This was just sent to me (see below from Patersons)A lot of what...

This was just sent to me (see below from Patersons)

A lot of what Patersons say is really down to poor investor relations, they should not have been surprised.... Their expectation should have been managed by cpl from nov last year.... Management needed to be a lot closer to Patersons and other brokers.

Cpl have posted a finance presentation on their website, it actually reads quite well - and makes sense... Eig have given a big tick of approval on both the company and management. That is worth quite a bit....

Just imagine the fire power eig can bring!! We are where we are, but I think we can recover well even in a crap market. Just need a little time for the funding arrangement to sink in. I bet there will be some savings in capex along the way.

It will be interesting to see how we go on the tsx, the Canadians may have a different view- they would have had some time to absorbe the implications..... I still can't believe that they still traded while we were in a halt, or at least advise the Canadians what was going on in aus... I would certainly be livid.

FROM PATERSONS

Event

Coalspur has disappointed by coming out of suspension but still does not have the funding that was expected. The gap of $100-150m remains.
Today’s announcement relates to the previously agreed debt funding from EIG that has now been increased to $350m from the previous $300m.
As part of the EIG debt deal, major shareholder Highland Park has agreed to subordinate its existing $70m debt facility to Coalspur.
Of the $350m, $37m will be drawn down immediately upon shareholder approval of the debt and warrants deal which it expects to conduct in the coming months. A further $120m will be drawn down upon regulatory approvals, which are now expected also in the coming months (was due in the first quarter).
Impact
The Board of CPL has decided to go it alone after having received unattractive offers from potential equity partners. The company will proceed with project development even though it is not fully funded. This is a high risk strategy. In twelve months’ time CPL could have over $150m in debt, which has been spent developing the project, but is not completed, in the hope that greater value will be realised from potential equity partners and that the overall dark sentiment towards coal has improved. Neither are in the control of management.
We are unhappy that the funding deal we understood to be imminent over the past few months has failed to materialise. Dilution has not been avoided, just delayed in the hope of reducing its size. In exchange shareholders are at risk of losing control of their company to the debtholders.
CPL has been one of our favourites for a long time, and is still one of the best thermal coal projects we know, but until the funding gap is closed we cannot see any strong appreciation in the shareprice. Having tried to secure a partner for the best part of a year, most well-known groups would have had the chance to invest and have chosen not to do so. Accordingly we are downgrading to a HOLD recommendation with a price target of $0.45 per share.
Andrew Harrington
Resources Analyst, Coal and Specialty Metals