Katanga Mining Ltd Ord KATFF

RE:1Q19 Results

[bobsacramento]

Lech1988 wrote: Any thoughts? Actual numbers were not all that surprising. 

Concern now (and there is always a concern with this thing) is that Glencore has formed a committee with Katanga addressing its debt load, interest owed (circa $500m), and repayment schedule.  The FT has an article about this that suggests a debt for equity swap is likely before the debt is due in 2021.  If that happens given the size of the debt and current share price we would all likely be completely wiped out.  Other option is of course to roll the loans, but the thought that a debt for equity swap is even on the cards is really bad.    

FT has been notoriously wrong before, especially when they quote analysts as their source without further naming their sources. They botched the KCC recapitalization deal, and I wouldn’t make investment decisions based on their flawed analysis.