gbg will survive for now

HI Guys,

After reading GBG past reports again and researching other companies in this kind of scenarios..my gut call is GBG will survive.

Read the section on report Ansteel has provided a letter (non binding) to board about additional funding around $300m that they will provide to meet the debt obligation or shortfall.

Anstell will renegotiate the debt facility by 30April2014(may be bit earlier)

Fortescue metals went through the same scenario back in September 2012 (may be worse as they had larger debt), share price went south and company had a trading halt. Ultimately Debt got renegotiated, covenants waived with 12 month flexibly.

Ansteel has bailed KML 2 or 3 times differently. Have a good look at the last half yearly DEC 2012 (out in Feb13), GBG and Karara had the very similar sort of balance sheet dues or current liabilities and GBG share price was trading much higher may be around mid 30cents.

Even this time’s half year is no different but aleast if they can sort out funding (they will I believe), do bit of ramp up and at least they can start covering off debt payments. Don’t expect any profits for them. So far they have just messed up and didn’t take the advantage of high iron ore pricing.

DYOR: It’s just my opinion, I am holding a small parcel so won’t sell now. People who will sell now in distress will feel the most grief when it will successfully renegotiate the debt facility. Large funds are selling GBG forcibly as per their strict policies or investment mandates with their client. And they will be ready to buy it back again..as they are the real punters.