RE:RE:RE:IS SURGE ENERGY LOOKING TO BUY MORE ASSETS.? The rate is second tier lending , or a private lender. Definitely not credit card , not even close. In fact, usually this type of lending is considered bridge financing.
It could be an option that made more sense. Dilute the share count raise money at a incredibly low share price meaning if you really believe your trading at 50 % of your true value ( and your being realistic about true value ). You would of needed to print at 50 cents - 200 k in shares . This is no where near a bad thing . Its not perfect and I think there is a order here
1) get rid of that loan or find another way to pay it off using money at a cheaper rate or just pay it off out of cash flow ------ witch is possible with 300 M in free funds flow
2) then consider paying down credit lines to meet the highest standard balance sheet
3) then issue dividends or do share buy backs
So if you use shares to obtain capital and let's say there trading at 50 percent less then what they should be , then your paying 50 % for this money.
Also upon getting this new financing you would see a 10 percent spike in the share price . Borrowing at 8 looks good . Just optics due to the situation !
So one is borrow 100 million at 8 percent. The other option is raise capital through issuing shares avoiding debt. This was the right move if this is what was necessary to get the other banking that is not high interest.
Just my opinion. If this is what they had to do than it was the next RIGHT THING TO DO as they say.
I don't like the rate. However I understand the business decision.
My wife will say a million when it's 10 So I get the analogy of the credit card and it's actually like swearing
It makes a point The lending rate is not optimal !!
let's get along !! Lol.