Lynas-Japan...potentially a new stock issue, page-15

I am one of the more negative here but I do not see any problem with refinancing debt.   My guess is that JARE will do it and even include enough to erase the MT K Debt.   If JARE wanted direct ownership they would have done it two years ago they were senior debt and the only game in town.  Lynas was 2 months away from bankruptcy.  Remember JARE is just an organization of Japanese companies, running anything is always done poorly by committee. If JARE bought Lynas it would only be to transfer it  to someone else.  After what Mitsubishi did when they did REO in Malaysia the problems with any Japanese company owning Lynas would make what Lynas went through in the last few months look simple.     The interest rate will be at market rates and right now that is hard to predict with WW economy.  As two people mentioned in their posts how much principle Lynas can pay is dependent on the price of REO that they sell.   REO prices are near the breakeven point for Lynas.  IF NdPr goes above 400 RMB / KG with VAT, they may be able to pay debt off before it comes due.     I am still negative on REO prices but the counter argument to that is last night Nd jumped 2 RMB /KG.  That is, less than 1%.   It is the biggest change in either direction since early August,  and positive.    This may be a change in REO market direction.   (I am not ready to change my opinion but I am watching)

As far as issuing shares, there are too many shares now!   I see no reason to dilute further.   They would need at least a 1/5 split to put price over $10.00 before any SPO could be contemplated.      A SPO might be called for if they have expansion plans that need lots of cash. The current debt can be managed with loans. 

I hope people that have been predicting Dividends in the next few years read all of the posts here and realize that dividends are years out,   unless REO goes through the roof.   It will!  I think it is more than a couple of years out.    

 

100RMB = 14 USD   x 600 tons of NDPR  8.4M USD/ Mo X  20 months =  USD 168M Current JARE and MT K debt with no interest USD 165.2M