What would be interesting is if MOL enforced the agreement.
That would entail Hanlong losing approx $45mil from the $60mil loan. MOL would need to repay the balance immediately, that would not be a problem, they have enough cash on hand.
The company then goes for a mix of share and debt funding to build the mine. In todays environment this could be achieved without to much trouble. What would be the reaction from the market to its S/P thats the most important question, and what would happen to the relationship with Hanlong. Add to this we have no idea what other plans there are a foot with regard to further acquisitions etc,that Derek Fisher hinted to in his last Boardroom Radio interview.
We need to know what the Company proposes and have they looked at other options that are available in the current climate. One thing is for sure we will need a shareholder meeting to approve or reject any extension for options to Hanlong. This all takes time and only drags on the process, we should have had Term Sheets signed by now, under the circumstances Hanlong will want to hold of until the options have been agreed.
MOL Price at posting:
$1.53 Sentiment: Buy Disclosure: Held
