Great post Jake as usual. I’m sure the $100m you’ve suggested was just as an example. I’ve seen and heard suggestions that minority shareholders seek a minimum of 15cps upfront and that would likely get the support required. Clearly we don’t have all the info of the proposal yet but based on what I’ve seen so far and the actions of FMS regarding the two attempts to changes the constitution and the delisting debacle both FMS and BBI need to realise that any proposal has no chance at all without a substantial upfront payment. A lower than 15cps upfront payment “may” get accepted if there are far more substantial gains than is currently apparent by going to production. What would that lower upfront payment figure be? Well my feeing is that it would need to be at least equal to or better than the last CR which was a discounted price around the 7-7.5c mark and before the delisting bombshell was dropped on minority shareholders which arguably destroyed market confidence in the company. So really BBI or the Chinese investors would need to find around $300m upfront. Given the ROI to BBI (& TIO) and Chinese investors this would appear to me to be peanuts in the overall project cost of $6b-$8b. Having said this, the returns to shareholders would have to be shown to be substantially better than the pathetic low royalty option suggested (which may yet prove to be even lower than assumed when a definition of the “revenue stream” is advised to shareholders.
The funny thing about the upfront payment to FMS is that Todd would stand to get 56% of it. So even 15cps upfront payment is really peanuts in the overall scheme of things.
The clock is ticking and I’m certain that minority shareholders know that the project will bring substantial profits to BBI and won’t give PIOP away without a substantial offer with certainty of returns to shareholders.
FMS Price at posting:
6.7¢ Sentiment: Buy Disclosure: Held
