Katanga Mining Ltd Ord KATFF

debt for equity, dilution and reverse stocksplit

[Katanga]

I guess the what will happen is that they issue something like 12b shares to wipe out the debt and then do a 15:1 reverse stocksplit. That allows Glencore to take money through dividends tax free (instead of interest payments that are taxed). So now we have a company with no debt, 1B shares outstanding. 

Someone can run the actual numbers/scenario, but I am not so sure if this is a bad thing, sure we get reduced to 1/15 our shares, but now minimal debt and interest. Market cap can be more like 3B and our shares are worth $2.00 - $3.00. 250M a year for dividends. so like $.10 per share. 

And room to grow.....thoughts?

[stockhunter20001]

why would they do that? who will get the the shares instead of debt?  KCC owes KAT and KAT owes Glencore. If Glencore gets the shares and wipe out KAT debt, what benefit will they get really? they thav 86% of the shares. are we saying the remaining 14% (our shares) are really worth KAT debt?

[Lech1988]

TBH I don't know how it would work but an equity for debt swap I agree makes no sense. Why would Glencore push to dilute their own shareholdings for yet more shares of KAT instead of rolling the debt forward and just collecting the (very high) interest payments.  They are basically eliminating $500m of interest income annually by doing this.  

[Katanga]

I agree with you - but if their goal is to realize profits and get their hands on actual money, then rather than waiting for the life of this mine to be done...maybe it is easier to make KAT somewhat viable and valuable and then sell the KAT shares for a profit. The interest income is just on paper as they have to keep rolling it over. They can't use that money to go out and buy something

[Katanga]

My understanding is that KCC doesn't owe KAT anymore. That was the whole thing from last year. KCC was getting crushed under the debt. KCC issued more shares to KAT and converted that KCC debt to equity with Geca getting free shares to stay at 25%. So now, KAT has more shares of KCC and only KAT owes Glencore. So the next step is Glencore gets more shares of KAT. There is nothing else they

[Lech1988]

Correct me if I'm wrong but mining companies (especially mining companies in the process of ramping up operations) never ever ever pay dividends.  As in it is mostly unheard of. The halting of Cobalt exports this year completely screwed up their plans hence why KAT had to seek additional financing from banks guaranteed by Glencore.  I think the plan was to have KAT fully self

[Katanga]

I think most mining companies pay dividends. I'm not even sure if rolling the loans is what we want and I'm not sure why they would work on this type of proposal 2 years in advance. Right now at 0.35 share and a 15:1 reverse split, makes it $5.00 stock and 135M shares outstanding. Then say they don't convert all the debt, something like half of it. So 3.5B at $5.00 per share means

[topdop]

@Katanga do not delude yourself this is not a mining company that will pay any dividend to the general class shareholders in the forseeable future. It must overcome many, many other requirements from its income funds before any BoD would ever initiate a divvy policy. You are dreaming. KAT is way too young, not yet out of fully Commissioning its newly constructed assets as well there are a few

[Lech1988]

KAT is still currently paying the interest on the loans at the moment no? I’m sure this was an item on the quarterly report. I don’t think interest accruing now is being recapitalised.  The issue I see with the rights issue is wouldn’t that basically be Glencore providing cash to KAT to pay back the outstanding interest to themselves? All GLEN would be left with is more shares in KAT and

[Kidlaw1]

Everyone is losing confidence because there afraid of what Glencore will do to resolve KAT's debt.   But if KAT is actually capable of paying back it's loan once fully comissioned and as more car companies roll out their EV lineup of vehicles, and I think Glencore is confident in this is well,wouldn't be a simple matter to push back the due date of the loan to a future point

[Lech1988]

Yes, tbh this is the most likely scenario. Also there is this sudden panic but the loans arent due for 2 years. I admit it’s very weird for Glencore to suddenly come up with this proposal so far ahead of the maturity.  Honestly we can speculate all we want on this board as to why suddenly the shares are tanking but no one knows. Panic selling and day traders can easily get the volumes to

[stockhunter20001]

@topdop you sound so negative to the level that's concerning. Remember that we always look for you as our beacon of faith in this long going storm, please keep the faith! OR Go Raptors!

[topdop]

@stockhunter20001 no I think you have it all wrong: I have gone on at length on my SA KvN KAT Blog about how valuable I rate our KAT assets, how incredible the Central African Copperbelt is (I was born there; grew up there; had my first Mining Grad job there...). No. I'm not a fan-boy. What I am, is very critical of KAT's former, and lacklustre, cheating, senior Execs and Board Members

[bigguy56]

your statement that most mining companies pay dividends is not true. It especially not true of development stage companies. I would have to do a broader analysis to say otherwise. I got out fof the most part with this last downturn . I simply cannot be exposed to further losses right now I may get back in later. I do believe something bad may happen here . This investment was a bad decision on my