Ann: Empire to refinance ERM debt-EGO.AX, page-2

at first I thought that was a pretty good deal.
then I remembered we only have 102m shares on issue.

so that means EGO is proposing to issue 14.5% of our capital to Viburnum for a average price of 43c p/s.

so as the price for Viburnum lending us $15m for 2 yrs fully secured over all our assets of any worth, EGO issues them 14.5% of our capital for 43c. I guess its only an Option. But geez, one would hope EGO SP would be well over 43c in 2yrs?

the Options appear to be in lieu of any fees charged by Viburnum??? Usually one would see hefty fees upfront.

Also the 8% p/a paid Qtrly in arrears seems logical in this market.

So we will have ERM 19.6%, and Viburnum 14.5% after 2 yrs?

seems to me ERM will be happy to get out.
we do not pay the Top-Up
Viburnum could be source of future funding?? (but at what price?)

Now that ERM is getting its loan repaid ---  just watch ERM get out of its shares !

It will not dump them on open market, because that would kill the SP.

The value of that s/h will be that the 19.6% is still effective control of EGO (because Viburnum has no voting rights (YET ???), and the 19.6% parcel is the ideal launching pad for any takeover.

I think the fact the ERM loan will be refinanced is a de-risking event. The Options would need to be factored into any t/o play.

Also, the Options would have trigger events, like Change of Control clauses. Material Adverse Change clauses.
Does Option have any early Exercise provisions?? (like a T/O or change control event??) I bet they do.

Probably deal OK - probably as best we can get in this market? 8% seems reasonable, but 14.5% @ 43c seems very stiff.

just all imho
cheers