rewlin, please note, mr forrest is not supreme....there are...

rewlin,
please note, mr forrest is not supreme....there are definitely ppl who dont like him....., so lets be objective in business....anyway, please read the citigroup response to FMG matters today.......after reading same pls follow up on reports prepared by other leading brokers,and then compare..... thats the way i do it.
have a relaxing weekend


Flash: Fortescue Metals Group Ltd (FMG.AX): Topping up the Coffers
A$450m Raised - Fortescue has raised A$450m from preference shares and pre-payment commitments. Funds raised will allow continuation of early stage works and ordering of long-lead time items for expansion. These funding sources were expected as bond coverage covenants that would allow additional debt not expected to be met until mid 2009, ramp-up dependant.
A$140m Preference Shares - A$140m will be raised through a preference share issue, subject to shareholder approval. The redeemable preference shares will have a coupon of 9% and term of 8.5years. Further preference share issues are also being advanced to provide additional funds.
US$275m in pre-sales - Five Chinese steel mills have committed to providing US$275m (A$310m) in advance product payments that will be amortised over 5 years from first expanded production. Stage 1 of the project was partially funded by US$100m in pre-payments.
Use of funds - In addition to bolstering the short-term liquidity the funds raised will allow early stage works and ordering of long lead time items for the optimization to 55mtpa and expansion to 100+mtpa.
Additional Debt - We do not expect the company to meet the interest coverage covenant in the bonds that would allow more traditional debt sources to be accessed until mid 2009. Additional funds could also be raised in the interim by transferring completed infrastructure into additional operating leases, although this raises operating costs due to the additional finance charge.
To view this full article click on the link below:
https://www.citigroupgeo.com/pdf/SAU05124.pdf