Takeover Implied, page-27

The next piece of the puzzle to look at - Project structure.

A normal Project level JV structure is

BEFORE (project levels)- Genorah BEE (26%) + NKP (76%)

AFTER "A" - Genorah BEE (26%) + NKP(23%) + Zijin (51%)

The farm in partner, being Zijin would not just get a pro rata piece of our project, for nothing. They need to pay an earn in fee. This usually results in a free carry on capex for the existing owners of the project. (or cash injection distributed to the original owners to distribute towards their capex share)

However, that is now what we observe happening.

What we have occurring is

AFTER "B"- Genorah BEE (26%) Free carried + NKP(74% assimulated by Zijin)

Inside of the NKP we have as shareholders
NKP Zijin script and Genorah script being acquired by Zijin
+ NKP aussie script.

Both "BEFORE" original owners of the project deserve a free carry. (or cash paid by Zijin into the capex share)
G have theirs at a project level. (and as are selling for cash their NKP script just leaves the Aussie NKP holders)
But how under this scheme, can the Aussie minority holders NKP also get a free carry?

It becomes a very awkward affair in order to given the original owner NKP aussies, something free carried.
how do you distinguish a Zijin NKP shareholder, from a Aussie NKP shareholder.

So, my conclusion - why take an assimilation path (AFTER "B"), if it is not a takeover intended, where the simpler (AFTER "A") traditional project level JV is far simpler for allocating degrees of free carry and partner earn in.