RE:RE:Xandar! You're back! Just in time.Thanks for your insight
The only thing I'd add would be the understanding that financing was being worked on as far back as when the original LOI was put out in Jan/15, and would have been a part of the bid that won the bidding process. I think people were tossing around the idea that lots of leg work for the facility was completed under the ballpark 125 over 2 and 50 over 18 back in Q1/Q2 2015.
Anyways, all speculation, things can obviously change and probably have, so of course no definitive answers are available; however, for the time being it's business as usual and they are on the clock again.
As knicks mentioned, we are at the very minimum completely pricing in the risks at this stage, but, investors here aren't the biggest fans of any guidance of any kind for obvious reason. 1.5 hour bullish CC and only a handful of shares traded, we all know what needs to happen to next to move this stock.
Xandar7 wrote: Pipsquak3: You’ve raised the main unanswered issues of the contract for which I cannot offer definitive answers, only the following comments:
1) The funding for the overall SDI project is unclear at this time, but likely involves several organizations due to its size and scope. The UN has many separate initiatives that would be positively affected by the SDI concept and would therefore benefit from its success, but it is not likely that they are contributing financially to its direct execution. It is also unlikely that the IMF is providing the lion’s share of the financing since it has strict qualification policies for all of the participating parties. However, the WB, through the IDA (International Development Association), could provide a significant amount of support. For example, on February 18, 2016, it approved a $164M USD project for High Priority Roads and on February 25 it approved $156M USD for a DRC Urban Water Supply Project, both of which would benefit greatly from the SDI work. There are no notifications from the WB and the IDA that they are supporting a large SDI project. Other sources of funding could involve the African Development Bank, AKFED (Aga Khan Fund) and the EXIM Bank of China, all of which have significant investments and lines of credit in the DRC.
The ultimate source of the funding for the SDI project has significant implications for the level of risk and until this is known by the investment community, the risk remains high for conservative reasons. One of the reasons for this approach is the nature of the project financing facility, which has yet to be completed. The company states:
Finalization of Project Finance Facility
Intermap will not receive the USD$12 million down payment and will not commence work under the SDI contract until the concessionaire has finalized the project finance facility. While Intermap believes the facility will be finalized in a reasonable period of time, Intermap is not a party to the facility negotiations and both finalization and timing of the financing facility are outside of Intermap's control.
(See more at: https://www.canadianinsider.com/intermap-executes-us-175-million-orion-platform-spatial-data-infrastructure-contract)
2) With regard to the guarantees, it pretty much depends on the nature of the funding organization. The WB and the IMF, for example, transfer the obligations to the national contracting agency and its bank with the contractor very much on their own for enforcing the terms. Project suspensions or cancellations without restitution for the contractor would affect the country’s credit line with the WB and the IMF, but the burden of resolution would rest with the contractor. The enforcement of penalties would be complex at best.
There are outside contract protection instruments available to companies like Intermap. For example, Canadian companies may use the services of the Export Development Corporation (EDC) that can provide, for a fee, termination or cancellation insurance, as well as non-payment or default insurance. Has Intermap looked into covering itself with this type of insurance?
3) It’s a very positive development that IGN FI will now have a role in this project. They have done more mapping in more African countries than any other company in the world. And although they are not very familiar with interferometric SAR data, their connections and understanding of the DRC will be very valuable and hopefully helpful, depending on the extent of their role.
4) Yes, it would be positive to have the contract outside of the political climate. However, it would be naive to think that any contract is independent of the political climate, particularly in a country like the DRC for a project of this magnitude, when the government is a partner in the enterprise.