I came to the conclusion that it would be an equity based solution because in the 12 months to June operating cash flow was negative $10m making orthodox debt finance difficult to obtain in my view UFC.
At least over and about the $25m project finance and $11m coal funding that they already have. It also fits with the fact that the standby facility they have is now described as an equity standby facility. I'm sure it would have been in CCC's best interest to get a debt standby facility at that time if it was possible. And I always assume that CCC mgt is acting in the company's best interest. Its just not always possible to get debt deals!
The other fact that points away from a new debt facility is that I assume they have been trying to get one of those for a while. It is unusual in my experience to leave refinancing of debt, here $4.9m of converts, to two months to maturity. That does't mean they wont get a debt facility, just that its obviously not been easy going for them.
I wont be shocked if they announced a new enlarged debt facility that consolidates or their debts but I would be surprised. It would be pretty positive event for me if it did happen and sufficient terms were announced to work out the cash flow impacts.
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