gutsy move by the board

This has got to be a gutsy move by the board. Witholding the princple payment for the quarter to get the lenders to pull their fingers out and get a long term finance agreement in place!

WOW!

The board I suspect has not done this lightly as there are a number of things that would be playing out here;

1. The Lenders can call up the debt, hence throw Redbank into the hands of a liquidator and potentially loose all value as the supply agreement with Ausgrid would become null and void leaving no value in Redbank - Net result everyone looses

2. Redbank will incur penalty charges/interest due to witholding the quarterly payment (even when the interest is paid) This is cost Redbank doesnt need.

3. Merill will have the opportunity to try and buy more of Redbank's debt from existing lenders, hence leveraging up from its existing 25%. (I wonder if the two US directors have any friends at Merill)

All in all, I think this is the right move by the board. I am sure that a long term finance agreement can be struck with reduced interest % that would result in all parties having a win.

Hold on for the ride!