Katanga Mining Ltd Ord KATFF

RE:RE:Any thoughts about the debt offer?

[Sogosohubidu201]

There will be several options available to handle the debts. Equity for debts swap is just one of the options, which is merely a speculation by Financial Time author. For example, several options may be available below:

1. Push the debts due day further from 2021 to 2025-2030 allowing Glencore to happily collect 6% interest on the debts while at the same time for KCC to pay off $500 millions principal debts per year for the next 8 years from next year as already arranged between Glencore and Gecamines. This is the most likely scenario in my view. For this arrangement, there is possibility that we minority shareholders may receive dividends earlier from money left after debt payment.

2. Take bank loans at lower interest rate and pay off Glencore’s debts entirely. Consider the powerful free cash flow of $1-1.5 billions per years. KAT should be in a position to do so then.

3. Buy out the minority shareholders at say, $5 per share, still low than the NPV.

4. Debts for equity swap at say $5 per share (still lower than NPV) and basically double the share count and wipe out all the debts. Minority will own about 7% total share. But minority should expect to receive dividends immediately from then at 30-40 cents of dividends per share per year if majority of free cash flow is distributed.