The provision of equity funding, and debt funding to facilitate the development of PIOP, is of the UTMOST importance to FMS and its shareholders. That's obvious.
The very basis of the reasons put to shareholders by the Board of FMS, prior to the GM held on 3 March 2020, in order to persuade shareholders to vote for the proposal to transfer ownership and management of PIOP into PIOP MineCo, was absolutely based on the premise that FMS would be free-carried to production, and that BBIG would provide/introduce the equity and debt required to develop PIOP, and to develop the BBIG Project incl its port and rail infrastructure.
So now we have been presented with this left-field proposal that BBIG transfers its BBIG project (port, rail, and certainly the accompanying liabilities) into FMS. Such that FMS would house the mine, the port and the rail development.
But in 2018, we were told that FMS needed to be Delisted, because that was the only way FMS and BBIG could raise the funds necessary to develop the mine and project.
Then in 2019 and into 2020, we were told that it was necessary to transfer the PIOP mine into a special purpose company, to house the PIOP mine, so that would enable debt and equity to be raised by BBIG to fund the development of PIOP mine.
NOW we are being told that, forget everything we were told over the last couple of years, we now need to scrap everything beforehand, we now need the port, rail, and the mine to be help within the one listed entity FMS!
Don't take my word for it - here is what we have been presented with.
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14 DECEMBER 2020
NON-BINDING INDICATIVE PROPOSAL FROM BBIG REGARDING POTENTIAL RESTRUCTURING OPPORTUNITY
NBIO BBIG has approached the Company to commence a discussion about a potential transaction that would result in Flinders retaining 100% ownership of the PIOP as well as 100% of BBIG’s port and rail infrastructure assets. BBIG has proposed that the development of the BBIG infrastructure and the PIOP mine as an integrated project within one corporate group would better facilitate financing of the project development.
2021 Annual Report Chairman’s Report
The first of these options was to place both the PIOP mine and the BBIG infrastructure within one corporate group to better facilitate financing. Accordingly, on 7 December 2020 Flinders received the Non-Binding Indicative Offer (NBIO) from BBIG proposing Flinders purchase 100% of the issued share capital of Forge Resources Swan Pty Ltd (FRS), a wholly owned subsidiary of BBIG which holds BBIG’s port and rail subsidiaries and infrastructure, including the agreement under the Railway (BBIG Rail Aus Pty Ltd) Agreement Act 2017 (State Rail Agreement) (Proposed Transaction) for a nominal sum of $1.
There are any number of questions which need to be answered.
But the obvious ones are:
1.in detail, what has happened to our investment in the JV asset to cause BBIG to offer to transfer its assets and project to FMS for a nominal sum of $1 only?
2. given the above, what has happened to the proposed debt and equity funding which BBIG was supposedly arranging??? Remember, when we were considering our vote to approve the transfer of PIOP mine to PIOP Mineco, we were told that BBIG would be arranging the funding for the developent. Thats how FMS was to be free-carried to production!
3. exactly at what stage is the funding for the development of BBIG project and PIOP mine at the moment?
4. has any funding negotiated.??
Because, Obviously :- no funding = no project = stranded PIOP asset !
FMS Price at posting:
84.5¢ Sentiment: None Disclosure: Held
(20min delay)