Dimulos, that is exactly what could happen. If Lynas cash flow allows repayment of JARE debt, or only a portion, that should allow Lynas to reborrow those funds, and possibly further advances to purchase the MK C Notes.
My analysis of the situation suggests this is a very probable outcome. Maybe not all the notes, but whatever can be safely funded over the next 4 years.
If RE prices recover and trend is confirmed I see no way that shareholders would approve MK going past the 19.99% level. If Lynas can purchase notes before MK convert, then MK may end up with significantly less than 19.99%, in which case hopefully all shareholders would be happy. MK want their money back, not ownership of Lynas and I am sure would be willing to assist this repayment process. They have extracted their pound of flesh with the warrants to cover lost interest, so all should be happy with a full payout.
As an aside, this could well act as a trigger in support of WW1 suggestion of a 63c market price for Lynas shares, I assume pre any consolidation.
Mt. Kellett deal news, page-6
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