Post by
pierrelebel on Nov 20, 2023 5:56pm
I do not get it. Please, someone, anyone, explain....
WHY would Dundee burrow $20,000,000 at high interest rate to buy back some preferred shares when it is sitting on many more millions in cash?
WHY?
Comment by
Macpoor on Nov 21, 2023 5:44am
Interesting to see how the market reacts to this news!
Comment by
Catscratch on Nov 21, 2023 8:56am
It seems clear that Dundee's plan is for loan to be temporary as it designed as repayable without penalties. Crealy they had an opportunity to buy two big pref share tranches so wanted to strike. Hopefully this provides some motivation to monetize assets fasters.
Comment by
pierrelebel on Nov 21, 2023 11:48am
The $20,000,000 loan may be temporary but the question remains why borrow $20,000,000 at a minimum of 9.15% per year when the corporation is sitting on over $25,000,000 in cash (and equivalent) according to their September 30 2023 balance sheet. Why?
Comment by
Catscratch on Nov 21, 2023 12:10pm
Because they have $3M in quarterly head office general and admin costs. They fund these costs with cash to keep the lights on.
Comment by
Macpoor on Nov 21, 2023 5:36pm
The market did not care much to the news! As Catscratch mentioned , we hope this loan make them to sell some non core assets.