RCPS, page-7

This was posted by previously posted Xmanrocks and provides a good assessment of the RCPS

"The asset grab off the NZ government appears to be a steal.
So I have been somewhat surprised at the slow reaction of the market to what has just been achieved by BRL.
My thoughts have been is this due to the share options and the major dilution they will cause should they all be exercised.
This morning I enlisted the help of a retired broker, who is much smarter than me, to decipher the options that are listed, in particular the RCPS issued at 2.2 cps, and run through possible cash flow scenario's of the business given the current macro environment.

Here's what I learnt.
The RCPS that were issued at 2.2 cps are under the control of the company whether to be redeemed/exercised or not.
This must be done with in 12 months, so in this case 2nd February 2018.
When running through the possible cash flow of the company between now and then and considering other options(refinancing) it is fair to assume none of these RCPS options will need to be exercised. BLOODY HAPPY DAYS.

Yes I know the smart money is already days ahead on me.......but honestly after learning this I could not believe I am purchasing shares at 12.5 cps this afternoon.


Here is a snippet from the 2 November 2016 cap raise announcement.

Subject to obtaining shareholder approval, the RCPS will be convertible into fully paid ordinary shares in Bathurst at a fixed conversion ratio of A$1,000 divided by A$0.022 per RCPS. The Company may elect to convert all of the RCPS (or only some of them) at any time after the Sale Agreement is unconditional on or before the maturity date, being 12 months from the date of issue.

I was very very happy to add to my holdings today based on the clarification I have received.

On another note my broker tells me that you can be sure that those that took part in the convertible notes issue were already investors in BRL and if they were interested in selling down and taking profits they would be selling down their existing holdings now and just replace there holdings with conversion shares so he thinks the sell down after the solid energy settlement is somewhat of a myth.

I don't like been drawn into what the shares are really worth but given the assets and business model I believe they are extremely undervalued."