Yes, I know the requirement/reason for the bridging loan.
The key (when only discussing this point) was the term Syndicate....It is not a bank or institution. They have set their own loan terms, and can carry out other activities simultaneously without the need to disclose or internal approvals to act as individuals.
The "Syndicate" could be you, me, the tealady, the local ukrainian taxi driver and MR Smith.
We all put in 1 million Euros. (5 peeps)
We all gain 5% back immediately paid as interest, and have set "safe" conditions to protect our loan, remaining in control of 2 million Euros of it.
We are aware of the Companies (AWD) need, and the potential positive impact it will have on the share price once we advance the money.
As well as provide the loan, we also buy shares. The return on the potential and anticipated SP increase due to the positive impact of being able to get the drill underway will far exceed any interest payments received....especially if paid back quickly.
We are also aware that our loan, will pave the way for the main loans approval....underpinning further & possibly substantial increases in SP.
Now if the Syndicate has 1 million euros each...im sure they have more.?? (just guessing and using 5 people count as an example to keep things simple)
Say we also buy 10 million shares each.....just before or shortly after loan advanced. (made numbers easy to work out)
The funny thing is, they could use the upfront interest paid to them to actually buy the (two bites shares) shares in the first place.
The 50 millions shares purchased (if not already held) would help support a great volume day or two.
The SP rises to 1.4/2, 3 or even 5 cents.....the return on this investment, which was brought about by the loan being advanced in the first place....then also supports the main loan from GRES being advanced....
Even at a simple 1.4 cents, their 10 million shares value is now doubled (being AWD has been at .01 recently....1.4 on good news...money.... isn't too extravagant)
They now have double value each. (Perhaps in a matter of days)
Interest earned for 1 year on the loan = 250,000 or 50,000 each...again, 1 year. (paid upfront don't forget)
They would not be interested in whether the drill is a success, and I also surmise, they will make money from an appreciating SP....and interest earned from a protected (albeit unsecured)loan will only be the bonus.
Two bites at the cherry as they say.
Now think what if they can splash for 20 million or 30 million shares each??
This is a great position to be in, if you were in the syndicate.....hence.....
I am betting on the Syndicate to win.
Watch for increased volumes next week.
AWD Price at posting:
0.8¢ Sentiment: Buy Disclosure: Held
