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WoodySpoon

9,586 Posts.

2892

30/07/21

13:42

Post #: 54905918
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Originally posted by Karl89: ↑

Throwing something out there, interested if anyone else is gauging something similar.

Firstly:

originally I thought, with the way the announcements were written up, that Ganfeng would firstly aim to get a loan for the us$64m and have their own usd$40m on the line as a loan if they were unsuccessful securing.

Ive been revisiting this thought and it reads different to me now. the more I read it, the more this actually is put to them as an option of which they would rather.

secondly:

With the announcements I’ve read, I’m of the opinion Ganfeng will be become a Substantial holder of LithiumCo on demerger.
we know: FFX to hold approx 20%, FFX holders to hold a % of free shares… however it’s fairly obvious, given LithiumCo starts as a company in construction, they will require significant funds.

Ganfeng holds a bit of power here as if the choose to provide the capital, an additional us$24 by all parties to reach Capex US$194m

so LithiumCo would need an additional us$11m (45% to cover gov free carry) for construction costs plus you’d want atleast A$20m - $30m sitting in the bank to cover 4 years of directors fees / company costs without income ?

this opens the door further for Ganfeng to buy in a more substantial holding into LithiumCo. If you have a look at Ganfeng website, it’s common practice for them to hold a substantial holding in their partner.

FFX 20%, Ganfeng + instros 30%? , existing holders 50%
if we threw an initial opening market cap of say 200m for LithiumCo.

LithiumCo opens with A$60m (minus -a$15m construction + fees) approx a$45m in bank.

some obvious things here, Maybe they don’t need to sell 30%, maybe the initial deal will be more that market cap $200m, i prefer to downplay. But it has got me wondering and worth bit of discussion / people expertise on here.

thoughts?

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I wish I had three hands, so I can give your post three thumbs down.
If current holders were to get only 50% of 50% of the lithium project there’d be a riot & MA can pack his bags IMHO. Not happening.
Ganfeng providing the full capex in buy in and debt obtained. FFX to put in some working cap for their retained slice and holders keep the rest with perhaps a SPP to raise $10 mill at most.

My two bob

FFX Price at posting: 40.5¢ Sentiment: Buy Disclosure: Held
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