Just reading the half year financials, and the OfPay deal is a concern, as is the initial payment.
NNW have already paid AU$34 million to OfPay as an initial payment (from a loan to NNW by an Amalisia related company, Grand Ease Holdings).
But now they are saying that certain conditions in the acquisition agreement have not been fulfilled. It may be the performance targets, indicating they paid way over the odds for OfPay. Perhaps they have been duped. They don't say what conditions weren't met though.
They say the company is considering current alternatives.
But again, they don't say alternatives to what?
Are they talking about alternatives to recover the AU$34 million already given to OfPay? Good luck in recovering this. If so, this could end in court action and get very murky for a long time. In fact, it could decimate this stock, simply because we are talking about such large sums of money. This is not a piddly $2 million dollar loan, it's a very large amount.
You need to look at the loan documents from Grand Ease Holdings to NNW for the initial OfPay payment. Does it state that should the acquisition fall through, and should the initial payment of $34 be unrecoverable from OfPay, that NNW and it's shareholders would then be liable to repay Grand Ease the $34 million. It is likely that Grand Ease may have covered itself like this.
I'm glad now that I sold most of my holding at 16 cents and am free carried on the small amount I have left, and I'm going to get rid of that now. The tone of parts of the quarterly was not a comforting read.
Gw
NNW Price at posting:
10.0¢ Sentiment: Sell Disclosure: Held
