the project requires $194m for construction to commence - $130m equity and a loan of $64m
From GangFeng point of view , they are risking $194m for the project to get off the ground in 2-3 years time.
the GangFeng share price fell on the announcement- not sure if there were other contributing factors, so if their investors didn't like it , it must be a good deal for FFX
THE STRUCTURE
FFX owns 100% of Goulamina holdings PL which in turn, initially holds 100% of Mali Lithium BV
GangFeng will subscribe for 50% of the shares in Mali Lithium BV(call it a placement) for $130m (it would have been better at $194m and I'm sure MQ tried)
GangFeng will lend 64m to Mali Lithium BV
THE BALANCE SHEET day 1 Mali Lithium BV Initial project value $260M cash in the bank $130M EV = $130m
THE BALANCE SHEET On completion of construction say year 2 Project value $260M cash in the bank NIL Mining Plant $194M Total Assets $454m less loan $64m
Net Assets $390m
AND then we have the Demerger which will require a prospectus My guess to raise between $25-50-100m at say 50c or $1.00
