They weren't my deals, I was involved in them. They were primarily for acquisition funding of various established businesses. The purchaser was then taken to Capital Markets afterwards as it was purely acquisition funding.
My point was that they have been talking about Finance for many years. It does not take this many years to get this kind of Finance, even with the risk involved. I think that they are struggling to get Finance as Banks have / had lower risk alternatives to expose themselves to for similar returns. This was also the case with Gina.
If you had 100k to invest and I told you you would get the same return if you invested in SDL or if you invested in BHP, completely different risk profiles, where would you put your money? This is what the Banks are doing. They are looking at the risks, real or perceived, and weighing up based on potential return where they want to put their money. They have finite funds and are trying to get the highest return for the least risk.
Regarding Roy Hill, I am sure you will agree that 10B is exponentially harder to get than 3.5B.
I believe that the country and political risk associated with the deal, real or perceived, will mean that it is going to be difficult for many commercial banks to get it past their risk committees. This is why there is the involvement of Development Banks, who are more inclined, established, to take this kind of risk.
Take what I say how you will. I am just an anonymous poster on a forum.
Once again, I have added to my holdings today in the Mid 6's as I think the mine is critical to the regions development and therefore will get Development Bank funding. Until this is confirmed and unconditional we will have a bumpy ride. At the end of the day it is high risk, but, hopefully, with that comes high reward for the Masochists like me.
All in my opinion only.
SDL Price at posting:
6.6¢ Sentiment: None Disclosure: Held
