"If you owe the bank $100 it's your problem. If you owe the banks $100 million it's their problem."
Glennon are in a difficult position right now with $2m debt and 216 million shares in MEL. They could default MEL on their debt position to secure their $2m however they will take a bath on their equity. (currently worth $1m on a cost base of $3m)They could stand back and provide no further support to MEL however this would just put MEL, and Glennon, in the same situation.
Their other option is to drip feed MEL capital sufficient to continue operating while both MEL and Glennnon try and source fresh debt. Glennon took up $500k in the recent placement and likley participated in the most recent $250k placement also.
Glennon have to decide if they assist/arrange/participate in funding MEL to drill and connect Odin-3 does it give them a better chance of protecting their capital and equity position. Glennon have way more to lose than the directors of MEL. I'm a little suprised that Michael Glennon is not on the board already.
Does anyone have any other ideas on what Glennon could do? I can't find any connection between Glennon/Vintage although merging MEL/VEN could be an option? Otherwise could Glennon make a bid for MEL and take it private? I know @OldGeo and a few others were around when Glennon first came on board, do you have any sense of what Glennon would be thinking about now?
MEL Price at posting:
0.4¢ Sentiment: Hold Disclosure: Held
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