Originally posted by qball
Probably Huayou not converting their options was the deal that didn’t come off imo. Huayou have dissed the company in it’s hour of need. The only silver lining to this SPP debacle is that Huayou should end up being kicked off the board and out of the boardroom with a big F you stuck to it’s back.
Huayou's 15 April 2019 options have an excise price of 10 cents and as the SPP Prospectus shows (page 29) the highest the share price was in the three months leading up to the SPP offer was 8.7 cents.
I can't blame Huayou for not exercising out of the money options at what would have been a premium to the market price. Business is business not charity - everyone deserves to see some value for their money.
I suspect (just guessing really) that NF might have hoped for some support from Huayou at market prices rather than just the charity of the option exercise prices though and that that did not eventuate either.
Huayou's options and share were acquired when Klaus was still running things.
I don't attribute all of the decline in share price to Klaus (that would make no sense when as posters like Dr M have pointed out there has been a general decline in lithium exposed stocks in the last year - probably linking back to over supply reports) but I do think it is fair that Huayou or anyone might have had doubts about increasing their investment when the person that would have been instrumental in selling them on the potential in the first place was himself getting out.
If I was in Huayou's position (and wanting to secure a supply of product) I'd be wanting to see far more detail on transport and infrastructure plans and progress before increasing my commitment.
I tried to follow Dr M's mapping of the road between Manono and Moba that matched the transport route in the SS and thought that it was nuts that Dr M and not the company was having to try to provide that sort of detail.
I'd be wary of AVZ management's capacity to deliver because of the trading halts etc. that have occurred over the period post Klaus's departure. I don't think it is disrespecting AVZ to want to see value and a basis for confidence of a return on investment first. Building confidence is AVZ managements job. Showing the value is AVZ managements job.
I don't think NF is up to the job he inherited on Klaus departure but unfortunately the manner and abruptness of Klaus's departure and the structure of the deals Klaus left behind (Cominiere payments going out to May 2020 and nothing guaranteeing road access by any comparable time) didn't leave any successor in much of a position. Imo.
