However, I think it impossible to restructure your financial situation without the participation of major investors as well as the banks. It goes hand in hand.
It's no coincidence that the amount of Kagara ANZ debt matched the offer for Lounge Lizard. 68 to 68. I suspect the hire/lease facility of 11 mill had somewhat different terms.
Banks being banks will demand all prior debts are settled prior to refinancing. Fact.
If there is a shortfall from bank debt settled vs cash at bank and outstanding creditor payments, then 99% of the time banks will demand the shortfall be made up by private investors - and that doesn't rule out a bank willing to provide a loan for this - but KZL would then have to jump on the phone and try to sell allotments of shares or through some other means at a 10-20% discount to key investors. Kagara needs 2-7 mill immediately to cover outstanding creditor payment by my count and at least 25 mill in cash to fund operations for the next two quarters.
However, do we, I, you, they..... all want to be here again in six months. Not really, so I think they will either go for 25-50 and try to be done with it.
I don't think they will have trouble locating existing, recent or new zinc investors to front 50 mill. This is peanuts to guys when spread amongst 3-5 major investors and many are very keen on zinc's future.
Anyway, none of it really makes any difference to me. I started buying at 60c, have averaged down and down and down...last count my average was 24c as I upped purchases at 15 & 12.5c, which I am prepared to do more of, but then I bought RED at 20c two years ago and it fell to 2c before jumping to $2 which was were I sold, so it's all relative.
I'm in for the long haul and I will get my price. I always do but there's plenty of people to tell you, you did the wrong thing. Most of whom are clueless about making real money.
Do I believe KZL will go into voluntary administration - NO It's not necessary.
Do I believe they will get refinancing? - YES
Do I believe they will find sophisticated investors to make up the shortfall and cover credit payments? - YES
What can I say other than that except for history repeats itself...and yes we will have a zinc boon again in 2013.
If you want a preview of what's coming re: the restructuring...look to the past...Kagara was in a much better shape going into restructuring in 2011 than it was in 2009 with 3-4 times more debt. If they even get close to making back 30-40c, I will make a lot of money. I need 24c to break even. I am not selling under any circumstances because I am certain Kagara will be fine. That is just my opinion and that's all that matters to me. Being confident of your research and sure of your fundamentals + time = smart investing.
