And let me again emphasize the point that I made earlier this year.
Eventhough cokal owed $13m to platinum (or platinum's liquidator), it was actually cokal that had the much stronger bargaining power..
The job of any liquidator is to maximise return on non-performing assets for the creditors. Calling the debt would return zero to them since cokal's assets are a bunch of stacked licenses which in no way those can be monitised without cokal going to production and start selling the coal.
The liquidator had no other way - and I emphisize, again and again - NO OTHER WAY to play tough and the only way was to convert that into a royalty payment, which will give them more than 3x the amount of original $13m debt..
In short, from the liquidator's perspective:
Calling the debt = 0 return
Convert to royalty = POTENTIALLY $40m return
Doesnt need a genius to understand martino had the upper hand all along. Maybe thats why he willingly lent cokal his money whilst debt negotiation was being formalised.
Thats a businessman mindset.
Dyor.
CKA Price at posting:
3.3¢ Sentiment: Buy Disclosure: Held
