Silsol,
Thanks for the insight into the structure. I believe in this instance it is necessary to uncover the background of the buyer - what is their past performance like in delivering their objectives? In this case their capacity to deliver $50m?
In any case, without a JV or a port to transport any such ore we will never get a cent of the $50m.
So if sale goes through and we get $4m, the JV fails we have sold our asset for $4m with no additional funds to collect until the port is built. The risk is that no port is built in any time soon, ADY will again have no cash in a years time and be forced to sell the other half of the ore tenemants. That will mean the lucky BVI company who buys the assets for a fire sale can then afford to build the port because they got the ore at such a amazing discount the still have money left over to buy the British Virgin Islands as well.
Most of all, i think we need not be distracted by this sale so much, the MAIN focus is on the JV and port. In my opinion, this needs to be resolved first not the sale of its assets because its company burn rate is something that resembles forest fire and will effectively be used for that.
Like i said, i am all for the sale if it adds to shareholder value, but if the sale goes ahead and JV fails to unfold...shareholder value will then be zip.
Add to My Watchlist
What is My Watchlist?
