GREY:LRTNF - Post by User
Comment by
cashtango00on Oct 26, 2022 8:37am
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Post# 35049058
RE:RE:Top Holders
RE:RE:Top Holders1 of 2 things will happen here.
1. they go into bankruptcy protection and they will attain financing from usually one of the large holders who will demand a massive amount of equity for the loan. If they get financing, the creditor's debt will also be partially or totally turned to equity as well to clean the balance sheet. In this case, common shareholders will be given 0 value in the new share structure or an extremely small percentage....usually 1-3% meaning the shares are worth a penny or two
2. no one wants to finance because the project doesn't appear feasible anymore and the creditor just takes the asset and will sell it to someone who might take a run at it again in the future.
In most cases, #1 occurs since it was an operating mine, even though it was cashflow negative.
I was in the industry for quite some time before retiring and have seen this a million times with junior resource issues. In either case, the existing common shareholder is getting close to nothing at best.