how lynas can get out of this mess

Thinking about the issues facing Lynas they are mainly twofold:

1. China = Too much undisciplined competition and an industry that has tried to frustrate Lynas at every turn to achieve their aim of industry domination

2. Delays = The amount of red tape that Lynas has had to jump through has meant years of delays and a project arriving at the worst supply/demand point in the cycle. Which in turn has led to cash flow issues and another pending liquidity crunch for the business

How they can overcome both of these issues is by placing 15% of the company to the Chinese at a discount (the Chinese could even apply to FIRB to take this holding to 20%). Yes this placement will lead to more dilution of existing shareholder, however there are strong reasons why it will remove the two big overhangs for the share price. Firstly it will get China onside for the first time ever, so that their interests are finally aligned with the company and the parties involved can then return to normal competition. Secondly it will solve the liquidity issues facing the stock, as it will provide much needed funds to take the project through to realization of full sales volumes.

Maybe this is something management can discuss with their JP Morgan bankers. It would be a lot better idea than placing shares to the current group of twitchy retail investors.