RE:[Debt Due and the SDI]boss_waz wrote: Some verbiage from the last con call regarding debt and the sdi:
"...The associated rate on two of the notes was reduced from 20% to 15%. We coupled this new $13.1 million note with the restructuring note from March totaling $9.1 million, the new outstanding balance with Vertex is therefore $22.3 million. The $9.1 million portion of this balance is due in August and the $13.1 million portion is due in October. We expect to service this debt from the proceeds of our SDI work and other portions of our business. The proceeds of the new $5 million borrowings were used to retire $600,000 of debt that came due in April from a lender other than Vertex, is also used for the payment of certain outstanding operating costs of the company and for the funding of pre-SDI activities required in advance of the project down payment and commencements..."
Regarding the highlighted debt dates:
- if imp intends to meet these dates then one could infer that they expect serious revenues over the next several months. Logic suggests its sdi revenue (speaking to imminent closure)
- of course these dates could concievably be extended once again for all or the remaining portions
Regarding pre-sdi activities:
- its apparant that pre work on the sdi has commenced (again speaking to imminent closure)
- Vertex increased lendings from 17m to 22m (roughly)...nearly %30 increase in exposure...what does that say about risk/confidence?
Boss I don’t think anyone actually believes that the SDI in RDC is BS or that it was made up in anyway. You can read the LOI online no one is disputing this. What some are saying (including myself) is that this SDI is at risk. can be delayed and/or cancelled and that would be an issue for the SP. There is no announcement on SDI2 at this point so all relies on one riskier than originally expected SDI.
As for Vertex if it came down to IMP going to the lenders because they need more cash to close/start the SDI with already $17M in loans, royalties of 20% and owning 16M shares it seems logical that they would take the additional risk in order to get their ROI on the deal.
Again I am long on this one and even if the SDI1 DP comes in I will keep the stock, might trim and take some return but will be definitively holding on to it. I do hope SDI comes in but when it comes to everyone asking why the stock is drifting downwards i think it's pretty obvious that the risk associated to it is higher than when they originally announced the SDI.