CMR 0.00% 15.0¢ compass resources limited

babbling monkey calls brokers bluff and buys, page-10

  1. 824 Posts.
    This has been an amazing decline! True it has got to turn soon - I hope.

    The one thing that really concerns me is the standby finance facility that we have been dipping into to finance the oxides. It is a convertible facility and I wonder whether they stuck a price to convert the loans to equity or placed a limit on the number of shares the bond holder can take. If it doesnt have limitations, the bond holder is sitting pretty to grab a very large chunk of CMR for 100 million. Not a bad outcome for someone that struck a standby finance deal at a share price north of $5.

    $100 mill converted at $1.4 a share gives them 71.5 million shares or 36% of resulting fully diluted shares. If this were to happen it would be a travisty! It also shows that someone might have a considerable interest in keeping the price going lower.
 
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