RE:RE:RE:RE:Largo Announces CDN$12 Million Convertible Bridge LoanThis type of bridge loan is not that uncommon. The company needs this loan to be able to restructure its loans with the banks.
ARC provides a loan of 12 million for 6 months (at 20% interest = 1.2million)
ARC will have the option to convert these 12 million into shares at 1.01. If the shares go up in 6 months ARC will have a big/small benefit depending on the performance of the shares. If they don't ARC will make 1.2 million
I do not like the dillution but this is better that another equity offering at this level which will provide shares at a low price and another chunk of warrants.
As retail shareholders we have the option of buying at this price or continue to complaint. We also have the option of bailing out at any time. Arias is in for the long run and has put a lot money on the table to make this a success.
The subscription for another 40 million will only materialize if there is another offering and this will depend on multiple factors (Vanadium prices, rain and CN, etc).
"Pursuant to the Bridge Loan documents, the ARC Funds will also be granted a participation option to subscribe for up to an aggregate of CDN$40 million of securities under any proposed offering of Common Shares or securities exchangeable or convertible into Common Shares on or after the date of the loan agreement "