Niko Resources Ltd NKRSF

Financing or Sale

[zibo]

If NIKO were to obtain new financing they would require approimatley 750 million, 550 to pay out Cortes and the Note holder's and 200 to fund develoment, if the interest rate was 10% that would be 75 million @ year in payments which they can't pay with current reveue. In 2 years their revenue should be in the 250 to 300 million @ year range and payments won't a problem then but NIKO would require a no payment loan for 2 years, if Bangladesh would pay up that would change things.

I'm thinking that as a lender rather than lend 750 mill it would be far more lucrative to just offer NIKO 750 mill and buy them out, since RIL is the operator there wouldn't be a whole lot of work involved in owning D-6 and the return would be a lot better since you're putting up the money either way.

Cortes is owed about 430 mill and not receiving any payments so rather than fund NIKO just offer them 150 to 200 Mill + debt of 430 Mill and take over. If Cortes was to make an offer that might spur BP or RIL to make a move which would be a good scenario.

I think the sale of D-6 is much more likley than obtaining financing. If they got 600 mill they would be debt free and have over .50 @ share in cash and still have Bangladesh.