There is nothing worse than a speck O & G company that does sweet FA exploration and the admin costs eat up its capital. GGP is not in that category. Its on the move and when there is money to be made there is going to be pressures from all directions.
Firsty page one of the presentation. THIS PRESENTATION MAY NOT BE RELEASED OR DISTRIBUTED OUTSIDE OF AUSTRALIA. Good luck with that as even China can`t close its borders anymore. What it tells me that management have real concerns that this presentation info could somehow encourage a takeover.
Take 2. While these notes have a decrease in interest rates and reduction of the conversion discount from 15% to 10% they also have a reduction in the timeframe of the weighted average from 10 days to 5. Hey the SP has taken off and I want my conversion now not when the average has increased and eaten up my profit! So an expectation of a SP increase in future.
The carrot for note holders. 5 years of income from SRH5 not matter how long they hold the notes.
Additional properties, note plural- has two paragraphs and page 13 tells us that $3 mill is what is needed for at least one of the deals. Expect an announcement soon after notes close.
Not to concerned about whether the company can pay back the noteholders in June 2014 as I expect they will have all converted by the end of this year as the share discount and the income from SRH5 carry more influence in my mind than a retarded 10% interest rate. As soon as oil flows and income grows, so does the share price. (if expenses are containes)
What will this eventual note conversion do. It will leave the majority of shares in a few Australian hands who may provide the defence of a takeover that a JV with another company at this time may not have provided.
Maybe yet another great move for the company by SG this year. The problem being there appears to be 2 classes of shareholders.
GGP Price at posting:
1.0¢ Sentiment: Hold Disclosure: Held
