Post by
jiayouha on Jun 13, 2018 12:31am
my naive understanding about the news
I am not sure but my understanding is that KAT will not issue any shares. KCC will do this. To make it simple, it sounds like that KMLF collect all debt and will forgo a part of it, financed by net debt issued by Glencore. ALL shareholders of KCC are not diluted by issuance (like KMLF give free money to DRC). Such transaction will affect cash flow (interest payment and earnings) of KMLF (therefore our KAT) collected from KCC. What's worse, KMLF needs to pay interests to Glencore for the new debt. However, considering the cash cow feature of KCC, I believe such debt reduction has limited effect on KAT and KAT stock price will skyrocket in the future when tons of cobalt are produced. Thanks for reading.