Post by
Petz on Sep 14, 2022 6:51pm
Does Glencore really want TV to disappear?
So typically in a CCAA, shareholders get eliminated and creditors get anything that remains but is this really good for Glencore. Yes as a creditor they could look to receive the 20-30m they are owed but that might not be what they really want.
As they owe 26% of the share they lose a few dollars but if the shares disappear completely and TV ceases to exist (goes officially bankrupt) and comes back as a new entity, glencore could stand to lose the offtake agreements. Those agreements mean nothing if the company ceases to exist. 20-30m is nothing compared to the millions of pounds of concentrate that they would no longer have a right to.
CCAA allow for contracts to be cancelled as part of the restructuring and that might be what TV is looking for to get out of the offtake agreements and the hedging.They just stated they started the regulatory work to restart Perkoa in August and even though they said no decision has been made.....why would they spend all that cash and fixing it and doing the paper work if it wasn't planned to restart. Wipe out shareholders, sell off Caribou or other assets or future production to pay off Glencore and then restructure in a way where Glencore is not in control of everything. Remember that Glencore even though it is the main shareholder is not the major creditor as a group of banks are owed 80m plus
Maybe shareholders won't lose everything just because Glencore wants to keep control of the concentrates coming out of Perkoa and RP. You never know what's going on behind the scenes
Comment by
Petz on Sep 15, 2022 10:25pm
Oh i assume there will be nothing left but I'm just pointing out that no matter what the monitor may want to approve, any restructuring needs approval from creditors as well for it to work and that Glencore may not want things to go in a particular direction if it means they lose the offtake agreements