Couple of problems here (I think). I think you will find that we are sitting at the ownership limit, so any increase in SH would require a TO offer (above 2% / year). We could offer to buy the debt after factoring, but without SH control the debtor will eventually be removed from the picture by another debtor, CR or business collapse. You need the inventory and management control to fix up the cost structure and make the think work. The downturn in Li is very short term IMO, and within 12 months the opportunity is likely to be gone, but without a white-knight a40 won't survive 12 months. So if we just take the debt we will take on all the problems without the ability to fix them, and eventually the sector upturn will fix them and you will just get the debt repaid, but taking control outright, or at least a super majority stake will allow GXY to cut the costs down to a profiatble level by eliminating duplication at the corporate level, applying its mine optimisation skills to A40 and feeding the BH output through its existing channel + potentially utilising the a40 JV downstream hydroxide plant if that actually ever comes to fruition.
I think now is not the time to be half pregnant but to take the risk and make a full baby.
GXY Price at posting:
$1.16 Sentiment: Buy Disclosure: Held
