Old Direction Fanciful Finance, page-10

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justinmetals

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06/07/17

15:04

Post #: 25706550
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Originally posted by Denny Crane ↑

Rosevelt you say "They've delivered a solution to the Macquarie Bank problem by securing the agreement on 100mil", but they have actually delivered nothing! These ND guys don't seem to have much in the way of shares so may be just looking for jobs?

If you and your mates believe ND are the best answer then good luck to you.

Besides, the amount needed to take out Macquarie AND provide the gas field enhancement funding is more like $120m - $130m. If the Mac debt can't be refinanced as debt then the equity raise to take them out will be a minimum of $120m. We don't know the terms of the Mac debt so there may be penalties for early payout etc? At leats as an Australian financial institution with a banking licence etc, they are accountable to APRA, ASIC and their customers who will look critically at how they do business. Mac has reportedly had internal compliance issues in the past and I bet is sensitive to criticism and potential brand damage. They will do everything by the book. Will an overseas funder do likewise?

If the market falls a little further after the Scheme vote fails (assuming it does), and the new ND capital provider (if they exist) wants equity rather than debt they will naturally want shares at a discount to market. Say that's 10c, with 430m shares on issue now, plus 1.2B shares ($120m x 10c) to the new funder gives that funder 75% of the company, assuming all gets passed by shareholders. Are then CTP or rather the CTP shareholders just jumping out of the frying pan into the fire? With 75% it's relatively easy for the funder to take it over, for 10c a share!

Beware of strangers bearing gifts! ND is trying to give the impression they will be in control of the funder. I've never seen that happen! Any funding group with that sort of money taking such a large percentage of a company will be controlling it, for their benefit, not the other shareholders. By keeping the Mac debt as long as possible we get closer to the holy grail without too much dilution. By participating in whatever CTP rights issues come our way we maintain our equity percentage.

The principle in successfully making shareholder wealth in resource companies is only raise what you have to, build the value so the next raising is at a higher price. That way you minimise dilution, the number of shares on issue and ultimately have a better chance to make a gain.

Like I said before, ND is trying to impress with it's so called $100m funding source, but at the end of the day it may not be of use or any benefit to CTP, let alone us, the shareholders.

Denny Crane!

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Yep and unfortunately for all the suckers that held on you'll be raising big capital (because you have to) at massive dilution sub 10c - sucked in bad. Foolish!

CTP Price at posting: 11.8¢ Sentiment: Sell Disclosure: Not Held
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Old Direction Fanciful Finance, page-10

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