QIN (ASX) Ann: More than $11 million secured in accelerated sales program

Originally posted by JID ↑

Hi Guys,

Good news that QIN were able to bring A$11m in the door but it may be too little too late as HT, IMO rightly points out.

To see an analogous situation play out pop across to PDN who have just appointed administrators today.

The situation was very similar whereby PDN owed EDF (and others) a large sum of money and were deemed to have breached a security threshold and had to post more collateral which they were unable to do.

This is very similar to both the possible exercise of the Put Option and the debt load that QIN currently has. It is difficult to gauge what third parties will do in these situations and in PDN's case EDF said "stuff this, we'll liquidate you and take our chances".

That could well be the logic of several third parties here.

The fact that FW hasn't charged in yet on a white steed bodes ill for QIN's chances of survival. At the very best, I unfortunately think a highly, highly dilutive restructure is all that shareholders can hope for here (and a possible class action!).

I fully anticipate a further extension to the suspension and, hopefully not, but it wouldn't surprise me, an announcement one day that administrators had been called in.

Good luck.

Cheers
John

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John, your absolutely wrong there Im afraid to say. Your normally spot on! PDN has debt to EDF and Bondholders and EDF are a secured creditor over one asset Michlen.
QIN put option is unsecured so point in fact the put option if struck will force QIN into VA and put option holder will get Nada....Zip...F'all. How is that similar. In fact there are 3 options for QIN, unlike PDN with almost zero options.
1) PUT is exercised and all over. SK or whoever they are bite off there own nose to spite their face. Get jack sheet
2) Recap goes ahead but subject to PUT not being excercised. Refer to point 1
3) no recap and still PUT will not get struck coz QIN has no cash to pay the PUT but has cash to survive till end Aug maybe end Sept and pay their bond interest of 14 mil falling due 1 Aug.

Bondholders have 14 mil reasons even without recap to allow QIN to continue trading and hope for some investment. Why call it quits like EDF have done when they can collect interest payment in Aug.

The PUT holder has no choice at this stage but to hang in there otherwise as an unsecured creditor they wont collect anything but to battle the administrator for months/years.

The only other senario here is that the PUT holder has some other agenda in terms of forcing VA and in bed with some entity picking up the asset on the cheap.

PS. Not a holder of PDN but was in past hence the knowledge

IMO