Ann: Request for Extension of Voluntary Suspension, page-5

"But this commercial stuff. I am genuinely astonished it appears to be so difficult to get a 'simple' deal done to deal with what the adults in the room at STA must be very well aware of what their needs are. Yet, somehow, resetting payment terms and other such manipulations, in a timely way, is proving so troublesome; why?"...

Because, "if you owe the bank $10ok your in trouble, if you owe them $1M then the bank's in trouble" as the old saying goes (before the compounding effects of inflation).

Creditors want as much protection (shareholder equity buffer) as possible, and will always seek their pound of flesh in return for altering contractual debt terms when the opportunity arises. The whole deal, including restricted cash and host of other debt covenants, are in place to protect and enrich the creditors...

Debtors are usually in a very weak position by the stage debt renegotiations are required, which is why companies always try to do pre-emptive CR's to avoid breaching debt covenants. Lenders are rapacious bastards, happy to lend you an umbrella until it starts raining, then demand the umbrella back under a 'if it gets wet fine print clause'. The only people more outrageous are Administrators who load up the failing company with outrageous costs for long enough to make sure when the business is set free with lower debt levels, maximum shareholder equity has been transferred to administrators and creditors before giving it a green light. Creditors will vote to support the administrators so long as the administrators leave enough flesh on the carcass to make creditors whole (including interest, fees, penalties etc).

What can debtors do? They have breached terms of the debt contract and so the carrion birds swoop in to feed. Debtors can only push back by threatening to hand the keys over to creditors before the project is in good enough shape to stay afloat and make good creditors loans (Alan Bond style). If creditors fear they might actually lose everything (eg Callium Lakes potash brine), suddenly they are taking hair-cuts and buying time for the business to try and survive. Play fair or we leave, and you can try and run it while staff bail for safer jobs, trade stops working on monthly payment terms etc.

Just because creditor want to squeeze equity holders down to nothing while also making good on long term loans, doesn't mean debtors have to roll over and accept whatever pineapple creditors are asking for... haggle. Similar with brokers going to be asked to arrange this next CR, they want to know where the business stands before tipping in and the more time to refine a realistic forward plan and see how the trend of production is going the better. Like I said earlier... if creditors are nervous, shareholders should be pooing their pants.

GLTAH