Ann: Trading Halt, page-50

I have so many punters on ignore that the thread is relatively clean now. I refuse to waste my time feeding the online trolls.

One of the lines being dragged out and flogged to death a while ago was the moronic idea that they would simply be carrying out a "dirty" raise for working cap & that it wouldn't be linked with the overall funding package in some way. I'm not sure how anyone could have made such an assertion when Baz has consistently put out vids indicating how close they are to finalising the debt finance.

It was unfortunate that they lost time last year for reasons we have already fleshed out. And as they are almost outta funds, they have been forced to raise. But, I would suggest that this isn't the only reason for the raise.

Allow me to elaborate.

Obviously, any money raised is partly for working cap, but the size of the raise will determine the size of the bond issue, but more importantly to satisfy certain conditions as outlined by the bond issuer. Typically, this would entail a deposit to be placed in an escrow account (inter alia). Remember, the issuer sets the conditions, not Cyprium. The latter agrees to the terms. In addition to this escrowed amount raised via equity, the issuer may demand that they spend "x" amount of the funds raised on the Nifty project and not elsewhere. Please keep in mind that I am speculating here and am not privy to any details as they pertain to Cyprium. Just sharing a broad brushstrokes view on how these deals usually work.

As such, I wouldn't fret that this is a standalone raise as many would have us believe. It is very normal for a bond issuer to request an equity raise pre-issuance. To reiterate, the bulk of the finance package will be debt, but we have to cop some dilution to get it over the line.

Let's say for argument's sake that they raised A$40m (400,000,000 x 0.10c), then add A$50m for the Transamine facility. This would leave them chasing a US$120m Nordic bond (A$170m). This would represent a 15:85 equity/debt mix. I am speculating here with numbers, so you can work out different equity/debt mixes.

You may be thinking "Dayum, that's almost 60% dilution". Again, I will cop that to see them make the transition from a developer to a producer. If only most punters could understand just how difficult it is for a company capped around A$100m seeking to raise 2-3 times their MC and predominantly via debt. It is nigh on impossible and only a handful of companies can get these deals over the line.

p.s. Thanks for sharing the vid, Peter.