RE:RE: $$ Long Term DebtWhen TEC cut this deal, they would make out like bandits if the LNG project went through.
But they had to have known that if it did not- it was questionable how much of their loan they could recover. (Only shareholders were under illusions the Shell gas operations were inherently profitable, at the price futures people expected then.)
And then there is the kicker of the operating licences PEA does not have (and TEC would not get either if it foreclosed on the loan). That was pretty iffy even two years ago.
The 15% interest TEC gets is not what makes it worth it, by their business model. Its pretty small potatoes for the risk they took.
Thats probably all just water under the bridge now that the Alberta operation is here and now profitable by anyone's standards. Since it means that one way or another TEC can now expect to recover the loan and all the interest. Thats not winning in their game- but beats by a long shot losing their shirts, which they were on track for until prices started running up.
But I always wondered if the reason TEC took such a big risk in 2019 is because there are clauses where Shell guaranteed the value of their loan. (And yes, they did want rid of this operation bad enough to do that.)
Pure speculation. But if there is such a clause, no one would know about it. Ad it would not come out until Shell paid off TEC