EXPM:HRTFF - Post by User
Comment by
MudCreekeron Nov 22, 2021 6:41pm
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Post# 34154881
RE:Mudcreeker
RE:MudcreekerThere are still a variety of ways this could play out. To avoid what I described, Harte could find someone to spot them $70 million US to pay off Silver Lake before Dec. 1 (Appian?) . Not bloody likely. The details are yet to be revealed, but I think the framework is pretty clear.
Silver Lake has a fiduciary duty to their share holders to get the best deal they can. They are not a charity. Why would they settle for a deal like remedy suggests, when they could get all the assets just by foreclosing? I know Harte's shareholders would prefer that they were left with some value, but SVL's shareholders would have every right to be pissed at their management if they just gave away part of the asset unnecessarily.
The carefully worded passage that has been quoted several times talks about co-operating to "realise the full potential of the Sugar Zone mine and the associated land package". I'm sure that is exactly what they want. They would not get involved planning to realize less than the full potential to their own benefit. Co-incidentally that will also benefit the vast majority of other stakeholders. Employees, suppliers, White River, the governments of Ontario and Canada, the area's First Nations will all be better off with the mine operation continuing. Just not the share holders and unsecured creditors. Integrity? They'll be able to point at all those other stakeholders who benefit, and look pretty good to the public.
As far as shutting down goes, that ain't going to happen, because it serves no one's interests. The $2million was to see operations through the next little bit. It seems like it was pretty urgent, given that BNP had to do it - it couldn't wait two days for SLV to tack it on to the debt they bought. Consider the optics of that, if SVL bought the debt and then immediately supported the company with more cash. Would have looked nice, eh? The fact that the didn't do it that way, indicates to me that Harte was going to start bouncing cheques right then.
I lived through three CCAA "restructurings" in a 35 year career with a largish industrial concern. Never shut down for a day. That's not how these things work. There is no value in the asset if it's shut down. They do, however, play brinksmanship and chicken with each other through the whole process.