can see that Piedmont has rather assertively elected to convert them just 2 days after the Completion of their Project Investment which was announced by Sayona on the 8th June ( just 2 days ago )
1.)Piedmont may elect to convert the Tranche A Convertible Note onnotice to the Company before 5 years from the issue of the Tranche AConvertible Note.
2.) Piedmont must immediately convert the Tranche A Convertible Noteon completion of the Project Investment if Resolution 4 is approvedand in this case, no interest is payable.
3.) The Company may elect to convert the Tranche A Convertible Note ifthere is a change of control.
So that leaves my other question as to
WHY have the TWO separate Tranches in the FIRST place if , Piedmont had obviously every intention to convert them once their Project Investment was concluded with its 25% ownership in Sayona Quebec. Couldn't they have made it just ONE larger convertible note of 423,973,866 shares.....
So to me they must have previously thought they would convert them on TWO separate occasions , but have now done them BOTH at once.
Ans soo the only thing I can think of apart from that is that because they had to complete the 25% of Sayona Quebec part of the transaction before it goes before the Courts , and so therefore this FINAL concluding part of their Investment transaction ....being the 133,967,099 convertible notes make the whole thing ' Intrinsic ' , interrelated , and dependent on each of them ( ie both ) now being completed BEFORE the NAL documentation is actually inked and finalized.
And the reason for this is that instead of Piedmont having 25% of Sayona Quebec as the deal may have been first conceived , they will now move to 39.9% of Sayona Quebec which I would have to think would be easier in getting it done NOW rather than after the 2nd of July when the Monitor finalizes his brief to the Court for its approval.
So its not as if you can just rock up to Court on the day and say ....Oh no it's not actually 25% now , but its going to be 39.9% next week , the week after or at some other time in the next 5 years.....so effectively Sayona then selling down in part its original BID proposal ....which I would think would then need some sort of ' Sell Down ' clause built into BID being put before the Courts.
So in my opinion , the Sayona SP should be rallying on the concept that Piedmont now controls 19.9% of us and would appear that the Documentation and consultations no doubt taking place should be providing strong legs on the thoughts of the deal finally being ' Positively ' completed and going ahead without interruption.
(20min delay)