Looks like Coote is trying to buy a company shell to facilitate the listing of Greentrains. It is the cheapest and quickest way of getting a listing on the ASX. Listing Greentrains has been mooted in the past as an avenue under exploration of ridding Coote of that particular debt.
A quick check of the natural fuels co. in question doesn't appear to have any relationship except it is noted on the offer that Ganesha ( the Coote family trust) has a convertible note investment which will be coverted to shares if the offer goes ahead so there is a connection. Coote industrial at one stage did have an interest in a Bio fuel property down south. I am unsure as to whether this asset is still held or has been divested as non -core to Ganesha , Natural fuels or some other.
The second greentrains receivable ($35m) must be due and payable by now, plus its all becoming more urgent as a large chunk of the long term debt ( some$90m ) is now on "short term" status and due for repayment in February.
The banks are purportedly charging an arm and a leg in fees for small companies refinancing and demanding asset sales etc. (See companies such as elders.) Coote does not have the capacity to raise anywhere near the capital required by a dilutionary issue of shares at its current share price/market capitalisation and it has so far appeared to have failed to sell South Spur or garnered outside interest in the greentrain assets.
Expect an invitation to invest in Greentrains in your letterbox in the near future.
I hope they pull it off, but its going to be tight time wise but maybe the banks (Commonwealth ) will give them a stay of execution until an IPO gets away. It remains to be seen as to what the level of interest in rolling stock assets will be from the investment community and whether they will be able to find someone to underwrite the issue.
But hey, I'm just a mushroom shareholder - keep em in the dark and feed em sh''t. Just my guess about what this means.Could be barking up the wrong tree entirely, or just plain barking mad!! As they say DYOR
CXG Price at posting:
31.6¢ Sentiment: None Disclosure: Held
