RE:RE:155 million shares would roughly need to be issued to repay HCI_STEEL wrote: Correction 15M shares os. So existing shareholders would own 10% of the company after a deb repayment. Unless they can come up with ~167 million dollars, all they've done is delayed the inevitable
The debs aren't due for 2.5 years. Why are you making your calculations as if they're going to pay them off next week by issuing shares at today's market price??
The current worries are short term IMO, primarily the June 30 interest payment and their immediate working capital needs. Presumably, operating conditions are better now than in Jan through April -- though I'm frankly still skeptical that they're turning a profit.
Paying out the $3m interest payment by issuing equity at current prices would be highly dilutative. It's a real possibility but I expect they'll find the cash.
We don't have many details, but the fact that IQ is willing to subordinate their loan could potentially mean that they are able to borrow significantly against their PP&E. My guess is that any new financing will be fairly expensive, but it will buy them some time to show that the mill can make money even in a low pulp-price environment. (Jury is still out on whether this is really true!)
Even with flawless execution, the bio-products demo plant won't have been through it's 18 month test phase before the debs are due. So they really have to demonstrate that Thurso can run consistently with significant positive EBITDA.