Having just taken the time to read the release today regarding the non-binding term sheet, I thought it worth a look back at comments from 6 - 7 weeks ago.No surprise as the review process was always going to end in this announcement as ;
1. Nobody else had a locked and loaded plan that could achieve what the FMS board wanted in the time frame they needed it.
2. BBIG had the plan it had been working on for the past years, just needed to do a few tweeks and hey presto here it is.
What I find amazing is that the FMS Directors have actually signed it. I thought we were supposed to get a copy of the PWC report and do all these fuzzy feel Q&A sessions. Nope - here is the PWC executive summary report and basically using it as justification on why they have signed this deal. Are they serious ? What level of due diligence has the FMS Board done and how hard did they squeeze BBIG ? Given 6 - 7 weeks from start to finish I would think the request may have been a "can you please give us a proposal, pretty please", followed by "ok thanks, where do we sign". It was always going to end in this decision, but they could have tried a bit harder to make it not so obvious !! When did FMS actually receive the PWC report ? Should it have been released to the ASX given we have all been waiting for it ?
Will be very interested in the fine print as the "summary" provided today is really just that, a summary. I have some obvious issues already pegged which I may detail a bit later as it will be long winded. I did note that PWC once again confirmed to all that "the BBI project does not currently have committed iron ore at the level required to initiate investment". So as per past comments, BBI need FMS as much as FMS need a transport solution.
I like the "free carry to FID" (the carrot) - and the devil will be in the detail (the stick) on what we give away for this honour. We can start with 60% of the deposit, the fact that FMS are required to vote for the FID.... BBIG will be the Manager of PIOP Mine, BBIG will be the Marketing Manager with margins over costs and finally BBIG will charge PIOP MineCo a capacity charge, a cost recovery and a commodity component for use of the rail line. NO DEAL. Cut the crap - give us an offer on a per ton basis and we can all vote now whether that will be acceptable or not. Way too many ways small shareholders can be screwed in a complex deal like this as the average mug punter will not be able to understand it. I think I will vote to leave the ore in the ground until FMS shareholders will continue to own at least 51% of PIOP and therefore control its destiny.
The above comments are my opinion and interpretation only from the limited detail provided to date. I am happy to be corrected by FMS Directors if they would like to share their insight with shareholders.
