It is not surprising that they'd be looking to broaden the lender pool beyond the 4 lead banks given the amount of debt funding required. As XCS mentions, it is also normal that any commitment would be subject to the overall funding package being finalised, including both debt and equity.
However, what you'd want to see at the point where they approach additional lenders is confirmation that the structuring banks have completed their DD and have at least reconfirmed their indicative/soft commitments (subject to any final confirmatory DD points, customary conditions precedent, final credit committee approval, and sufficient commitments from other lenders and equity providers to complete the financing package). None of this is mentioned in the update, so it begs the question what exactly is the "significant progress achieved" referenced in the release.
The most benign possible explanation is that everything is largely on track, but just taking a bit longer given the complexity of the project, so Vulcan have decided not to wait until finalisation of DD and negotiations with the structuring banks before going out to additional lenders.
The more concerning possible explanation would be that it's looking less certain that one or more of the structuring banks will come through and/or are scaling back their indicative commitments and Vulcan are panicking and trying to go far and wide in the bank market to try and salvage the situation.
It's completely possible that I'm reading too much into this, but I'm just concerned that the company is putting out an update regarding a "key step achieved" without actually explaining what that specific milestone is. Going out and approaching more lenders is not an achievement.
I have therefore sold almost all of my Vulcan shares (which was the largest single stock position in my portfolio) at the open. I don't take these decisions lightly - I've been a shareholder since buying at 80 cents in 2020 (took some profits at $14 when things got a bit crazy in 2021 and topped back up around $2 earlier this year). I am still supportive of the project and management, and would jump back in if there is additional clarity on the above.
VUL Price at posting:
$4.46 Sentiment: Hold Disclosure: Held
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