Not Just Any Bank Will Dochuck this ones for you++
Reviewing all the risks...I spent some time trying to understand what Farhad has been trying to tell us for some time now...I have tried to connect the dots where I believe Farhad is taking us and why...I believe if he achieves his financing goals for Allana he will be called a genius in my books...He holds a proprietary Patent on a financial model....and we might get to benefit from his work...
There was an article or report (which I can not put my hands on right now) that made a very relevant assumption regarding debt financing for a junior miner...the premise was that borrowing from "
from large multi-lateral financing organizations" has the benefit of not being "impacted" by current market finacial cycles and recessions...as they are not funded like a bank...
I think our man Farhad is not only to be respected for his past achievements with Allana...but in time I believe will put Allana in a very envious postion of being backed by his "mulit - lateral financing organizations..." looks like we should soon see if we reap the benefits...his MBA is our asset...
Karma
From Dundee Report: Debt Financing Agreements (Q1/12E): Allana Potash has engaged BNP Paribas to help secure debt financings from international development agencies, in which they specialize. Management is confident that some agreements can be reached as soon as Q1/12. As project financing is often the most difficult task and accounts for much of the risk in junior miners, we believe this could be a significant catalyst for AAA shares.
From CHEKKMATES post of Dec 4th
As Mr. Abasov has stated in the application of the patent for his invention of the
creative financing instrument akin to a hybrid version of the “preferred stock”
that would offer superior security to holders and permutations of a dividend-- a serious problem that arises in finding financing for a moderately sized mining company is that it is “often unable to obtain a share valuation commensurate with its profit potential.” Patent application number:20110131068 “In-Kind Participating Preferred Security” (IPPS) The key here is in the mechanism that Farhad has created for shareholders as this model attracts capital development and does so without “hedging its books” or “diluting its shareholders”.. The “investor” or “debt financier” participates in the upside of Allana with a healthy “dividend” and return of principal “once production is underway”…
From Allana News Release: BNP Paribas has extensive expertise in financing African mining projects with over 30 large-scale transactions completed or ongoing, including significant experience in African fertilizer and potash project debt financing as well as structured commercial financing in Ethiopia. Ranked as the top mandated lead arranger of global export credit agency ("ECA") backed loans for the last four years by Dealogic, BNP Paribas has facilitated transactions with ECA's, international development banks and other global and regional financial institutions and funds that participate in the financing of projects similar in nature to Allana's. Farhad states; "the management team and our advisors believe that most of the debt financing can be sourced from large multi-lateral financing organizations as well as ECA's. We are encouraged by past successful financings of similarly structured resource projects in Africa and we are confident that BNP Paribas' experience and global network will help us to secure the project's financing."
From Allana Website: Recently announced $10M strategic investment from International Finance Corp. (IFC) –strong stamp of approval from one of the largest multi-lateral financing organizations in the world. IFC will also support Allana at the construction stage (IFC invested $18 billion in private enterprises worldwide in 2010). Strategic investment from IFC (International Finance Corporation), the only potash project worldwide with IFC support.
Ethiopia is a member of the Multilateral Investment Guarantee Agency (MIGA) and the Convention on the Settlement of Investment Disputes between States and Nationals of Other States.