Understanding the announcementOn first glance the announcement from today was great and the SP movement did show that Mr. Market also saw it that way. But I have read the announcement now at least 3 times and really do not understand it....
Despite popular opinion it is clear that the company will not get $200m. This money has to be raised. And if I read it carefully and correctly it seems that the agreement only says that MMS, or rather MAL wil use Jewel Bright Limited to raise $200m in "various" tranches. So basically Jewel Bright becomes the broker of MAL, right? In the first tranch Jewel Bright will have to raise $50m. In return for that they get a 10% fee ($5m) and a "specified amount of options" in MAL. However, this "speciied amount" has not been disclosed to the market.
So in my understanding the Tulshyan Group is confident that the assets of MAL will be worth $200m and they have put forward their subsidury Jewel Bright to be the broker for the $200m capital raisings. In return Jewel Bright will get 10% of the money raised and a UNspecified number of options. Guess 10% is not abnormal for as broker fee. The options may be.
But what is unclear is who now has the mandate to raise the money. I mean if they do not manage to raise the money, who is to blaim? MAL or Jewel? Seems to be Jewel. But what happens if Jewel does not manage to raise the money?
Anyway, sounds like Tulshyan Group is pretty confident in MAL and probably will be one of the (larger) investors. And for sure they get 10% of all money raised and I guess also something like 10% of the options that are given.
Just not clear how the MMS-MAL situation will be if MMS has a MC of 10m and MAL raises $50m?! If MAL raises $50m and MMS owns MAL their MC will go up as well, right?
Anyway, it all does look good but it does raise a lot of questions of how the company structure is going to look... Is there anybody here who understands this a bit better and cares to explain it?