Nope, but had cause to look up KLL the other day and came across their Cr history leading up to Beyondie going into administration. Not dissimilar to the path STA are tracking, repeat with management soaping up the market with much BS as the ship sank.
Where as Luke went the $50M "Growth" CR earlier than KLL, KLL also hit up the market for $50M Growth and working capital during the ramp up period post first production.
In reality the CR was really about working capital to buy time to get the operation cashflow positive, and more 'risk equity' protection for debt holders was the price required to have debt holders push out repayment terms.
Almost a year later and KLL are still burning cash with another CR cum debt restructure to buy more time. Another $22M and
6 months later KLL shares were suspended from quotation, another 6 months they went under and shareholders were wiped out. Different project of course, but the mechanics of failing to reach design production, with higher than design costs are the same... buy time in a do or die situation.
LG managed to sell the brokers problems were just a hiccup, like he sold investors the problems were pretty much sorted, like he sold retirees on the Gold Coast things had turned the corner two days before that July $38M CR. $38M only bought a little time because he was blowing $15M on the worlds worst contract he signed up for with Tanzania. Now STA need more time, the debt holders want more risk equity buffer protection, but I'm not sure the brokers are that keen on tipping their clients into another KLL situation just to buy debt holders more protection.
Problem is that Debt holders won;t give up something (debt restructure) for nothing. With enough CR equity cash injected debt holders will do their bit to help buy time by delaying repayments. Otherwise, debt holders will call default and try to get their money back by wiping out shareholders now or demand fees and penalties that compound debt repayments down the track if Coburn gets sorted (their pound of flesh). STA don't want to destroy shareholders now with crippling debt penalties, administration or too heavily discounted CR (even if they could get it away at very steep discount).
Looks like a standoff, nobody confident of where Coburn will settle down regards free cashflow and so nobody prepared to make any extreme calls quite yet. Christmas is basically closed for market CRs and debt dealmaking, so push it all back to mid Jan and see if Coburn is trending strongly enough in the right direction or not? The required equity CR and heavily that is discounted will be determined by how much Coburn improves over this period, and so how much confidence it can give brokers to step in for a 'bargain'...
As I've been saying since the 18c CR in July, the biggest risk isn;t that Coburn won;t eventually reach sustainable production, it's reaching it too late to avoid shareholders being wiped out. That's why I was advocating not to buy the 18c Cr or average down since until evidence of sufficient production improvement and risk reduction (unlike at least one other very confident poster). Fingers crossed for all that after a year they finally demonstrate enough production improvement they can keep the ship afloat for shareholders.
(20min delay)