Ann: Sale of New Hope Shares & Entry into Long Equity Derivative, page-9

I think I know how it works.

SOL have lent 38.1 mil shares to a financier (A).

This financier(A) short sells the shares to another financier (B)
for $1.68c each. It's an off market trade. This is referred to as the Delta Placement.
Financier(B)'s part of the transaction is all cream. The shares he purchased for $1.68 in the
short sale can be sold instantly by him for sizeable capital gains. Hence the selling pressure in the market
last week which drove the price down to almost $1.68

Financier (B) in consideration for receiving the shares at such a discount to market (8.7%) has
arranged for $200 mil C/N 's to be subscribed for in NHC. They have a strike price of $2.10 per ordinary share. He does this by
using his own funds (partly from selling the shares) or others' funds over which he has influence.

Financier (A) has to deliver the borrowed shares back to SOL in 5 years time and
will have to wisely invest the $1.68 he got in the short sale to be able to buy them back.
However if he purchases some NHC C/N's these have the built in option to buy NHC shares for $2.10 each. There's not much
risk for financier (A) if he takes this course. This assumes the shares in NHC increase in value to more than $2.10 over the next 5 years.

In practice Financiers (A) and (B) would be partners or even the same entity.

Where did all this newly created money come from ? I guess its from NHC being willing to issue shares in five years time for $2.10 each
to people putting up the money today. The shares might well be worth $5 in five years time.

Anyone else got some thoughts on this?