conti borrows over 2mil from range resources., page-54

This is an interesting find Hairy. After reading the thread I can't resist making a few comments. These are those:

- People who attack the poster rather than trying to understand what's happening here are not looking after their own interests. This is probably nothing. But in the past companies borrowing when they apparently had sufficient cash has been a warning signal. Parmalat in Europe being the most high profile case where they continued to issue bonds despite having billions in the bank. It was all well explained by the company, global subsidiaries, tax reasons etc. In the end of course it turned out the cash was fictional.

- JB's answer didn't make much sense to me. He says they ran out of cash at the parent. That is clear. But do they really have cash in SA? Why not transfer it? He doesn't say. There may be some small inconvenience but borrowing the money off Range is pretty desperate to me. Surely Range is in breach of their responsibilities to shareholders by providing cash to a random SA coal developer, contractually and structurally subordinated at 10pc. (Especially given the entity they are providing money to has no assets except shares and is by definition out of cash!). For CCC holders it also shows how PL is prepared to treat minorities. How would you feel if CCC started lending sub money to NKP?

On this topic, I would add, who is the mystery lender, apparently unrelated? There was another million lent on the same terms. Perhaps to demonstrate it was on arms length terms? Strange. Who was the lender?

Finally. Lack of cash also explains why they keep paying people in shares. Despite the message this sends about the share price and the annoyance this causes most share holders.

- So I think the group ran out of cash. That is temporary of course with several large sums pending.

But what of the $11m in the bank? I think that can be explained. We know the of the $11m, $3m effectively comes from the loans. So its $8m for the purposes of this point. $6m of that $8m we know is locked up. I think that was pre Penumbra start. So perhaps the performance/environmental, whatever, bond on Pen is about $2m-$4m. With these guys we wont find out till they have to disclose in the annual report. So anyway pre the loans there may have been about $8m of cash that was probably restricted.

- This leads me to thinking about available debt facilities. Remember the $27m debt facility that was announced and disappeared? Well a lot the cash inflows debt or otherwise CCC have announced have never been received. They assured us on several occasions that the balance of $25m convert (with hefty up front costs) was still available. That has proven to be just a lie. $16m is drawn and there's no mention of further availability in the reports any more. The extra $20m from EDF has never been drawn. $15m was subject to settling Mashala, the balance "other conditions". I think we all know its toast, despite again upfront costs of 30pc or something. That latest $65m ABSA facility? Still need to meet unknown conditions. It sounds like the first $35m tranche for Pen will eventually be drawn. The balance is subject to even more conditions. Will CCC ever see it. Best guess. Nope.