GXY paid $20 million in equity in A40 for the box seat in a relationship with A40. I don’t think they actually cared about the potential future value of the equity stake. It looks like they were positioning themselves among the large A40 shareholders as a potential partner. Wolf in sheep’s clothing....
GXY want the tennants and the plant.
They forked out another $40 million for the debt. Own the debt, control the assets.
They’ve effectively taken control of a $120 million company for $60 million. Without a messy takeover bid or overpaying. They’ve now almost doubled their output capacity.
The $40 million is secured against plant and equipment. So they will get that back one way or another. The other $20 million will be the “cost of doing business”.
The $40 million they funded it with was using their own debt facility, which I guarantee isn’t at 15% p.a
If they really wanted to make work for A40, why wouldn’t have they given them a lower interest rate?
Own goal?, page-3
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