Ann: Re-domiciliation - ASX LR 10.1. Waiver - US Debt Pushdown, page-8

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Alnijo

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06/01/19

05:44

Post #: 37035839
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Originally posted by Bullspike ↑

My thoughts;

- This is mostly about providing loan security to Centerbridge. The 10.1 waiver is bitter sweet but worrying none the less; novated loans against Boarts US subsidiary means Boart can stay afloat longer but if default occurs, the waiver makes it easier for Centrebridge to acquire relevant Boart assets. Not good.

- It's almost certain Centerbridge is driving this. They'll obviously champion any moves to ensure they have sufficient collateral against their loans and that it's collateral they can benefit most from (i.e. assets domiciled in the US, via Boarts US subsidiary).

- Loans assigned to a US subsidiary is interesting because it partially accomplishes what the re-dom would have achieved via a similar structure, albeit in Canada. The conspiracy crystal ball suggests a PE takeover or some other left field play could be back on the cards, despite us blocking the re-domicile. Just speculation.

- I hope I'm reading it wrong and that it's a blessing in disguise (probably my denial kicking in) but generally it's all window dressing stuff required to stay afloat; adding loan interest covenants to debt principal, moving debt to subsidiaries, shifting collateral around to satisfy lenders.

Interesting times for Boart. Hard to see which way the world economies head, probably down given the credit slowdown and government debt piles. Current low interests rates mean reserve banks have no moves left. In terms of Boart, gold is looking good given the risks to US dollar, and copper price is holding ok, however demand for copper relies on strong economies but this is somewhat hedged by the fact the world is increasingly technological. Overall I think the gold and copper picture is positive for Boart. The proviso is they win or retain lots of gold and copper drilling contracts, and they don't default on their frenemy Centerbridge!

Unfortunately I feel Centerbridge will get them eventually. Whilst drilling remains suppressed, Boart is playing chess with a few pawns against grand master Centerbridge. This debt novation is another 'check' before the final 'checkmate'.

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Great read thank you for sharing
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0 Great analysis

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Ann: Re-domiciliation - ASX LR 10.1. Waiver - US Debt Pushdown, page-8

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