A lot og good posts here today I have just finished reading todays news and a lot of good posts on this board.
Like you, my ability to comment on todays news is limited to the content of the released news. We are all looking inside from the outside. My preference is to hold my tongue and my shares and await additional corporate developments.
Baja needs more project financing. There is no doubt in my find that this will come. It remains to be seen if this will take the form of debt financing, equity financing and/or selling off a further portion of Baja's 70% ownership of MMB.
Debt financing is limited by the fact that MMB's senior debt holders hold first mortgages on the Boleo assets. They are, and will remain, first in line. Their position in line takes a back seat if, as and when additional project financing is secured. For the life of me, I do not see how Mount Kellett would want to dilute the capital stock of Baja with an equity financing (and dilute its own 19.9% position), unless such equity financing was on financially attractive terms to MK.
I do not know what tomorrow holds. On the sunny side of the street my guess is a refinancing package of two hundred million dollars maximum with the Korean's picking up their 30% share. Baja will match this with its 70% share (with US $140 million) comprised by a Baja sale of 10% MMB, the issuance of 70 million common shares at a price of CND
.60 and the issuance of convertible preferred shares or convertible redeemable debentures. Mount Kellett will be involved.
Issuance of subordinated long term debt does not require shareholder approval. Equity financing does not require shareholder approval. Issuance of preferred shares will require shareholder approval. There will not be any dividend attached to preferred shares as that would violate the convenants attached to the senior debt instruments. I do not believe that an issuance of debentures require shareholder approval as it is treated as subordinate debt.
The above is pure conjecture. Anything beyond the above is blue sky wishful thinking. And going above that the oxygen gets very thin. Best to keep ones feet on the ground. WHIW, I am holding on to all my shares.
Doug.