I've been following CAI for a while, and have been surprised at the speed of the capitulation. Dave was juggling on a unicycle, but appeared to be across pulling the next rabbit out of the hat for a while. However the company was beholden to Macquarie as soon as the orebody underperformed, despite the gold price sentiment..
A couple of observations, without professing to any inside knowledge. - Boards appoint administrators. If you are on the hook as a director you are very conscious of insolvency and being able to pay the next bill. And CAI had just raised, and had effectively negotiated a bit of a debt holiday in the quarter. Yes there is effectively a game of chicken prior in relation to various parties getting paid, and the risk to equiy positions of those parties, but directors make the call. I doubt it would have been unanimous at board level, but that is my personal opinion. - Once administrators are appointed, MaQ would have quickly moved to protects their interests by appointing Receivers and Managers. I doubt they consciously initiated or orchestrated anything,. The appointment of R&M would have been reflexive, as they are the biggest creditor, and administrators serve all parties, while R&M serve their appointer. I personally believe that with $60M debt plus a hedgebook out of the money to say $70M, this wasn't a preferred option for MaQ, not at this point. IMO the asset isn't worth near that in a firesale. -MAH are just caught in the crossfire. They have previously taken equity, and would have had everything crossed that they and CAI could trade out of this position over time. It's not pretty for them being effectively unsecured behind MaQ, and while they are now guaranteed payment post appointment, I doubt it will be for long. It's a pretty serious hit for them IMO. -We may not ever know the machinations over the past few months, refer WMX, that was messier. Expect a flurry of initial communications/circulars, some talking up of the recapitalisation/sale process, and then probably not a lot. -Not sure what the next iteration of Warrawoona looks like, it needs minimal debt and a big gold price, and someone with the hide of a rhinocerous to promote.
Sympathies to all holders, it sucks. I was actually watching it thinking it could be turning around, but the quality of orebodies in the region is an issue.
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