Well Grovellor I am by no means a 'sophisticated investor' but I...

Well Grovellor I am by no means a 'sophisticated investor' but I think i'm slowly wrapping my head around what this offer contains.

1. First of all, if the RSG offer goes ahead, RSG have made agreements with various existing NMG shareholders to purchase 19.99% of the already existing shares in NMG. Once again for clarity, basically buying 19.99% of the shares of the company. To pay for these shares RSG will not be using cash but instead will issue 1 RSG share for each 12 NMG shares obtained. Therefore these current NMG shareholders will be swapping 12 of their NMG shares for 1 RSG share.
(Importantly from this you can already assume that 19.99% of the existing NMG register is aligned with and prefers the RSG offer over the Chinese financing offer).

2. The $78.7m entitlement issue of c. notes to NMG shareholders !!! Basically this is offering all existing NMG shareholders the opportunity to purchase convertible notes. On p12 of the 25th Oct RSG announcement you can see Noble has 655,522,952 shares on issue. Each one of these shares is entitled to buy one c. note for a price of 12c.

655,522,952 x 12c = the $78.7m fundraising we are talking about. By RSG saying they will 'underwrite' this c. note issue means if for example only $40m is forthcoming from NMG shareholders to purchase the c . notes then RSG will purchase the remaining $38.7m in convertible notes.

*RSG state that if the deal goes ahead that they WILL purchase 1 c. note for every share of the previously stated 19.99% of NMG share register they will acquire.

Each of these c. notes has a 3 year maturity and pays 8% p.a. It is convertible into 1 NMG share each at maturity.


3. The $6.3m placement of c. notes to RSG !!! This will see RSG entitled too and buying $6.3m worth of 12c c. notes. = 52.5m c. notes.

4. RSG is providing a backing or guarantee for NMG to immediately draw a further $20m down from existing lenders that NMG have. Once the c. note issue is completed and funds have been received by NMG then this $20m and any other indebtedness NMG have will be repaid.

----------------------
WHATS IN IT FOR RSG ?

As stated in the RSG release p4, if all NMG shareholders take up their full entitlement to c. notes then RSG will hold 23.1% of the company. This comprise of the 19.99% of shares they will be acquiring, the 19.99% of c. notes they will be purchasing and the remaining 3.1% of the company will come from 'no.3', the $6.3m placement of c. notes to RSG.

If all NMG shareholders do not take up full entitlement (highly likely I presume) then RSG will end up buying the remaining c. notes and will hold greater than 23.1% of the company.

-----------------
WHAT WILL RSG HAVE TO PAY ?

1. It will have to issue 10,919,920m shares to existing NMG shareholders for their 19.99% of the shares in NMG.

Maths for this = 19.99% of the existing 655, 522, 952 NMG shares is 131, 039,038 divided by 12 = 10,919,920 RSG shares. (12 NMG shares into 1 RSG share)

2. $15.72m purchase of c. notes.

Maths for this = 131,039,038 of newly acquired NMG shares x .12 = $15,724,684

3. $6.3m - for the separate placement of c. notes to RSG. = 52.5m c. notes

4. Any shortfall of c. notes not purchased by NMG shareholders. Take your guess at the $$$. Will be somewhere in the vicinity of $63m if no c. notes are purchased by entitled NMG shareholders to ZERO $ if all c. notes entitlements are purchased.

Hope this helps.

Please correct me if anything here is wrong.

For better or for worse. Trust RSG management know what they are doing. I am not fully familiar with the quality and potential of the Bibiana and other NMG assets.