Hi Klu,
Those are the 225,000,000 Convertible bonds. My understanding is that they are convertible in the following way:
225,000,000 / .75 (exchange rate) = 300,000,000 converted at $0.10c = 3bn shares.
Effectively the $225M USD loan can be converted into equity of 3bn shares (regardless of share price). Do others on here share this view?
Obviously they would only do that if the SP is higher than 10c so they can convert and sell the shares on market to recoup more than their loan amount. My preference as a small share holder is to avoid dilution and use profits to repay the debt which will push the SP higher.
Whatever 'profits' MtK make on the conversion comes out of Lynas market cap (i.e. the SP)
Lynas is a bit hamstrung in that it has another agreement with JARE to preferentially repay its debt - so I can't see a mechanism for Lynas to repay MtK instead of the conversion. I hope I'm wrong and someone way smarter than me manages to find a way - at least to some degree.
LYC Price at posting:
10.0¢ Sentiment: Buy Disclosure: Held
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