Re: ...Wow, A Loaded Question
posted on
Feb 14, 2009 10:58AM
John, actually the rate of interest would be 21 percent since interest was technically paid up front for a year and a half. Then add all the fees etc that you mention and the Salman loan is probably over 30 percent or more. And since the interest was paid by deducting from the amount borrowed, the tough part is to pay back the entire amount by this October 19th?
The Chinese line of credit you mention for $15,000,000 is interesting as its to be paid back with production. With a glut of nickel on the market I don't see any rush to be paid back in kind. But for JnJ to get back its $15,000,000 would they not have to pay off the Salman debt and other obligations first? Then spend even more money to complete construction and fire up the mill? Seems like it would be cheaper to walk away from the $15,000,000 IMO.
One interesting idea is for companies that are sinking in debt with dire prospects is to merge with a producing, cash positive company who could afford to sit on the Liberty assets until times improve. And as you say that could be a long time to all of our dissatisfaction. However I don't see even that idea helping current shareholders as the total debt obligations would wipe out the entire equity. It will be interesting to see how this company escapes this mess. Stay tuned, as the company always seems to come up with something before PDAC.