(Reply functionality acting up again. Sigh.)@Talks,BMM would...

(Reply functionality acting up again. Sigh.)

@Talks,

BMM would only convert their CN if they wanted more equity in POS, capped at a fixed 9c entry price.

At face value, given the current SP, it's hard to see why they would want to do so (on SP reasoning alone) and you wouldn't get any argument from me with that thinking. If the SP moves materially higher during this month, and they think it will maintain those levels, then it could very well sharpen their focus in a big way.

Other non-SP drivers to consider is that if they are looking to throw another ~$25m at POS via increased equity stake, then they already have pre-approval (exemption) to greatly exceed the normal 20% ownership cap under the terms of the current CN. They can do it in one fell swoop, but this exception will expire when the CN expires.

Why does this matter? Well, since they already own slightly >20% they'll be heavily curtailed on just how many more shares they can add to their position in any given 6-month period (the 3% creep rule). (Corps Law places heavy restrictions on shareholdings over 20% without making a take-over bid. (There are some limited exceptions relating to CNs, and the creep rule, among others.) This will rule out purchasing anywhere near that amount of money's worth in any given 6-month period. More like a cap of 80m shares per 6 months at whatever price they can pick them up for bidding on-market, which could move the market. At today's 6c-ish it amounts to an additional investment limit of ~$5m per 6-month period. Death of a thousand cuts for a large holder if they still want to increase their exposure.

Bottom line: it ultimately goes to the question of why BMM purchased the CN from Jefferies in the first place. Remember, these guys purchased the CN immediately prior to their failed low-ball T/O big in Q3 2018. They want the whole company at that time. They failed and they had to settle. Today, even at the same 6c bid price it would cost them a lot more than 6c back then (many more SOI). They've got nil chance at that price anyway, imo, because AF's (blocking stake) holding VWAP is more than that.

I appreciate this might be doing your head in - especially *if* you're thinking about it from the perspective of a traditional lender/borrower relationship. If that's what's happening, try looking at it from the angle of a private equity player who is really interested in getting a decent foothold in the Ni space, with a view to riding the wave. That's their game. Mmmmashley (for you Georgie Boy) has made no secrets about it. There are various PR fluff pieces on her in the interwebz. I've seen one in which she refers to HC specifically and also previous references to her (by others on HC) as being the Black Widow, which she chuckles at.

Hope that helps.


[edit] Busy night tonight. Started this reply then picked it up a couple of hours later. Just noticed some similar responses.