Originally posted by toly
Originally posted by avagadro
Lynas is on track to meeting its debt repayments last I looked. Their cash flow position looks strong and outlook is positive.
Youneed to look a little closer. Debt is USD 165M . It is possibleif NdPr prices rise to 400RMB /KG for NdPr. At today’s REO pricesyou just cannot make numbers work. 400 RMB is an averageprice over next two years not the price 2 years from now.
Originally posted by inge281242
To Jim B
I always understood that in the event of the inability of a company to repay a contracted financial obligation then one solution would be to sell an asset or all assets of the company and the debt, which in this case would be $150 million plus interest, would then be taken out of the proceeds of the sale and repaid to lender (in this case JARE). I don't think that 150 million plus interest would place the WHOLE of the Lynas business into JARE'S hands. There are also several easier ways of raising this amount of cash, i.e. as you suggested, a new stock issue.
Sellan asset. Sounds good. What asset? Lynas is a complete company. What asset could easily be broken out? Mt Weld? Lamps? If you see something easily separated could you let us know what it is. Please!
Originally posted by Jim B
Someone please ask this at the Annual Meeting
Lynas owes $150 million dollars to JARE and it is due by the end of June 2020. Interest will add approximately $12 million more dollars. There are nineteen months left to pay down $162 million which means
Lynas must make $8.5+ million per month in loan repayments, or $25,6 million per quarter to service the JARE loan and pay off by July 1, 2020. Lynas does not make that kind of profit now to do so!
It has been said by people in the past that the JARE would then extend the loan. Maybe. BUT, the JARE most likely will not.
The JARE holds the lien on ALL of Lynas except for Malawi.
Why would the JARE extend the loan beyond July 1, 2020 when on July , if the loan has not been paid in full,
Lynas would be in default and JAPAN would own Lynas. Your stock would be worth less, actually it would be worthless - because you don’t own
Lynas-Japan shares.
So someone, please ask Amanda whether there’s any consideration being made to paying off the debt to keep Lynas whole. The annual reports I've read say no. Thank you.
JARE is not a manufacturing company or a bank. It is anorgainization of a bunch of Japanese companies and (Japan’s government?) Set up to assure a non-Chinese Source of REO. I have lost count but theyhave Re-negotiated terms at least 3 times, the last one October 2016,and this was major. https://www.lynascorp.com/Shared%20Documents/Investors%20and%20media/Announcements%20and%20media/2016/161026%20Amendments%20to%20Debt%20Facilities%201609212.pdf. The idea that JARE will not do it again just does not make sense. Even if NDPR prices are still in low 300 RMB range Lynas will certainly be able to handle a USD 100M to 140M loan with traditional terms easily! I know they owe USD 165M now, but even if REO prices fall a little more they will pay off some of this in the next 20 months. Summer of 2016 I thought Lynas Bankruptcy was certain. I was very wrong. When it did not happen I went back and studied all deals and the make up of JARE. If you do this you can answer your question “Why would the JARE extend the loan beyond July 1, 2020 when on July , if the loan has not been paid in full,” I am not going to post all the links but if you want to understand all this start with, "a special purpose company (SPC) established by Sojitz Corporation (Sojitz) and the Japan, Oil, Gas and Metals National Corporation (JOGMEC);" this is JARE before they were JARE.
Originally posted by toly
Hi Jim, first of all Lynas is sitting on ~65m in cash. All payments are current and the rare earths keep flying out the door. In other words Lynas has zero issues with extinguishing debt and appears to be holding back a little cash for a rainy day. One would think it should be quite easy for Lynas to float a loan if needed...
Secondly, I can assure you that the Lynas staff is completely competent and are on top of all of these issues. I know for fact that today they are breathing a sigh of relief when they look back at the early days of JARE. Things (with JARE) have evolved into a great relationship and the staff are beginning to have fun these days (baring Fuzzy of course)... Sometimes you just have to trust the driver... JMHO...
(20min delay)