GREY:MAAFF - Post by User
Comment by
hkaasknownon Jan 22, 2010 5:26pm
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Post# 16710063
RE: JV Question
RE: JV QuestionI may not be older or wiser, but here is what I see happening if a JV was signed. To be clear, MAG owns 90% and ROC owns 10% of the project, although I don't believe ROC is actually responsible for financing it's 10% share of the cost. That's where it might get a bit complicated. I think of it as another type of loyalty. Anyone correct me if I am wrong.
JV partner gets 45% stake by:
1. giving cash payments to MAG, say $150M in total.
2. providing a loan. Say, $500M loan to MAG at an attractive interest rate (5%?)
Most likely, it would be a comibination: cash payments of, say $100M, and a loan of $300M. With that, MAA should be able to fund its share of the project costs. JV partner would be, of course, responsible for its share (45%) of the costs going forward. The cash payments would include considerations given to the capex spent so far. If there are any outstanding A/P or A/R for the project at the time of the agreement, each item would be agreed to have been inlcuded with the payment or not. I am sure JV would want to take a piece of Phase 2. Let's see how well the Burtons can negotiate.
Waiting for another pullback to buy back.