RCPS, page-6

I thought I would try do some calculations around this.

So what are we looking at?

A placement of redeemable convertible preference shares (RCPS) for an amount of A$11.3m was
undertaken to institutional and sophisticated investors at an amount of A$0.022 per share
– 12 month maturity date, convertible into ordinary shares in Bathurst
– Redeemable for the issue price (A$1,000) plus any unpaid dividend
– Dividends payable on an semi-annual basis at: 8% per annum if the Sale Agreement is conditional, prior to the 6 month dividend period; or 12% if the Sale Agreement is unconditional and Bathurst elects to convert some but not all of the RCPS
= up to 513,818,182 shares any time between now and expiry being 1-Feb-18
Thoughts: BRL may have to redeem some shares - but it would seem silly to redeem all of them, and the "purchase price being reduced" commentary they have now used in presentation/market releases at least 2 times should not only give us an idea about the impressive cash flows coming out of stockton, but likely directly impact how many RCPS BRL may elect to have converted (ie more profits = less RCPS issued)

A placement of unsecured convertible notes (Convertible Notes) for an amount of A$7.5m was
undertaken to institutional and sophisticated investors at an amount of A$0.0375 per share
– Features include a 4 year term and a coupon of 8% per annum, convertible into ordinary shares in
– Redeemable for the issue price (A$1,000) plus any accrued and unpaid interest
= up to 200,000,000 shares any time between now and expiry being 01-Feb-21
Thoughts: the note holders can choose to convert them anytime between next month and 01 Feb 2021 - this means there may not be 200 million shares dumped on the market all at once.

Convertible Note issue announced back on 19 April 2016 to Republic Investment Management Pte Ltd (RIM), details:
Principal – AUD$4.25m
Conversion price – AUD$0.022 per share
Coupon – 8%p.a. (payable semi-annually).
Maturity date – 3 years on anniversary of the issue date.
= up to 171,636,364 shares any time between now and expiry being 22-Jul-19 (21,545,454 shares have already been converted - the note holder can chose to convert them and when)
Thoughts: RIM has, perhaps smartly, not dumped there 200m odd shares on the market all at once - the note holders above, of which RIM could be part of, will likely not do the same (I would like to think) and may be happy to keep receiving their coupon rate rather than paper gains (they don't get the coupon if they convert right?)

So in total, sometime between now and Feb 2021 (3.5 years away!) we could see up to 898,454,546 shares issued - however, only 371,636,364 actually will NEED to be issued - hopefully BRL will provide some guidance around what they plan to do with the big unknown: the RCPS. If the RCPS is trimmed back in anyway, my 18.9 cent price target for the next 6 months will need to be revalued upwards!

Hope those who have been watching were able to get in earlier in the week, or even better this time last month when the share price was about 30% cheaper... otherwise, as they say, "you snooze you lose"

Have a good weekend - next week the excitement continues.