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just sitting outside , thinking about your post, we are heavy...

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vetiver3

2,257 Posts.

30/03/15

18:32

Post #: 15006666
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Originally posted by macro_watcher ↑

My best guess is the driving reason behind the halt and suspension is that the period attached to the grant of the conditional waiver likely is expiring at the end of March. If true, this would mean that the lenders now have the immediate right to call the entire balance of the loan and appoint receivers to the Company at any time should they choose / without any further notice or cure periods. They haven't announced this as they likely believe they can rely on their belief this is unlikely to occur while "negotiations" are formally ongoing. The suspension is to protect the board from being caught off-guard if it does occur.

I call the bluff on the Company's repeated announcements that it is close to a capital raising solution. It doesn't take an insider to know that the removal of AB would enhance the prospects of a capital raising exponentially at this point. The mere fact that AB is still at the helm suggests they're not serious about just getting it done and the more likely outcome is either AB can find an ally to underwrite a big component of the raising (which must be getting harder considering the stink) or they're content to bring the whole house down trying. I suspect what they're fronting to the lenders is a "highly confident" letter from Gresham which isn't worth the paper its written on + a commitment from the HK billionaire to follow his money. If that is true, I can understand the lender's reluctance.

Unfortunately I believe the inevitable outcome here is a pending announcement that "negotiations" with lenders have broken down "unexpectedly" and receivers have been appointed. They'll frame it to shareholders as they were caught completely off-guard and felt they were close to reaching a resolution with lenders (a subjective assessment). Of course the statement will be BS but defendable from a legal perspective so far as they are yet to receive a definitive message from lenders that negotiations has ceased (which won't occur until the simultaneous notice of appointment of receivers).

The last hope for me at this stage is that there is little scope for recovery of prior investment under the satellite EPC contract with Lockheed Martin in the case of a default. This would at least leave the lenders with a big financial incentive to not tip the Company into receivership and instead work to find some form of solution. My biggest fear is that AB are trying to leverage this to keep the dream alive by only offering solutions that don't include his resignation.

It would be a sad day if this does go down as I believe the situation they're in should have been addressable with a combination of a new CEO, the resignation of the AB-aligned directors and a highly dilutive raising. It's the Board's job to see that this happens and we can only hope they're not simply listening to AB's assurances he has it under control...

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just sitting outside , thinking about your post,
we are heavy with problems
then I spied violets, growing in a concrete path.

NWT Price at posting: 11.5¢ Sentiment: None Disclosure: Held
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