Ann: Acquisition of Velvogen , page-31

mmm, from what watso can determine, the deal is a bit like this

velvogen have to borrow us$8.5m to get the show on the road, but then they lend cvi us$13.5 (by way of vendor finance). why don't cvi just call in the debt of us$10.5m, and give that to for the purchase of the equity stake, - and then repay the outstanding out of their share of the cash flow

that would be a win win - velvogen get the finance, cvi get a large stake, and if the venture is good, the cash flow will pay for the balance

now if the market had faith in this us$10.5 of receivables, then cvi would be a cheap buy, as it would be well funded - guess, that their are doubts about the recovery of the debt