40% super profits tax

In a broad long term view (5 years plus) ESI's future profitability would not be materially effected by this tax as they are a technology company and will collect royalties on a per tone basis all around the globe.

So any new deals domiciled in other countries will not be impacted.

In the short term, however, I see three issues

1. The 10% free carry in the australian based tincom spv would be impacted. (not a big worry)

2. If there were any new imminent deals to be done in Australia, I would think that the potential partners would take a breather and wait for certainty before comitting money. I guess what we don't know about won't hurt us!

3. Tincom might delay proceedings until this is resolved. If so, we could be looking at July before getting money from them?

Although cash has been raised legitimatley as an issue many times. IMO Tincom will NOT delay deposting cash into the SPV if it means the demise of ECT. They need our technology(BCE) and they know that once they deposit money into the SPV the esi sp will be rerated thereby putting the ESI options "in the money". Suffcient conversions will generate enough cash for ECT to pay the bills and move on to other deals.


Just my take.
Tbedon